Exhibit 10.9
MEMORANDUM OF AGREEMENT
This Memorandum of Agreement is entered into as of this 20th day of
October, 2006, and is by and among OHIO NURSE PRACTITIONERS, INC., an Ohio
corporation with a mailing address at 0000 Xxxxx Xxxxxxx, Xxxxxxxx, Xxxx 00000
("ONP"), XXXXXXX XXXXXX, an Ohio resident with a mailing address at the same
address ("XXXXXX"), XXXXXXX XXXXXXX, also an Ohio resident with a mailing
address at the same address ("Xxxxxxx"), and NP CARE OF OHIO, LLC, an Ohio
limited liability company with a mailing address at Xxx Xxxxxxxxx Xxxxx, Xxxxx
000, Xxxxxxx, Xxxxxxxxxxx 00000 ("NPC"). The transactions contemplated herein
shall be effective on November 6, 2006 (the "Effective Date").
BACKGROUND
ONP is engaged in the business of providing advance practice registered
nurse services to residents of nursing homes. Xxxxxx and Xxxxxxx are the only
shareholders of ONP. They have decided to terminate the business activities of
ONP, wind-up its affairs, and dissolve ONP at an appropriate time. Accordingly,
ONP intends to terminate its existing service agreements with the nursing home
facilities identified on SCHEDULE A hereto. ONP also intends to terminate its
employment relationship with the Advance Practice Registered Nurses listed on
SCHEDULE B hereto.
NPC is intends to in provide such services in the State of Ohio and to
engage Xxxxxxx and Xxxxxx as employees in connection therewith.
This Memorandum of Agreement sets forth the agreements among the parties
with respect to the covenants of Xxxxxx and Xxxxxxx to provide services to
NPC-Ohio. The parties intend that the Memorandum of Agreement constitute a valid
and binding agreement enforceable against the respective parties in accordance
with its terms.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and intending to be bound legally, the parties hereto agree as follows:
1. EMPLOYMENT OF XXXXXX. Xxxxxx hereby agrees to enter into an
employment agreement with NPC with the following terms and conditions: (a)
Xxxxxx shall be employed in an executive capacity as the Director of Operations
of NPC with specific duties as set forth by NPC; (b) Xxxxxx shall be compensated
at the rate of One Hundred Thousand Dollars ($100,000) per year, with such
company-paid benefits as NPC shall provide to similarly situated management with
NP Care, LLC of Connecticut; (c) Xxxxxx shall have the opportunity to earn an
annual bonus not to exceed Twenty Thousand Dollars ($20,000) based upon equaling
or exceeding mutually agreed growth targets; (d) Xxxxxx will be eligible to
participate in future stock option or stock purchase plans at the same level as
similarly situated management with NP Care, LLC of Connecticut, (e)Xxxxxx agrees
to a nominal employment term of approximately three (3) years commencing on the
Effective Date and ending on September 30, 2009, but either party
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may terminate the employment relationship at any time with a minimum of thirty
(30) days prior notice and may terminate immediately for good cause; and (f) in
addition to any other restrictive covenants set forth herein, Xxxxxx agrees that
during the term of her employment and for two years following termination for
any reason she will not solicit any employees or any facilities or other clients
that, during her employment or at the time of termination, as the case may be,
were employed by or either were being serviced by NPC-Ohio or any affiliate or
were being actively pursued by NPC or any affiliate. At the request of either
party, Xxxxxx and NPC shall enter into a separate agreement incorporating the
terms of this Section 1 with such other provisions as are customary in
agreements of this type. In the event that Xxxxxx is terminated by NPC for
reasons other than for good cause, NPC will provide severance pay for the three
(3) months following said termination. The parties agree to negotiate these
provisions in good faith, and to settle any disagreements by arbitration.
2. EMPLOYMENT OF XXXXXXX. Xxxxxxx hereby agrees to enter into an
employment agreement with NPC, when formed, with the following terms and
conditions: (a) Xxxxxxx shall be employed by NPC or an affiliate on a part-time
basis (twenty-four (24) hours per week) with specific duties as set forth by
NPC, but which will include working with senior management of NPC and its
affiliates to define projects for implementation by NPC or its affiliates in
Tennessee and Illinois, and establishing priorities and timelines for additional
projects; (b) Xxxxxxx shall be compensated at sixty-percent (60%) of a full time
equivalent annual salary of One Hundred Thousand Dollars or Five Thousand
Dollars ($5,000) per month, with such company-paid benefits as provided to
similarly situated management with NP Care, LLC of Connecticut ; (c) Xxxxxxx
shall be required to travel as necessary based on project needs up to four (4)
days per month on average and shall be reimbursed in accordance with company
policy; (d) Xxxxxxx'x position description and FTE status will be evaluated at
the end of six months;(e) Xxxxxxx shall be eligible for bonus compensation based
upon a company wide bonus structure to be determined by NPC; (f) Xxxxxxx will be
eligible to participate in future stock option or stock purchase plans at the
same level as similarly situated management with NP Care, LLC of Connecticut,
(g) Xxxxxxx agrees to a nominal employment term of approximately three (3) years
commencing on the Effective Date and ending on September 30, 2009, but either
party may terminate the employment relationship at any time with a minimum of
thirty (30) days prior notice and may terminate immediately for good cause; and
(f) in addition to any other restrictive covenants set forth herein, Xxxxxxx
agrees that during the term of her employment and for two years following
termination for any reason she will not solicit any employees or any facilities
or other clients that, during her employment or at the time of termination, as
the case may be, were employed by or either were being serviced by NPC or any
affiliate or were being actively pursued by NPC or any affiliate. At the request
of either party, Xxxxxxx and NPC shall enter into a separate agreement
incorporating the terms of this Section 1 with such other provisions as are
customary in agreements of this type. In the event that Xxxxxxx is terminated by
NPC for reasons other than for good cause, NPC will provide severance pay for
the three (3) months following said termination. The parties
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agree to negotiate these provisions in good faith, and to settle any
disagreements by arbitration.
3. AGREEMENT WITH ONP. (a) ONP, acting through Xxxxxx and Xxxxxxx,
shall be retained as a consultant to NPC for the period commencing on the
Effective Date and ending on September 30, 2009. ONP's specific duties with
respect to this consulting arrangements shall be the following: (i) ONP shall
use its best efforts to assist NPC in securing and retaining for NPC contractual
service agreements with the facilities identified on SCHEDULE A hereto; and (ii)
ONP shall use its best efforts to assist NPC in hiring the nurses identified on
SCHEDULE B hereto.
(b) In consideration of ONP's consulting services, ONP shall be paid a
consulting fee in the amount of Two Hundred Thousand Dollars ($200,000) (the
"ONP Consulting Fee");
(c) Subject to the offset set forth in paragraph (d) below, the
consulting fee shall be paid to ONP as follows: (a) three (3) installments of
Thirty Three Thousand Three Hundred Thirty-Three and 33/100 Dollars ($33,333.33)
each payable on the Effective Date and on December 6, 2006 and on or before
December 31, 2006; and (b) twenty-four (24) installments of Four Thousand One
Hundred Sixty Six and 67/100 Dollars on the first day of January, 2007 and on
the first day of each month thereafter through December 1, 2008.
(d) In light of the diminished obligations of ONP in the event that not
all of the facilities identified on SCHEDULE A become clients of NPC, the
consulting fee set forth in paragraph (c) above shall be reduced at the rate of
$7,692.30 ($200,000 divided by 26 current facilities) times the number of
facilities that are not a client of NPC at the end of six months from the
Effective Date (e.g. if only 16 facilities are being serviced by NPC on the six
month anniversary of the Effective Date, the offset will be $7,692.30 times 10
or $76,923.00).
(e) In addition to any other restrictive covenants set forth herein,
ONP, Xxxxxx and Xxxxxxx agree that during the period commencing on the Effective
Date and ending on September 30, 2009, neither ONP, Xxxxxx nor Xxxxxxx shall
solicit either the facilities identified on SCHEDULE A hereto or the nurses
identified on SCHEDULE B hereto except on behalf of NPC.
4. NO ASSIGNMENT. It is specifically agreed and understood by all
parties hereto that neither ONP, Xxxxxx nor Xxxxxxx is making, and NPC is
receiving, any assignment or other transfer of any of the ONP service agreements
listed on SCHEDULE A or any employment agreements, whether oral or written, with
any of the individuals listed on SCHEDULE B.
5. NO ASSUMPTION OF LIABILITIES. It is specifically agreed and
understood by all parties that neither NPC, NPC, nor any affiliate of either
shall assume, or shall have
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any liability for, any debts, liabilities, obligations, expenses, taxes,
contracts or commitments of ONP, Xxxxxx or Xxxxxxx, of any kind, character or
description, whether accrued, absolute, contingent or otherwise, arising out of
any act or omission of ONP, Xxxxxx or Xxxxxxx, other than actions or omissions
of Xxxxxx or Xxxxxxx reasonably taken pursuant to their respective employment
agreements or consulting agreements with NPC, and within the scope of their
respective activities thereunder. Without limiting the foregoing, ONP, Xxxxxx
and Xxxxxxx shall retain all liability for any and all obligations to the
employees of ONP arising out of their employment relationship with ONP,
including but not limited to any obligations with respect to accrued vacation,
sick or personal days, any obligations under any qualified or non-qualified
retirement income plan or any other employee welfare benefit plan, or any rights
under COBRA or any similar federal or state law, and any obligations arising
under any employment agreement, written or oral, or any employment
relationships. ONP, Xxxxxx and Xxxxxxx agree to satisfy, when due, all of the
liabilities, indebtedness and obligations of ONP other than obligations due from
ONP to Xxxxxx or Xxxxxxx. Xxxxxx and Xxxxxxx agree that they will not cause ONP
to file any voluntary petition in bankruptcy and will promptly take all efforts
necessary to discharge any involuntary petition in bankruptcy.
6. COMPLIANCE WITH LAWS. ONP, Xxxxxx and Xxxxxxx represent and warrant
that: (a) ONP is in compliance in all material respects with all applicable
federal, state and local laws, regulations, orders, judgments and decrees,
including, without limitation, matters relating to fraud and abuse or
prohibition on self-referrals in any government paid or sponsored health care
program, the environment, antitrust and anti-competitive practices,
discrimination, employment and health and safety; and (b) neither ONP, Xxxxxx
nor Xxxxxxx have received any notice of any material, un-remedied violation of
any applicable law, rule, regulation, order, writ or decree or any court or any
governmental agency or instrumentality.
7. SURVIVAL OR REPRESENTATIONS, WARRANTIES AND COVENANTS. All
representations, warranties and covenants made by any party to this Agreement or
pursuant hereto shall survive the closing of the transactions contemplated
hereunder. The representations, warranties and covenants hereunder shall not be
affected or diminished by any investigation at any time by or on behalf of the
party for whose benefit such representations, warranties and covenants were
made. All statements contained herein or in any schedule, certificate, exhibit
or other document delivered pursuant hereto or in connection with the
transactions contemplated hereby shall be deemed to be representations,
warranties and covenants made pursuant to this Agreement. Without limiting the
foregoing, the respective covenants of ONP, Xxxxxx and Xxxxxxx set forth in
Sections 1, 2 and 3 are separate and independent and shall each be subject to
enforcement in accordance with their respective terms.
8. INDEMNIFICATION BY ONP, XXXXXX AND XXXXXXX. ONP, Xxxxxx and Xxxxxxx
(collectively, the "Indemnitors") agree, jointly and severally, to indemnify,
defend and hold harmless NPC, and each of its members, affiliates, officers,
directors, agents and assigns (the "Indemnified Parties") from against, for and
in respect of: (a) any
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and all damages, losses, settlement payments, obligations, liabilities,
claims, actions or causes of action, encumbrances and reasonable costs and
expenses suffered, sustained, incurred or paid by any of the Indemnified Parties
because of (i) the assertion against any of the Indemnified Parties of any
claims against any of the Indemnitors or any other liabilities of an Indemnitor,
whether absolute or contingent, known or unknown, matured or unmatured; or (ii)
the untruth, inaccuracy or breach of any representation, warranty, agreement or
covenant of any of the Indemnitors contained in or made in connection with this
Agreement; and (b) all reasonable costs and expenses (including, without
limitation, attorneys' fees, interest and penalties) incurred by any indemnified
party in connection with any action, suit, proceeding, demand, assessment or
judgment incident to any of the matters indemnified against in this Section 9.
9. TERMINATION OF AGREEMENT. Notwithstanding anything herein to the
contrary, NPC may unilaterally terminate this Agreement in the event that, on or
before the Effective Date, NPC concludes in good faith that: (a) there has been
a material adverse change in the business or properties of ONP, Xxxxxx or
Xxxxxxx; (b) any representation of ONP, Xxxxxx or Xxxxxxx is false in any
material respect; or (c) ONP, Xxxxxx or Xxxxxxx have failed to perform any
covenant required to be performed by them prior to the Effective Date. Upon
termination of this Agreement pursuant to this Section 10, no party shall have
any further obligation to the other parties except with respect to the
obligation to maintain the confidentiality of any confidential information
received from the other party.
10. ARBITRATION. Except for the pursuit of equitable remedies with
respect to the breach of any noncompetition agreement or other restrictive
covenant set forth herein, the parties hereto agree that any dispute arising
hereunder shall be settled by arbitration under the auspices of the American
Arbitration Association. The venue for the arbitration shall be in Columbus,
Ohio. Each party shall bear its respective costs of the arbitration proceeding,
including attorney's fees, except that the arbitrator shall have th e discretion
to award costs and reasonable attorneys' fees, in addition to any other relief
granted, to the prevailing party.
11. NOTICES. All notices under this Agreement shall be in writing and
shall be delivered by personal service overnight mail or by certified or
registered mail, postage prepaid, return receipt requested, to the parties at
the addresses set forth in the preamble to this Agreement. Notices delivered by
personal service or overnight mail shall be deemed received on the date of the
signed receipt and notices sent by certified or registered mail shall be deemed
received three (3) days after deposit in the mail.
12. FORCE MAJEURE. No party shall be liable nor deemed to be in default
for any delay or failure in performance under this Agreement or other
interruption of service which is caused, directly or indirectly, by acts of God,
military authority, acts of public enemy, war, accidents, fires, explosions,
earthquakes, floods, failure of transportation, machinery or supplies,
vandalism, strikes or other work interruptions beyond the reasonable control of
either party. However, all parties shall make good faith efforts to
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perform their respective obligations under this Agreement in the event of any
such circumstances.
13. EXPENSES. Each party hereto shall bear all expenses incurred by such
party in connection with the negotiation, preparation, execution and performance
of this Agreement and any other Agreement contemplated hereby, except as
otherwise specified herein.
14. NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer any
rights or remedies upon any person other than the parties hereto and their
respective successors and permitted assigns.
15. AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement, and no postponement or waiver of any such provision or of any
default, misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be valid unless such amendment, postponement or waiver
is in writing and signed by the party against whom such enforcement is sought.
No such amendment, postponement or waiver shall be deemed to extend to any prior
or subsequent matter, whether or not similar to the subject matter of such
amendment, postponement or waiver unless explicitly stated. No failure or delay
on the part of any party in exercising any right, power or privilege under this
Agreement shall operate as a waiver thereof nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
16. SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. No party may assign this Agreement or any of such party's
rights, interests or obligations hereunder without the prior approval of the
other party hereto; provided, however, that NPC may assign its rights hereunder
in connection with any merger, consolidation, business combination,
reorganization, recapitalization, or sale of assets.
17. MATTERS OF CONSTRUCTION, INTERPRETATION, ETC. The parties have
participated jointly in the negotiation and drafting of this Agreement. If an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the adverse parties, and no presumption or
burden of proof shall arise favoring or disfavoring any of them because of the
authorship of any of the provisions of this Agreement. The word "including"
shall mean "including without limitation." Each representation, warranty and
covenant contained herein shall have independent significance. The rights and
remedies expressly specified in this Agreement are cumulative and are not
exclusive of any rights or remedies which any party would otherwise have. The
section headings hereof are for convenience only and shall not affect the
meaning or interpretation of this Agreement.
18. SEVERABILITY. The invalidity or unenforceability of one or more of
the provisions of this Agreement in any situation in any jurisdiction shall not
affect the
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validity or enforceability of any other provision hereof or the validity or
enforceability of the offending provision in any other situation or
jurisdiction.
19. ENTIRE AGREEMENT; COUNTERPARTS. This Agreement (and any supplemental
agreement as contemplated by Sections 1 thru 4 as well as any confidentiality
agreement) constitutes the entire agreement among the parties and supersedes any
prior understandings, agreements or representations by or among the parties,
written or oral, to the extent they relate to the subject matter hereof. 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.
20. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio without giving effect to any
choice 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 Connecticut.
IN WITNESS WHEREOF, the parties hereto have set forth their hands and
seals as of the date set forth above.
Ohio Nurse Practitioners, Inc. NP Care of Ohio, LLC
By: Xxxxxxx Xxxxxxx By:/s/ Xxxxx Chess
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Its President, duly authorized Its Member, duly authorized
/s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
/s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx
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