TERMINATION AGREEMENT AND RELEASE
THIS TERMINATION AGREEMENT AND RELEASE ("Agreement"), dated the 27th day
of July, 2005, by and among New York Health Care, Inc., a New York corporation
(the "Company"), NYHC Newco Paxxon, Inc., a New York corporation ("NYHC-NJ"),
Xxxxx Xxxxx ("Xxxxx") and Xxxxx Xxxxxxxxx ("Xxxxxxxxx") and New York Health
Care, LLC (the "LLC").
WHEREAS, each of Xxxxx and Xxxxxxxxx have entered into employment
agreements with the Company, dated November 10, 1999, as amended on January 28,
2003 (collectively, the "Employment Agreements"), copies of which are attached
hereto as Exhibit A;
WHEREAS, as of July 15, 2004 the parties hereto entered into a Purchase
Agreement pursuant to which the LLC would acquire from the Company certain
assets of the Company's home health care business (the "Purchase Agreement");
WHEREAS, on February 24, 2005 the Company, NYHC-NJ, Xxxxx and Xxxxxxxxx
entered into an agreement, a copy of which is attached hereto as Exhibit B (the
"Security Agreement"), pursuant to which the Company and NYHC-NJ granted Xxxxx
and Xxxxxxxxx a security interest in all of the assets of the Company's home
health care business (the "Security Interest") and which also provided for the
Company and NYHC-NJ to deposit $3.55 million in an interest-bearing cash
collateral account (the "Collateral Account") in favor of Xxxxx and Xxxxxxxxx
(the $3.55 million together with any additional monies deposited therein or any
interest earned thereon, the "Collateral Amount") (a) as security for the
obligations of the Company and NYHC-NJ to consummate the purchase/sale
contemplated by the Purchase Agreement, and (b) to secure certain obligations
the Company and/or NYHC-NJ may have to Xxxxx and Xxxxxxxxx under the Employment
Agreements and the Security Agreement, which Security Agreement was modified by
a Termination Agreement dated March 24, 2005 pursuant to which the Security
Interest was terminated; and
WHEREAS, each of the parties hereto wishes, and considers it be in its
best interests, to (i) terminate the Purchase Agreement and the obligations, if
any, of the parties thereto under the Purchase Agreement; (ii) terminate the
Security Agreement and the obligations of the parties thereto under the Security
Agreement; (iii) terminate the Employment Agreements and the obligations of the
parties thereto under the Employment Agreements other than the continued
obligations of Xxxxx and Xxxxxxxxx under Sections 7 and 8(B) and (C) of their
respective Employment Agreements, as modified in Section 2 hereof; (iv) provide
for certain compensation to Xxxxx and Xxxxxxxxx in consideration thereof; and
(v) agree to certain other arrangements as hereinafter more particularly set
forth, upon and subject to the terms hereinafter set forth;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the parties hereto hereby agree as follows:
1. Each of Xxxxx and Xxxxxxxxx are hereby resigning all positions of
employment with the Company effective upon the close of business on the Employee
Irrevocability Date as defined in Section 26 of this Agreement (the "Resignation
Date"). Each of Xxxxx and Xxxxxxxxx agree that in addition to resigning their
employment and any positions they each may hold with the Company they each also
resign, effective on the Resignation Date, from any other positions they each
may hold as an officer, director or employee or otherwise of any of the
Company's subsidiaries or divisions.
2. The Employment Agreements are hereby terminated and of no further force
or effect except as to the obligations of Xxxxx and Xxxxxxxxx under Sections 7
and 8(B) and (C) of the Employment Agreements, which obligations shall continue
and be binding upon each of Xxxxx and Xxxxxxxxx after the date hereof for the
periods specified in the Employment Agreements. For purposes of the continued
obligations of Xxxxx and Xxxxxxxxx under such Sections 7 and 8(B) and (C) of the
Employment Agreements they each acknowledge and agree that the reference to
Employer in such Sections 7 and 8(B) and (C) shall mean the Company, The
BioBalance Corporation and NYHC-NJ and the Company acknowledges and agrees that
nothing in Sections 8(B) or (C) of either of the Employment Agreements shall
preclude Xxxxx or Xxxxxxxxx from rendering any services to or with any successor
owner of all or any portion of the New York health care business of Company and
NYHC-NJ.
3. The Purchase Agreement is hereby terminated and of no further force or
effect.
4. The Security Agreement is hereby terminated and of no further force or
effect.
5. Any Collateral Account that was opened shall be promptly closed and
Xxxxx and Xxxxxxxxx, at no expense to them, shall promptly (i) take all actions
reasonably requested by the Company to cause the Collateral Amount to be
transferred to a Company bank account pursuant to instructions to be provided to
them by the Company's Chief Executive Officer and (ii) furnish to the Company a
current bank statement setting forth the balance of the monies in the Collateral
Account immediately prior to the transfer of the Collateral Amount to the
Company.
6. (a) Under the Company's regular policies, each of Xxxxx and Xxxxxxxxx
will be eligible to continue their health insurance coverage, in accordance with
COBRA, for a minimum of eighteen (18) months from their respective Resignation
Dates. Each of Xxxxx and Xxxxxxxxx will receive under separate cover more
detailed information regarding insurance benefits under COBRA. Nothing contained
in this Agreement is intended to impair any of these rights. Such health
insurance will be subject to whatever future changes or revisions are made to
the Company medical plan. The Company shall pay the premiums and costs of such
health insurance for the remaining portion of 2005, and Xxxxx and Xxxxxxxxx
shall not required to pay to the Company any COBRA premium payment for the
remaining portion of calendar year 2005.
(b) The 401K accounts of Xxxxx and Xxxxxxxxx will be distributed
(i.e. rolled over) in accordance with the terms applicable to terminating
employees.
-2-
7. In consideration for signing this Agreement, and in lieu of any
payments to which Xxxxx, Xxxxxxxxx or the LLC might otherwise be entitled under
the Employment Agreements, the Purchase Agreement or the Security Agreement, the
Company will provide Xxxxx and Xxxxxxxxx with the following payments and
benefits:
a. in exchange for the agreements herein contained, the non-compete
agreements delivered by Xxxxx and Xxxxxxxxx in connection with the sale of the
Company's and NYHC-NJ's New Jersey business to a third party and the continuance
of the non-compete agreements contained in Section 8 of the Employment
Agreements, the Company shall make to Xxxxx a payment of $1,200,000.00 (the
"Xxxxx Payment") and to Xxxxxxxxx a payment of $1,050,000.00 (the "Xxxxxxxxx
Payment"). On July 27, 2005, the Xxxxx Payment and the Xxxxxxxxx Payment were
paid into the attorney escrow account of Blank Rome LLP and, provided neither
Xxxxx nor Xxxxxxxxx revokes his resignation prior to the Employee Irrevocability
Date, but subject to no other conditions whatsoever, absent a court order
prohibiting the distribution of the Xxxxx Payment to Xxxxx or the Xxxxxxxxx
Payment to Xxxxxxxxx, (i) the Xxxxx Payment shall be paid to Xxxxx, by wire
transfer to the account designated in writing by Xxxxx, on the Employee
Irrevocability Date, and (ii) the Xxxxxxxxx Payment shall be paid to Xxxxxxxxx,
by wire transfer to the account designated in writing by Xxxxxxxxx, on the
Employee Irrevocability Date. The Company shall not take or assist in, and shall
use its best efforts to ensure that none of the Company Parties takes or assists
in, any action that will or may prevent, delay or otherwise interfere with the
payment of the Xxxxx Payment and the Xxxxxxxxx Payment in accordance with the
terms of this Section 7(a);
b. with respect to the outstanding stock options to purchase common
stock of the Company (the "Common Stock") owned on the date hereof by Xxxxx and
Xxxxxxxxx, and warrants to purchase Common Stock owned on the date hereof by
Xxxxx and his wife and by Xxxxxxxxx'x wife, all of which are listed on Schedule
A attached hereto and made a part hereof, all of such options and warrants are
deemed vested and shall continue to be exercisable, and shall expire at, the
applicable dates set forth in Schedule A, other than the following which are
surrendered as of the date hereof (the "Forfeited Options"): (i) options to
purchase an aggregate of 586,250 shares of Common Stock granted to Xxxxx listed
under the heading "Surrendered" on Schedule A, and (ii) options to purchase an
aggregate of 523,750 shares of Common Stock granted to Xxxxxxxxx listed under
the heading "Surrendered" on Schedule X. Xxxxx and Xxxxxxxxx each (i) agrees to
return to the Company the original of any option agreements for the Forfeited
Options in his possession unless such option agreements also cover stock options
that are not Forfeited Options, and (ii) represents and warrants to the Company
that he has not assigned or transferred to any third party title to or any
interest in the Forfeited Options. With respect to stock certificates for all
Common Stock of the Company owned by Xxxxx and Xxxxxxxxx that bear a restrictive
legend under the Securities Act of 1933, as amended (the "Act"), upon the
expiration of three months following the Resignation Date the Company will
instruct the transfer agent for its Common Stock to remove the restrictive
legend provided that at that time Xxxxx and Xxxxxxxxx represent to the Company
in writing with respect to any Common Stock acquired by Xxxxx or Xxxxxxxxx that
are "restricted securities" within the meaning of Rule
-3-
144 promulgated under the Act, that they own and fully paid for such shares more
than two years prior to such date or, with respect to shares of Common Stock
that they received as a result of conversion of shares of the Company's Series A
Convertible Preferred Stock, that they paid for such shares of preferred stock
more than two years prior to such date, and that they further represent to the
Company in writing that they are not, and during the prior three months were
not, "affiliates" of the Company as such term is defined in Rule 144(a)(1)
promulgated under the Act.
c. the Company shall pay Xxxxx and Xxxxxxxxx by no later than the
Employee Irrevocability Date, upon receipt of reasonable documentary support,
(i) all accrued but unpaid compensation, (ii) the value of all accrued, but
unused, vacation, sick leave, personal leave and compensated absences provided
for in the Employment Agreements, and (iii) all unreimbursed travel and other
work-related expenses incurred by Xxxxx and Xxxxxxxxx; provided that the maximum
amount payable to each of Xxxxx and Xxxxxxxxx under clauses (i), (ii) and (iii)
shall not exceed Five Thousand Dollars ($5,000) in the aggregate (i.e. not more
than Ten Thousand Dollars ($10,000) in total);
d. at no cost to Xxxxx or Xxxxxxxxx, the Company hereby transfers
(i) to Xxxxx title to the laptop and desktop computers (including all associated
equipment and cables) used by Xxxxx, and to Xxxxxxxxx title to the laptop and
desktop computers (including all associated equipment and cables) used by
Xxxxxxxxx and prior to the Employee Irrevocability Date Xxxxx and Xxxxxxxxx will
xxxxx the Company access to the laptop and desktop computers and allow the
Company to access and copy all non-personal files and records maintained on the
computers; and
e. at no cost to Xxxxx or Xxxxxxxxx, the Company shall promptly
transfer ownership of the life insurance policies of Xxxxx and Xxxxxxxxx in
accordance with the respective instructions of Xxxxx and Xxxxxxxxx.
8. Xxxxx, Xxxxxxxxx and the LLC understand that the Company makes no
representation as to the income tax treatment of any payments hereunder and that
any and all payments (and all compensation, benefits and/or other payments
previously made to Xxxxx and Xxxxxxxxx by the Company ) will be subject to such
tax treatment and to such deductions, if any, as may be required under
applicable tax laws.
9. a. Each of the parties hereto agree that, except as required by
applicable law, neither it nor he nor any of its or his affiliates nor any of
the employees of any of the foregoing will disclose any information regarding
the existence or substance of this Agreement prior to the date upon which the
Xxxxx Payment is made to Xxxxx and the Xxxxxxxxx Payment is made to Xxxxxxxxx,
except that, notwithstanding the foregoing, Xxxxx and Xxxxxxxxx shall be
entitled, prior to such date, to disclose, on a confidential basis, the
existence and substance of this Agreement to their spouses and children and to
inform employees of the Company of their respective resignations from the
Company.
-4-
x. Xxxxx and/or Xxxxxxxxx may refer potential employers to the Chief
Executive Officer of the Company, who shall respond promptly to inquiries about
Xxxxx and Xxxxxxxxx. Unless otherwise agreed to by Xxxxx and Xxxxxxxxx, the
Company shall not, and shall cause its affiliates and its and their respective
officers and senior executives not to, communicate to any prospective employer
or to any other person, orally or in writing or in any other manner, anything
with respect to Xxxxx and/or Xxxxxxxxx'x employment with the Company other than
verification of positions held, dates of employment and salaries. Without
limiting the foregoing, under no circumstances shall the Company or any of its
affiliates or any of its or their employees explicitly or implicitly disparage
the opportunities for re-employment by the Company of Xxxxx or Xxxxxxxxx.
10. Each of Xxxxx and Xxxxxxxxx agrees to provide such assistance to the
Company and its subsidiaries with respect to the Company's ongoing business as
the Company shall reasonably request, which assistance shall include (i)
assisting in the transition of the Company's home health care operations to
either new management or new owners, (ii) assisting in preparation of quarterly
or annual financial statements of the Company and/or its subsidiaries for all
periods through and including the financial statements for the year ending
December 31, 2005, which assistance shall include, but not be limited to,
providing appropriate sub-certifications to the Company's Chief Executive and
Financial Officer in connection with such officers providing certifications in
the Form 10-Q's and Form 10-K covering the periods of such financial statements
(but in no case any period subsequent to the Resignation Date), and (iii)
assisting in any litigation involving the Company's business; provided that
nothing in the foregoing shall require Xxxxx or Xxxxxxxxx to waive any rights or
privileges they may have in connection with or arising out of any such
litigation. In connection with any assistance provided pursuant to this Section
10 subsequent to the Employee Irrevocability Date, except assistance provided in
litigation involving the Company's business where the liability to the Company
is based upon Xxxxx or Xxxxxxxxx'x willful misconduct, or fraud or other
criminal conduct as officers, directors, employees or agents of the Company,
Xxxxx and Xxxxxxxxx shall be reimbursed for their time as follows for any day or
part thereof in which they provide their assistance: Xxxxx-$1,500;
Xxxxxxxxx-$1,200.
11. It is expressly understood and agreed that this Agreement and the
effectuation of its terms do not constitute an admission or statement by the
Company that the Company or any of its subsidiaries has acted unlawfully or
wrongfully or is otherwise liable in any respect or an admission or statement by
Xxxxx, Xxxxxxxxx or the LLC that any of them has acted unlawfully or wrongfully
or is otherwise liable in any respect, but is being entered into solely for the
purpose of amicably resolving all matters of any kind among the parties hereto.
It is further agreed that evidence of the circumstances surrounding the parties
entering into this Agreement, shall be inadmissible in any action or lawsuit of
any kind, except for an action for alleged breach of this Agreement.
12. (a) The Company acknowledges and agrees that notwithstanding the
resignations of Xxxxx and Xxxxxxxxx on the date hereof, the applicable
indemnification
-5-
provisions contained in the Company's Certificate of Incorporation (as such
indemnification provisions exist as of the date of this Agreement) and in the
New York Business Corporation Law shall continue to apply to the maximum extent
permitted by applicable law to the activities of Xxxxx and Xxxxxxxxx as officers
or directors of the Company prior to the date hereof.
(b) To the maximum extent permitted by applicable law, the Company
shall indemnify and hold harmless each of Xxxxx and Xxxxxxxxx from and against
expenses (including reasonable attorneys' fees), losses, costs, damages,
judgments, fines, and amounts paid in settlement actually and reasonably
incurred by him in connection with any and all threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Company) (i) by
reason of the fact that he is or was an employee or agent of the Company, or
(ii) in connection with or arising out of the Purchase Agreement, the Employment
Agreements or the Security Agreement, if he acted in good faith and for a
purpose he reasonably believed to be in or not opposed to the best interests of
the Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe that his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that he did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
(c) The Company shall indemnify and hold harmless Xxxxx and
Xxxxxxxxx from and against expenses (including reasonable attorneys' fees),
losses, costs, damages, judgments, fines, and amounts paid in settlement
actually and reasonably incurred by him/her in connection with any threatened,
pending or completed action, suit or proceeding, by or in the right of the
Company to procure a judgment in its favor (i) by reason of the fact that he is
or was an employee or agent of the Company, or (ii) in connection with or
arising out of the Purchase Agreement, the Employment Agreements or the Security
Agreement, if he acted in good faith and for a purpose he reasonably believed to
be in or not opposed to the best interests of the Company; and, with respect to
any criminal action or proceeding, had no reasonable cause to believe that his
conduct was unlawful, except that no such indemnification shall be made for
actions brought by or on behalf of the Company based on the conviction or
liability of the Company for (1) violations of federal or state securities laws,
(2) violations of federal, state or local lax laws, or (3) violations of other
applicable law where such conviction or liability arose as a result of the
willful misconduct, or fraud or other criminal conduct by Xxxxx or Xxxxxxxxx, as
directors, officers, employees or agents of the Company. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that he did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
-6-
(d) Promptly after an indemnified party receives written notice of a
matter giving rise to indemnification rights under this Agreement (an
"Indemnification Matter"), the indemnified party shall give notice to the
indemnifying party of the nature of the Indemnification Matter and the amount
demanded or claimed in connection therewith, if any ("Indemnification Notice"),
together with copies of any such written documents. Failure of the indemnified
party to give the Indemnification Notice shall not affect rights to
indemnification hereunder, except to the extent that the indemnifying party
demonstrates actual damages caused by such failure.
(e) If the Indemnification Matter is a third party claim, then, upon
receipt of the Indemnification Notice, the indemnifying party may elect to
compromise or defend, at its own expense and by its own counsel (subject to the
approval of indemnified party, which shall not be unreasonably withheld), any
such action, suit, or proceeding; provided, however, that the indemnifying party
may not compromise or settle any Indemnification Matter without the consent of
the indemnified party, which shall not be unreasonably withheld. If the
indemnifying party elects to compromise or defend such Indemnification Matter,
it shall within fifteen (15) days (or sooner, if the nature of the
Indemnification Matter so requires) notify the indemnified party of its intent
to do so and the indemnified party shall cooperate in the compromise of, or
defense against, such Indemnification Matter. If the indemnifying party elects
not to compromise or defend any Indemnification Matter, fails to notify the
indemnified party of its election as herein provided or contests its obligation
to indemnify, or fails to pursue such defense with diligence and in good faith,
the indemnified party may pay, compromise or defend such Indemnification Matter
without prejudice to any right it may have hereunder. In any event, each party
may participate, at its own expense, in the defense of any Indemnification
Matter in respect of which it may have an indemnification obligation or right
hereunder. In no event may an indemnified party settle or compromise any
Indemnification Matter without the prior consent of the indemnifying party,
which shall not be unreasonably withheld.
(f) The Company shall maintain officers' and directors' liability
insurance for a continuous period of not less than three (3) years after the
date hereof, on forms and with conditions and exclusions that are materially
similar to the forms, conditions and exclusions of its existing officers' and
directors' liability insurance (except that such policies need not include an
extended reporting period) to the extent such forms, conditions and exclusions
continue to be available in the insurance industry.
13. (a) To the maximum extent permitted by applicable law, each of Xxxxx,
Xxxxxxxxx and the LLC knowingly and voluntarily release and forever discharge
the Company, and its current and former subsidiaries, affiliated and related
corporations and entities, their successors and assigns, and the current and
former directors, officers and/or employees of such corporations and entities,
and their affiliates, successors, assigns, heirs, executors and administrators
(referred to collectively hereafter throughout this Agreement as the "Company
Parties") from and against any and all claims, actions, demands, contracts and
causes of action, known and unknown, which they or their respective, officers,
directors, stockholders, heirs,
-7-
executors, administrators, successors and assigns (referred to collectively
hereafter throughout this Agreement as the "Employee Parties") now or may have
as of the date of execution of this Agreement against the Company Parties,
including in such release, without limitation, any alleged violation of:
o The National Labor Relations Act, as amended;
o Title VII of the Civil Rights Act of 1964, as amended;
o Sections 1981 through 1988 of Title 42 of the United States Code, as
amended;
o The Civil Rights Act of 1991;
o The Age Discrimination in Employment Act of 1967, as amended;
o The Employee Retirement Income Security Act of 1974, as amended;
o The Immigration Reform Control Act, as amended;
o The Americans with Disabilities Act of 1990, as amended;
o The Fair Labor Standards Act, as amended;
o The Occupational Safety and Health Act, as amended;
o The Family and Medical Leave Act of 1993;
o The New York Human Rights Act, as amended;
o The New York Minimum Wage Law, as amended;
o Equal Pay Law for New York, as amended;
o any other federal, state or local civil or human rights law or any
other local, state or federal law, regulation or ordinance;
o any public policy, contract, tort, or common law; or
o any allegation for costs, fees, or other expenses including
attorneys' fees incurred in these matters.
Notwithstanding anything in the foregoing to the contrary, this Section
13(a) shall not (i) release the Company or NYHC-NJ from any claims arising from
a breach of this Agreement, (ii) preclude Xxxxx, Xxxxxxxxx and the LLC from
enforcing the terms of this Agreement and/or their rights hereunder and under
any plans or other agreements referenced herein, or release (iii) the
-8-
Company from any claims brought by any Employee Party in its or his status
solely as a stockholder and/or as a beneficiary of pension and/or employee
benefits plans.
(b) To the maximum extent permitted by applicable law, the Company,
on behalf of itself and each of the Company Parties, knowingly and voluntarily
releases and forever discharges each of the Employee Parties from and against
any and all claims, actions, demands, contracts and causes of action, known and
unknown, which any of the Company Parties now or may have as of the date of
execution of this Agreement against the Employee Parties, including in such
release, without limitation, any alleged violation of:
o any local, state or federal law, regulation or ordinance;
o any public policy, contract, tort, or common law; or
o any allegation for costs, fees, or other expenses including
attorneys' fees incurred in these matters.
Notwithstanding anything in the foregoing to the contrary, this Section
13(b) shall not (i) release Xxxxx, Xxxxxxxxx or the LLC from any claims arising
from a breach of this Agreement, (ii) preclude the Company or NYHC-NJ from
enforcing the terms of this Agreement and/or their rights hereunder and under
any plans or other agreements referenced herein, or (iii) release Xxxxx or
Xxxxxxxxx to the extent that, as a result of willful misconduct, fraud or other
criminal conduct by Xxxxx or Xxxxxxxxx as directors, officers or employees of
the Company, the Company is convicted or found liable for (1) violations of
federal or state securities laws, (2) violations of federal, state or local tax
laws, or (3) violations of other applicable law.
14. (a) Each of Xxxxx, Xxxxxxxxx and the LLC confirm and agree that they
have not filed or instituted, and will not file or institute, any claims,
charges, actions, complaints or any other proceedings against the Company
Parties before any court, administrative agency or any other forum based upon or
arising out of any claims, actions, demands, contracts and causes of action by
or in respect of the Employee Parties against the Company Parties except to the
extent that any such claim, charge, action, complaint or proceeding concerns an
allegation that the Company or NYHC-NJ failed to comply with any obligations
under this Agreement and/or their rights hereunder or under any plan or other
agreements referenced herein (i.e. 401K plans, stock option agreements and
benefit agreements), or to the extent that any such claim is brought by either
Xxxxx or Xxxxxxxxx in his status solely as a stockholder of Company and/or
beneficiary of 401K and/or benefits plans. Except as aforesaid, in the event
that any such claim, charge, action, complaint or other proceeding is filed,
Xxxxx, Xxxxxxxxx and the LLC shall not be entitled to recover any relief or
recovery therefrom, including costs and attorneys' fees.
(b) The Company and NYHC-NJ confirm and agree that neither they nor
any of the Company Parties have filed or instituted, nor will they file or
institute, any claims, charges, actions, complaints or any other proceedings
against any of the Employee Parties before any court, administrative agency or
any other forum based upon or arising out of any claims,
-9-
actions, demands, contracts and causes of action by or in respect of the Company
Parties against the Employee Parties except to the extent that (i) any such
claim, charge, action, complaint or proceeding concerns an allegation that
Xxxxx, Xxxxxxxxx or the LLC failed to comply with any obligations under this
Agreement and/or their rights hereunder, or (ii) as a result of wilful
misconduct, fraud or other criminal conduct by Xxxxx or Xxxxxxxxx as directors,
officers or employees of the Company, the Company is convicted or found liable
for (1) violations of federal or state securities laws, (2) violations of
federal, state or local tax laws, or (3) violations of other applicable law.
Except as aforesaid, in the event that any such claim, charge, action, complaint
or other proceeding is filed, the Company and NYHC-NJ shall not be entitled to
recover any relief or recovery therefrom, including costs and attorneys' fees.
15. (a) Each of Xxxxx, Xxxxxxxxx and the LLC understands that if this
Agreement were not signed, they would have the right to voluntarily assist other
individuals or entities in bringing claims against the Company Parties. Each of
Xxxxx, Xxxxxxxxx and the LLC hereby waive that right and agree that they will
not provide any such assistance other than assistance in an investigation or
proceeding conducted by a government agency or as required by law.
(b) Each of the Company and NYHC-NJ understands that if this
Agreement were not signed, they would have the right to voluntarily assist other
individuals or entities in bringing claims against the Employee Parties. Each of
the Company and NYHC-NJ hereby waive that right and agree that neither they nor
any of the Company Parties will provide any such assistance other than
assistance in an investigation or proceeding conducted by a government agency or
as required by law.
16. Each of Xxxxx and Xxxxxxxxx agree to return to the Company on the
Resignation Date, their keys, identification and any other equipment (except as
set forth in 7(d)), data file (excluding personal files), documents or materials
belonging to the Company that they have in their possession.
17. In the event that Xxxxx, Xxxxxxxxx or the LLC breach this Agreement,
the Company will be entitled to recover any payment and/or other benefits paid
or payable under this Agreement and to obtain all other relief provided by law
or equity. In the event that the Company or NYHC-NJ breach this Agreement,
Xxxxx, Xxxxxxxxx and the LLC will be entitled to obtain all relief provided by
law or equity. The prevailing party in any litigation resulting from any such
claim shall be entitled to recover reasonable attorneys' fees and expenses of
litigation from the losing party.
18. Each of the Company and NYHC-NJ hereby represents and warrants to
Xxxxx, Xxxxxxxxx and the LLC that:
a. it has full power and authority and the legal right to execute
and deliver, and to perform its obligations under, this Agreement, and has
taken all necessary corporate action to authorize its execution, delivery
and performance of this Agreement;
-10-
b. this Agreement constitutes its legal, valid and binding
obligation, enforceable in accordance with its terms, except as such
enforcement may be limited by any bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting the rights of
creditors generally or for reasons of public policy; and
c. the individual executing and delivering this Agreement on its
behalf has been authorized to do so.
19. This Agreement shall be binding on the parties and their respective
heirs, successors and assigns. This Agreement may be executed in counterparts.
20. This Agreement sets forth the entire agreement among the parties and
their affiliates with respect to the subject matter herein and therein and fully
supersedes any and all prior agreements or understandings between them pursuant
to such subject matters including the Employment Agreements, the Security
Agreement and the Purchase Agreement each of which, as noted above, is hereby
terminated and of no force and effect except, as noted above, that the
obligations under Sections 7 and 8(B) and (C) of the Employment Agreements, as
modified herein, shall continue to be binding upon Xxxxx and Xxxxxxxxx for the
periods stated in the Employment Agreements. Each of Xxxxx and Xxxxxxxxx and the
LLC acknowledge that all amounts given under this Agreement to Xxxxx and
Xxxxxxxxx shall be in full satisfaction of any and all obligations of the
Company or any of its subsidiaries under the Employment Agreements, the Purchase
Agreement, or the Security Agreement. Each of Xxxxx and Xxxxxxxxx also
acknowledge that this Agreement has no effect on the respective non-competition
and non-disclosure agreements entered into by each of them as of April 11, 2005
with Accredited Health Services, Inc.
21. This Agreement may not be modified, altered or changed except upon
express written consent of the parties wherein specific reference is made to
this Agreement.
22. If any provision of this Agreement should be held invalid or
unenforceable by operation of law or by any tribunal of competent jurisdiction,
or if compliance with or enforcement of any provision is restrained by such
tribunal, the application of any and all provisions other than those which have
been held invalid or unenforceable shall not be affected.
23. This Agreement shall be governed and construed in accordance with the
laws of the State of New York (without reference to its rules as to conflicts of
laws). Any dispute arising hereunder shall be brought before a court of
competent jurisdiction in the City, County and State of New York.
24. The parties agree to take all acts necessary and practicable to
implement the terms and conditions set forth or referenced in this Agreement.
25. All notices provided for in this Agreement will be in writing, and
will be deemed to have been duly given when delivered personally to the party to
receive the same, when given
-11-
by telex, telegram or mailgram, or when mailed first class postage prepaid, by
registered or certified mail, return receipt requested, addressed to the party
to receive the same at his or its address set forth below, or such other address
as the party to receive the same will have specified by written notice given in
the manner provided for in this Section 25. All notices will be deemed to have
been given as of the date of personal delivery, transmittal or mailing thereof.
-12-
To the Company and NYHC-NJ: New York Health Care, Inc
C/o The BioBalance Corporation
000 0xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Executive Officer
To Xxxxx and the LLC:
000 Xxxx 00xx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
To Xxxxxxxxx :
000 Xxxx 00xx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
26. Each of Xxxxx and Xxxxxxxxx may revoke this Agreement for a period of
seven (7) days following the day he executes this Agreement. Any revocation
within this period must be submitted, in writing, to Xxxxxx X. X'Xxxxxxx, Chief
Executive Officer, and state, "I hereby revoke my acceptance of our Termination
Agreement and Release." The revocation must be personally delivered to Xx.
X'Xxxxxxx or his designee, or mailed to Xx. X'Xxxxxxx at The BioBalance
Corporation, 000 0xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 and received
by Xx. X'Xxxxxxx within seven (7) days of execution of this Agreement.
Notwithstanding anything to the contrary set forth in this Agreement, this
Agreement shall not become effective or enforceable until the revocation period
has expired (the "Employee Irrevocability Date") and the Xxxxx Payment has been
paid to Xxxxx and the Xxxxxxxxx Payment has been paid to Xxxxxxxxx. If the last
day of the revocation period is a Saturday, Sunday or legal holiday in New York,
then the revocation period shall not expire until the next following day which
is not a Saturday, Sunday or legal holiday (or, if later until the Xxxxx Payment
and Xxxxxxxxx Payment have been paid as aforesaid).
XXXXX AND XXXXXXXXX EACH ACKNOWLEDGE THAT THEY HAVE BEEN ADVISED IN
WRITING THAT THEY HAVE TWENTY-ONE (21) DAYS TO CONSIDER THIS AGREEMENT AND TO
CONSULT WITH AN ATTORNEY PRIOR TO EXECUTION OF THIS AGREEMENT. XXXXX AND
XXXXXXXXX AGREE THAT ANY MODIFICATIONS, MATERIAL OR OTHERWISE, MADE TO THIS
AGREEMENT DO NOT RESTART OR AFFECT IN ANY MANNER THE ORIGINAL TWENTY-ONE (21)
DAY CONSIDERATION PERIOD.
-13-
HAVING ELECTED TO EXECUTE THIS AGREEMENT, TO FULFILL THE PROMISES SET
FORTH HEREIN, AND TO RECEIVE THE SUMS, BENEFITS AND AGREEMENTS SET FORTH HEREIN,
EACH OF THE PARTIES FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTER
INTO THIS AGREEMENT INTENDING TO FOREVER WAIVE, SETTLE AND RELEASE ALL CLAIMS
THEY HAVE OR MIGHT HAVE AGAINST THE OTHER PARTIES HERETO AND THEIR RESPECTIVE
AFFILIATES EXCEPT AS OTHERWISE SET FORTH IN SECTION 13 OF THIS AGREEMENT.
-14-
IN WITNESS WHEREOF, the parties hereto knowingly and voluntarily execute
this Termination Agreement and Release as of the date set forth below:
Sworn to before me this
27 day of July 2005.
/s/ Xxxxxxx Xxxxxxxxxx /s/ Xxxxx Xxxxx
------------------------------ ------------------------------
Notary Public Xxxxx Xxxxx
Date: July 27, 2005
Sworn to before me this
27 day of July 2005.
/s/ Xxxxxxx Xxxxxxxxxx /s/ Xxxxx Xxxxxxxxx
------------------------------ ------------------------------
Notary Public Xxxxx Xxxxxxxxx
Date: July 27, 2005
Sworn to before me this New York Health Care, LLC
27 day of July 2005.
/s/ Xxxxxxx Xxxxxxxxxx By: /s/ Xxxxx Xxxxx
------------------------------ ------------------------------
Notary Public Name: Xxxxx Xxxxx
Title:
Date: July 27, 2005
Sworn to before me this New York Health Care, Inc.
27 day of July 2005.
/s/ Xxxxxxx Xxxxxxx By: /s/ Xxxxxx X. X'Xxxxxxx
------------------------------ ------------------------------
Notary Public Xxxxxx X. X'Xxxxxxx, Chief Executive
Officer
Date: July 27, 2005
-15-
Sworn to before me this NYHC Newco Paxxon, Inc.
27 day of July 2005.
/s/ Xxxxxxx Xxxxxxxxxx By: /s/ Xxxxx Xxxxxxxxx
------------------------------ ------------------------------
Notary Public Name: Xxxxx Xxxxxxxxx
Title: Vice President
Date: July 27, 2005
-16-
Schedule A
Stock Options and Warrants
Xxxxx
Retained Surrendered
-------- -----------
No. of No. of
Shares Shares
Issue Expiration Subject Issue Expiration Subject
Date Date to Option Date Date to Option
-------- ------------ --------------- -------- ---------- ---------
06/02/98 06/01/08 36,667 03/26/96 03/25/06 62,500
12/31/98 12/22/08 23,333 01/02/01 01/01/06 23,750
11/12/99 11/11/09 33,333 02/24/05 02/23/15 500,000
07/10/00 07/09/10 66,667 Total 586,250
01/02/01 01/01/06 42,917
01/02/01 01/01/11 66,667
03/07/03 90 days from 200,000
resignation
09/26/03 90 days from 40,000
resignation
01/28/04 90 days from 200,000
resignation
02/24/05 02/24/10 64,516
(warrants owned
jointly with
spouse)
Total 774,100
-17-
Xxxxxxxxx
Retained Surrendered
-------- -----------
No. of Number
Shares of Shares
Issue Expiration Subject Issue Expiration Subject
Date Date to Option Date Date to Option
-------- ------------ --------------- -------- ---------- ---------
06/02/98 06/01/08 36,667 01/02/01 01/01/06 23,750
12/31/98 12/22/08 23,333 02/24/05 02/23/15 500,000
11/12/99 11/11/09 33,333 Total 523,750
07/10/00 07/09/10 66,667
01/02/01 01/01/06 42,917
01/02/01 01/01/11 66,667
03/07/03 90 days from 200,000
resignation
09/26/03 90 days from 40,000
resignation
01/28/04 90 days from 200,000
resignation
02/24/05 02/24/10 60,484
(warrants owned
by spouse)
Total 770,068
-18-
Exhibit A
EMPLOYMENT AGREEMENT
--------------------
This Agreement made and entered into this 10th day of November, 1999, by and
between New York Health Care, Inc., a New York corporation, with its principal
place of business at 0000 XxXxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000 (hereinafter
"Employer" or the "Company"), and Xxxxx Xxxxxxxxx, an individual whose
residential address is at 000 Xxxx 00xx Xxxxxx, Xxxxxxxx, X.X. 00000
(hereinafter "Employee" or "Executive").
WITNESSETH:
WHEREAS, Employer is engaged in the business of home health care;
WHEREAS, Employee possesses skills, knowledge, abilities and experience which
Employer wishes to continue to avail itself of; and
WHEREAS, Employer wishes to continue the employment of Employee;
NOW, THEREFORE, in consideration of the mutual covenants as set forth herein;
THE PARTIES HERETO AGREE AS FOLLOWS:
1. EMPLOYMENT. Employer hereby shall employ Employee as the Vice President,
Secretary and Chief Operating Officer of the Company and to perform such
additional duties and services as may be assigned to him pursuant to
Paragraph 3 hereof. Employee hereby accepts such employment, upon the terms
and conditions hereinafter set forth.
2. TERM. The term of employment of Employee shall be for five years commencing
as of December 27, 1999, and ending at the close of business December 26,
2004.
3. DUTIES.
(A) Employee's duties shall include assisting the overseeing and directing
of the Company, locating and developing new projects and other
business opportunities for it and generally promoting and facilitating
the Company's business objectives. For purposes of this paragraph,
Employer's subsidiaries, if any, are also encompassed in the term
"Company".
(B) During the term of this Agreement, Employee shall perform such
additional services as shall from time to time be assigned to him by
the Board of Directors and which are consistent with the duties
reasonably assigned to the Vice President, Secretary and Chief
Operating Officer of the type and size the Company.
(C) Employee shall devote his business time and attention, energy, and
skill to the business of Employer.
4. COMPENSATION.
(A) Employer shall pay Employee an annual salary of $186,340 (the "Annual Base
Salary Compensation") with an annual increase in Annual Base compensation,
commencing on the anniversary date of this Agreement (the "Anniversary
Date") and continuing on the Anniversary Date in each year thereafter
during the term of this Agreement, equal to 10% of the prior year's Annual
Base Compensation, payable in accordance with the Company's normal
policies.
(B) Employee shall be granted participation in the Company's 401(k) Plan,
Performance Incentive plan, stock options, insurance, or other plans of the
Corporation which are currently in effect as well as all other benefits
available to any other employee of the Company during the term hereof,
(C) On an annual basis employee shall receive a portion of the 10% pretax Bonus
Plan that the Company has in place for it's executives. Such amount shall
be decided by the Compensation Committee.
(D) Employer shall obtain and thereafter maintain in effect at Employer's
expense the insurance coverage for the benefit of the employee and family
which include, but not be limited to, medical and dental insurance.
Employee shall also receive an annual allowance of $5,000 towards the
payment of premiums of life insurance, and disability insurance, which
insurance may be payable to such beneficiaries as the Employee may direct.
(E) Employer will reimburse Employee or cause him to be reimbursed for all
ordinary and necessary business expenses incurred by him for or on behalf
of Employer in the performance of his duties hereunder. For such purposes
Employee shall submit to Employer periodic reports of such expenses at
least once in each calendar quarter. Employee shall also receive a monthly
allowance of $750 towards the lease cost of an automobile, and the Company
shall also pay for all maintenance, repairs, insurance and all other costs
and expenses thereof.
(F) Employee shall receive annual vacation of four (4) weeks, holidays, twelve
(12) days sick leave, and six (6) days personal leave in each year without
reduction of his compensation or other benefits hereunder. If Employee does
not use all of such paid vacation during such 12 month period, Employee
shall be entitled to receive payment at such time for any unused vacation
days for such period. The Company shall pay Employee at the rate of his
then current basic salary for any unused vacation at the termination of
this Agreement. Employee shall also be entitled to additional personal days
for all Jewish holidays on which work is prohibited in the Orthodox
tradition.
5. CHANGE IN CONTROL
(A) In the event of a "change of control" of the Company. The Company will
provide the following benefits to the employee:
(i) all outstanding options granted to the Executive under the Stock
Option Plan will automatically become immediately vested and
exercisable in full;
(ii) the Executive will receive a lump-sum payment equal to 2.99 times
the average of that executive's base salary and bonus for the
previous five years;
(iii)the Company will pay the cost to transfer ownership to the
Executive of any automobile provided to the Executive by the
Company or for which the Company pays or reimburses the costs of
leasing or other form of ownership; and
(iv) to the extent that any such payments (alone or with other
compensation payable to the Executive, are subject to an excise
tax under Section 4999 of the Internal Revenue Code, or any
successor provision, the Company will make an additional cash
payment to the Executive such that the Executive's net after-tax
compensation is not reduced by such excise tax. Any compensation
payable to Executive contingent on a change of control, and which
qualifies as a "parachute payment" Under Section 280G of the
Internal Revenue Code shall be limited to the maximum amount that
may be paid to that Executive without any part of such
compensation being deemed an "excess parachute payment" under
that section.
(B) For purposes of this paragraph "change in control" shall mean the
following:
(i) the Executive of a transaction or series of transactions in which
persons or entities other than the present shareholders of the
Company acquire a majority in book value of the assets currently
owned by the Company; or a majority of the shares of the
Company's voting equity stock; or the power to designate a
majority of the Company's Board of Directors; or otherwise
acquire the ability, whether by contract, stock ownership or
otherwise, to control the management and policies of the Company;
(ii) the signing of any agreement for the merger or consolidation of
the Company with another corporation or for the sale of all or
substantially all of the assets of the Company; followed by
termination of the Executive within twelve months.
(iv) upon the occurrence of any other event or series of any other
event or series of events which, in the opinion of the Board of
Directors of the Company, will, or is likely to, if carried out,
result in a change of control of the Company.
6. TERMINATION; RIGHTS OF TERMINATION.
This Agreement may be terminated only as provided in this paragraph 6
(A) (i) A notice of resignation by Executive presented to the Company
other than as contemplated in paragraph 6(A) (iii);
(ii) A notice by the Company to Executive of termination for cause
("Cause"), which means:
(a) Executive's willful and continued failure to perform
substantially his duties (other than any such failure
resulting from Executive's Disability (as hereinafter
defined) or any such failure resulting form Executive's
termination for Good Reason (as defined below), after a
written demand for substantial performance is delivered to
Executive by the Board of Directors of the Company which
specifically identifies the manner in which the Board of
Directors believes that Executive has not performed his
duties and the failure of Executive to reasonably comply
with such demand within thirty (30) days of notice to
Executive, or (b) Executive's willful engagement in gross
misconduct materially and demonstrably injurious to the
Company which is not cured by Executive within thirty (30)
days of notice to Executive. For purposes of this
subsection, no act or failure to act on Executive's part
shall be considered "willful" unless it was not in the best
interest of and without a good faith belief that his action
or omission would be in the best interest of the Company.
Executive shall not be terminated for Cause unless and until
there shall have been delivered to Executive a copy of a
resolution duly adopted by the affirmative vote or not less
than two-thirds of the entire membership of the Board of
Directors of the Company finding that in the good faith
opinion of the Board of Directors Executive was guilty of
conduct set forth in clauses (a) or (b) of this subparagraph
(ii) and specifying the particulars thereof in detail;
(iii)(a) a notice by the Company to Executive of termination without
cause, (b) termination as a result of Executive's death, (c) a
notice of termination due to Disability given by the Company to
Executive or by Executive to the Company or (d) a notice of
termination by Executive to the Company (i) for Good Reason, or
(ii) due to the Company's material breach of this Agreement that
continues during the thirty (30) days after Executive gives
written notice to the Company of such breach, which notice
specifically identifies the manner which Executive believes that
the Company breached this Agreement,
(iv) If this Agreement is terminated pursuant to paragraph 6(A) (iii),
the Company shall be obligated to pay to Executive a severance
payment equal to three times the sum of the Executive's annual
Base Salary in effect at the time of termination plus the highest
annual cash bonus (if any) paid by the Company to Executive
during the three-year period preceding the date of termination.
Such severance payment shall be payable in a lump sum payment
within fifteen (15) days of the termination of Executive's
employment. In addition, for the five-year period following
Executive's termination, the Company shall be obligated to
continue to provide Executive with life, health, disability and
accident insurance benefits and all other executive benefits
(including, without limitation, retirement benefits and
automobile and expense allowances) comparable to those provided
to Executive prior to his termination. To the extent Executive is
no longer lawfully eligible for any aforementioned Benefit
because he is no longer employed by the Company, the Company
shall pay to Executive a lump sum cash payment equal to the
present value of the benefits that would have been provided to
Executive had his employment continued for such five-year period.
(v) For purposes of this Agreement, the term "Disability" shall mean
Executive's inability to perform his material duties under this
Agreement because of any illness or physical or mental disability
or other incapacity as evidenced by a written statement of a
physician licensed to practice medicine in any state in the
United States mutually agreed upon by the Company and Executive
which disability or other incapacity continues for a period in
excess of six (6) consecutive months in any consecutive
twelve-month period.
(vi) Upon termination of this Agreement for any reason whatsoever, in
addition to any other rights which Executive may have hereunder,
Executive shall be entitled to receive all of his Base Salary and
a pro-rated portion of his minimum annul bonus under this
Agreement to the date of termination and any unused paid vacation
earned as determined pursuant to paragraph 4(e).
(vii)In the event of termination of this Agreement for any reason
whatsoever, all rights and obligation of the Company and
Executive under this Agreement shall cease immediately, except
for those which by terms specifically apply to periods following
the termination of this Agreement as arise by reason of such
termination, and thereafter Executive shall have no right to
receive any compensation hereunder except, under appropriate
circumstances, as set forth in paragraph 6(A) (iii) and 6(vi)
hereof.)
(B) For the purpose of this paragraph 6, "Good Reason" means any of the
following events unless it occurs with the Executive's express prior
written consent: (i) the assignment to Executive of any duties
inconsistent with, or a diminution of, Executive's position, duties,
titles, offices, responsibilities and status with the Company, or any
removal of Executive or any failure to re-elect Executive to any of
such positions, (ii) a reduction in Executive's Base Salary as in
effect, form time to time, or a failure to increase Executive's Base
Salary as provided in this Agreement; (iii) except with respect to
changes required to maintain its tax-qualified status or changes
generally applicable to all employees of the Company, any failure by
the Company by the Company to continue in effect or make any provision
for any benefit, stock option, annual bonus or contingent loans
arrangements, or other incentive plan or arrangement of any type in
which Executive is participating from time to time, the taking of
which action would adversely affect Executive's participation in or
materially reduce Executive's benefits under any such benefit plan or
arrangement or deprive Executive of any material fringe benefit
enjoyed be Executive from time to time, or the failure to provide
Executive with the number of paid vacation days to which he is
entitled; (v) a relocation of the Company's principal executive
offices or Executive's relocation to any place more than one hundred
(100) miles from the location at which Executive performed his duties
as of the date hereof; or (vi) any failure by the Company to obtain
the assumption of this Agreement by any successor to or assignee or
the Company.
(C) The Company will also transfer ownership of exiting life insurance
policy and beneficiary as per employee's instructions. In addition the
deferred compensation insurance trust will become fully vested, if
applicable, for the Benefit of Employee.
7. CONFIDENTIALITY:
(A) Employee understands and acknowledges that as a result of Employee's
employment with Employer and involvement with the business of
Employer, he shall necessarily become informed of and have access to,
confidential information of Employer including, without limitation,
inventions, trade secrets, technical information, know-how, plans,
specifications, identity of customers and identity of suppliers, and
that such information, even though it may have been or may be
developed or otherwise acquired by Employee, is the exclusive property
of the Employer to be held by Employee in trust and solely for
Employer's benefit and Employee shall not at any time, either during
or subsequent to his employment hereunder, reveal, report, publish,
transfer or otherwise disclose to any person, corporation or other
entity or use any of Employer's confidential information, without its
written consent of the Board of Directors, except for use on behalf of
the Company in connection with its business, and except for such
information which legally and legitimately is or becomes of general
public knowledge from authorized sources other than Employer.
(B) Upon the termination of his employment with Employer for any reason,
Employee shall promptly deliver to it all drawings, manuals, letters,
notes, notebooks, reports and copies thereof and all other materials,
including, without limitation, those of a secret or confidential
nature, relating to Employer's business which are in Employee's
possession or control. Employer shall reimburse employee for any
packing or moving costs reasonably incurred by him in connection with
the foregoing delivery.
8. NON-COMPETITION; RESTRICTIVE COVENANTS AND CONFIDENTIALITY; INJUNCTIVE
RELIEF:
(A) During the term of his employment with Employer pursuant to his
Agreement, or any renewal thereof, Employee shall not, directly or
indirectly whether as principal, agent, shareholder, employee,
officer, director, consultant, joint- venturer, partner or otherwise,
own, manage, operate, join, control or participate in the ownership,
management, operation of, render any services to or be connected in
any manner with any business which is in direct competition with or is
if the type or character of any business engaged in by Employer or
which offers, sells or markets products, projects or services that
directly compete with products or services offered by Employer or any
of its subsidiaries or affiliates, irrespective of whether Employee's
involvement shall be as an office, owner, employee, partner,
joint-venturer, consultant, agent or other participant provided and
from making an investment in any company the securities of which are
listed on a national securities exchange or actively traded in the
over-the-counter market, so long as such investment does not equal or
exceed five percent (5%) of the total number of outstanding shares of
common stock of such company.
(B) For a period of one year after the expiration or termination of his
employment with Employer for any reason, Employee shall not, directly
or indirectly, whether as principal, agent, shareholder, employee,
officer, director, joint-venturer, partner, consultant or otherwise,
render any services to or with any company, firm or individual which
competes in any way with Employer in a business actually engaged in or
being actively developed by it. Under this Agreement, Employer will
have deemed to have been actively developing a business if, with
regard to such proposed business activity, there has been extensive
discussion at Board of Director meetings, formal Board resolutions,
corporate expenditures in excess of $25,000, preparation of marketing
studies or comparable actions related thereto.
(C) For a period of two years following the expiration or termination of
his employment with Employer for any reason, Employee shall not,
directly or indirectly, whether as principal, agent, shareholder,
employee officer, director joint-venturer, partner, consultant or
otherwise, solicit, raid, entice or induce any person who is, or was
at the time of such termination, an Employee of Employer to terminate
his or her employment with the Employer or become employed by any
other person, firm or corporation, and he will not approach any such
employee for such purpose or authorize or knowingly approve the taking
of such action by other persons to become employed in a business who
or which are actively engage in a competitive business.
9. ASSIGNABILITY AND BINDING EFFECT. The rights and obligations arising under
the Agreement shall inure to the benefit of and shall be binding upon the
executors, administrators, successors and legal representatives of Employee
and shall inure to the benefit of and be binding upon Employer, upon its
successors and assigns, but neither this Agreement nor the right or
obligations of Employee hereunder may be assigned, pledged, hypothecated or
otherwise transferred by Employee in whole or in part to another person,
firm or corporation nor may the obligations of Employee hereunder be
delegated.
10. NOTICES. All notices, requests, demands and other communications hereunder
shall be in writing and shall be delivered personally or sent by registered
or certified mail, prepaid and return receipt requested, to the other party
hereto at his or its mailing address as set forth at the beginning of this
Agreement, and in the case of Employer with copies to Xxxxxxx X. Xxxxx,
Esq., Scheichet & Xxxxx, P.C., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
Either party may change the address to which such communications hereunder
shall be sent by sending notice of such change to the other party as herein
provided.
11. REPRESENTATIONS BY EMPLOYER AND EMPLOYEE. Employee hereby represents and
warrants that he is not a party to any other agreement, contract or
understanding, whether of employment or otherwise, which would in any way
restrict or prohibit him form undertaking or performing employment with
Employer in accordance with the terms and conditions of this Agreement.
Employer hereby represents and warrants that this Agreement has been
properly authorized by all necessary corporate action and, when and if,
fully executed, will be binding and enforceable upon the Company in
accordance with its terms except for the application of the laws of
Insolvency and bankruptcy as they may otherwise affect such Agreement.
Employer further represents and warrants that no other contract, agreement,
provision of its certificate of incorporation or bylaws, debt obligations,
law, regulation court or administrative order prevents it form entering
into, or conflicts with, this Agreement.
12. WAIVER. The waiver by either party of any breach or violation of any
provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach or violation, whether singular in nature or not.
13. PRIOR AGREEMENTS; COMPLETE UNDERSTANDING; AMENDMENT. This Agreement cancels
and supersedes any and all prior agreements and understandings, in any,
between the parties hereto regarding the services of Employee to Employer
and constitutes the complete understanding between the parties with respect
to the Employment of Employee hereunder and no statement, representation,
warranty or covenant has been made be either party with respect thereto
except as expressly set forth herein. Employee acknowledges that he has
been afforded the right to review this Agreement with legal counsel prior
to the execution of this Agreement, and that he has been encouraged to do
so. This Agreement shall not be altered, modified or amended except by
written instrument signed by each of the parties hereto.
14. HEADING. The heading set forth in this Agreement are for convenience only
and shall not be considered as part of this Agreement in any respect nor
shall they. In any way affect the substance of any provisions contained in
this Agreement.
15. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall constitute but one and the same agreement.
16. GOVERNING LAW. CONSTRUCTION WITH EXISTING LAW, SEVERABILITY. This Agreement
shall be governed by, and enforced in accordance with, the internal laws of
the State of New York. It is the intention of the parties hereto that all
terms and conditions of this Agreement are in compliance with the laws and
regulations of the state of New York, and nothing in this Agreement shall
be construed to be in derogation of the laws, rules and regulations
thereof. If for any reason any provision of this Agreement or any part
hereof is invalid, unlawful or incapable of being enforced by reason of any
rule of law, equity or public policy, all conditions and provisions of the
Agreement which can be given effect without such invalid, unlawful or
unenforceable provision shall, nevertheless, remain in full force and
effect, and such invalid, unlawful or irrevocable provision shall be
carried out as nearly as possible according to its original terms and
intent, while eliminating such invalidity or non-enforceability.
IN WITNESS WHEREOF, The parties hereto have executed this Agreement
effective as of the day and year first above written.
NEW YORK HEALTH CARE, INC.
BY: _________________________ BY: _______________________
TITLE: XXXXX XXXXXXXXX
AMENDMENT TO EMPLOYMENT AGREEMENT
---------------------------------
This amendment to the Employment Agreement is made and entered into the
28th day of January 2003, by and between New York Health Care, Inc., a New York
corporation, with its principal place of business at 0000 XxXxxxxx Xxxxxx,
Xxxxxxxx, Xxx Xxxx 00000 (hereinafter "Employer" or the "Company"), and Xxxxx
Xxxxxxxxx, an individual whose residential address is at 000 Xxxx 00xx Xxxxxx,
Xxxxxxxx, XX 00000 (hereinafter "Employee").
W I T N E S S E T H :
WHEREAS, the Employer and Employee are parties to an employment agreement
between them dated November 10, 1999 (the "Employment Agreement");
WHEREAS, the Employer and Employee have mutually agreed to amend the
Employment Agreement to the extent provided for herein;
NOW, THEREFORE, in consideration of the mutual covenants as set forth
herein, and other good and valuable consideration, the receipt of which is
hereby acknowledged:
THE PARTIES HERETO AGREE AS FOLLOWS:
1. Paragraph 1 of the Employment Agreement is hereby amended by adding
the following sentence at the end of the paragraph:
"In addition, it is agreed that the Employee is shall be elected as a
member of the Board of Directors of the Employer for the full term of the
Employment Agreement."
2. Paragraph 2 of the Employment Agreement is hereby amended to read as
follows:
"2. Term. The term of employment of the Employee pursuant to the
Employment Agreement shall be extended for an additional period of five years,
so that the term of the Employment Agreement shall be for ten (10) years ending
at the close of business December 26, 2009."
3. Paragraph 5 of the Employment Agreement is hereby amended by adding
the following subparagraph (B)(v):
"(B)(v) The closing of the October 11, 2001 Stock for Stock Exchange
Agreement, as amended, which occurred on January 2, 2003, is deemed to be a
change of control of the Company."
4. Paragraph 6 of the Employment Agreement is hereby amended by adding
the following subparagraph (C):
"(C) In the event of termination of the service of the Employee as a
member of the Board of Directors of the Employer for any reason other than the
death of the Employee, the Employer shall, effective on the date of termination,
enter into a consulting agreement with the Employee, substantially in the form
filed with the Securities and Exchange Commission as an Exhibit to the
Employer's Form S-4 Registration Statement which was declared effective by the
SEC on November 1, 2002, whereby the Employee will provide consulting services
to the Employer on an as-needed basis for a period of not less than five years,
and as compensation for those services will be granted an option to acquire
500,000 shares of the Employer's common stock during a term of not less than ten
(10) years at a price per share equal to the closing price of the Employer's
common stock on the date of such termination, and the shares of common stock
underlying the option shall be promptly registered on SEC Form S-8 or on any
other SEC form appropriate for such registration so that such shares shall have
been fully registered no later than ninety (90) days after termination of the
Employment Agreement."
5. Paragraph 10 of the Employment Agreement is hereby amended to change
the address for copies of notices to Xxxxxxx X. Xxxxx, Esq., to "Scheichet &
Xxxxx, P.C., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000."
6. The Employment Agreement is hereby amended by adding the following
paragraph 18:
"18. Modifications to Employment Agreement Authorized by Resolutions
of the Compensation Committee and Board of Directors. The following
modifications to the Employment Agreement have been implemented prior to the
date of this amendment pursuant to resolutions approved by the New York Health
Care, Inc. Compensation Committee and Board of Directors, as follows:
(a) Effective January 1, 2002, the Employee will be entitled to
forty eight (48) days of compensated absences each year during the term of the
Employment Agreement.
(b) In lieu of the $5,000 annual allowance for insurance premiums
provided in paragraph 4(E) of the Employment Agreement, the Employee will be
paid a $10,000 per annum expense allowance."
7. All Other Provisions Remain Unchanged. Except as specifically
provided for in this amendment to the Employment Agreement, all of the terms and
provisions of the Employment Agreement shall remain in full force and effect
without modification.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year first above written.
NEW YORK HEALTH CARE, INC.
By: /s/ Xxxxx Xxxxx
----------------------
Xxxxx Xxxxx, President
EMPLOYEE:
/s/ Xxxxx Xxxxxxxxx
----------------------
Xxxxx Xxxxxxxxx
EMPLOYMENT AGREEMENT
--------------------
This Agreement made and entered into this 10th day of November, 1999, by and
between New York Health Care, Inc., a New York corporation, with its principal
place of business at 0000 XxXxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000 (hereinafter
"Employer" or the "Company"), and Xxxxx Xxxxx, an individual whose residential
address is at 000 Xxxx 00xx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000 (hereinafter
"Employee" or "Executive").
WITNESSETH:
WHEREAS, Employer is engaged in the business of home health care;
WHEREAS, Employee possesses skills, knowledge, abilities and experience which
Employer wishes to continue to avail itself of; and
WHEREAS, Employer wishes to continue the employment of Employee;
NOW, THEREFORE, in consideration of the mutual covenants as set forth herein;
THE PARTIES HERETO AGREE AS FOLLOWS:
1. EMPLOYMENT. Employer hereby shall employ Employee as the President and
Chief Executive Officer of the Company and to perform such additional
duties and services as may be assigned to him pursuant to Paragraph 3
hereof. Employee hereby accepts such employment, upon the terms and
conditions hereinafter set forth.
2. TERM. The term of employment of Employee shall be for five years commencing
as of December 27, 1999, and ending at the close of business December 26,
2004.
3. DUTIES.
(A) Employee's duties shall include assisting the overseeing and directing
of the Company, locating and developing new projects and other
business opportunities for it and generally promoting and facilitating
the Company's business objectives. For purposes of this paragraph,
Employer's subsidiaries, if any, are also encompassed in the term
"Company".
(B) During the term of this Agreement, Employee shall perform such
additional services as shall from time to time be assigned to him by
the Board of Directors and which are consistent with the duties
reasonably assigned to the President and Chief Executive Officer of
the type and size of the Company.
(C) Employee shall devote his business time and attention, energy and
skill to the business of Employer.
4. COMPENSATION.
(A) Employer shall pay Employee an annual salary of $232,925 (the "Annual Base
Compensation") with an annual increase in Annual Base compensation,
commencing on the first anniversary date of this Agreement (the
"Anniversary Date") and continuing on the Anniversary Date in each year
thereafter during the term of this Agreement, equal to 10% of the prior
year's Annual Base Compensation, payable in accordance with the Company's
normal policies.
(B) Employee shall be granted participation in the Company's 401(k) Plan,
Performance Incentive plan, stock options, insurance or other plans of the
Corporation which are currently in effect as well as all other benefits
available to any other employee of the Company during the term hereof,
(C) On an annual basis employee shall receive a portion of the 10% pretax Bonus
Plan that the Company has in place for it's executives. Such amount shall
be decided by the Compensation Committee.
(D) Employer shall obtain and thereafter maintain in effect at Employer's
expense the insurance coverage for the benefit of the employee and family
which include, but not be limited to, medical and dental insurance.
Employee shall also receive an annual allowance of $5,000 towards the
payment of premiums of life insurance, and disability insurance, which
insurance may be payable to such beneficiaries as the Employee may direct.
(E) Employer will reimburse Employee or cause him to be reimbursed for all
ordinary and necessary business expenses incurred by him for or on behalf
of Employer in the performance of his duties hereunder. For such purposes
Employee shall submit to Employer periodic reports of such expenses at
least once in each calendar quarter. Employee shall also receive a monthly
allowance of $750 towards the lease cost of an Automobile, and the Company
shall also pay for all maintenance, repairs, insurance and all other costs
and expenses thereof.
(F) Employee shall receive annual vacation of four (4) weeks, holidays, twelve
(12) days sick leave, and six (6) days personal leave in each year without
reduction of his compensation or other benefits hereunder. If Employee does
not use all of such paid vacation during such 12 month period, Employee
shall be entitled to receive payment at such time for any unused vacation
days for such period. The Company shall pay Employee at the rate of his
then current basic salary for any unused vacation at the termination of
this Agreement. Employee shall also be entitled to additional personal days
for all Jewish holidays on which work is prohibited in the Orthodox
tradition.
5. CHANGE IN CONTROL
(A) In the event of a "change of control" of the Company. The Company will
provide the following benefits to the employee:
(i) all outstanding options granted to the Executive under the Stock
Option Plan will automatically become immediately vested and
exercisable in full;
(ii) the executive will receive a lump-sum payment equal to 2.99 times
the average of that Executive's base salary and bonus for the
previous five years;
(iii)the Company will pay the cost to transfer ownership to the
Executive of any automobile provided to the Executive by the
Company or for which the Company pays or reimburses the costs of
leasing or other form of ownership; and
(iv) to the extent that any such payments (alone or with other
compensation payable to the Executive, are subject to an excise
tax under Section 4999 of the Internal Revenue Code, or any
successor provision, the Company will make an additional cash
payment to the Executive such that the executive's net after-tax
compensation is not reduced by such excise tax. Any compensation
payable to Executive contingent on a change of control, and which
qualifies as a "parachute payment" Under Section 280G of the
Internal Revenue Code shall be limited to the maximum amount that
may be paid to Executive without any part of such compensation
being deemed an "excess parachute payment" under that section.
(B) For purposes of this paragraph "change in control" shall mean the
following:
(i) the Executive of a transaction or series of transactions in which
persons or entities other than the present shareholders of the
Company acquire a majority in book value of the assets currently
owned by the Company; or a majority of the shares of the
Company's voting equity stock; or the power to designate a
majority of the Company's Board of Directors; or otherwise
acquire the ability, whether by contract, stock ownership or
otherwise, to control the management and policies of the Company;
(ii) the signing of any agreement for the merger or consolidation of
the Company with another corporation or for the sale of all or
substantially all of the assets of the Company; followed by
termination of the Executive within twelve months.
(iv) upon the occurrence of any other event or series of any other
event or series of events which, in the opinion of the Board of
Directors of the Company, will, or is likely to, if carried out,
result in a change of control of the Company.
6. TERMINATION; RIGHTS OF TERMINATION.
This Agreement may be terminated only as provided in this paragraph 6
(A) (i) A notice of resignation by Executive presented to the Company
other than as contemplated in paragraph 6(A) (iii).
(ii) A notice by the Company to Executive of termination for cause
("Cause"), which means:
(a) Executive's willful and continued failure to perform
substantially his duties (other than any such failure
resulting from Executive's Disability as hereinafter
defined) or any such failure resulting form Executive's
termination for Good Reason (as defined below), after a
written demand for substantial performance is delivered to
Executive by the Board of Directors of the Company which
specifically identifies the manner in which the Board of
Directors believes that Executive has not performed his
duties and the failure of Executive to reasonably comply
with such demand within thirty (30) days of notice to
Executive, or (b) Executive's willful engagement in gross
misconduct materially and demonstrably injurious to the
Company which is not cured by Executive within thirty (30)
days of notice to Executive. For purposes of this
subsection, no act or failure to act on Executive's part
shall be considered "willful" unless it was not in the best
interest of and without a good faith belief that his action
or omission would be in the best interest of the Company.
Executive shall not be terminated for Cause unless and until
there shall have been delivered to Executive a copy of a
resolution duly adopted by the affirmative vote or not less
than two-thirds of the entire membership of the Board of
Directors of the Company finding that in the good faith
opinion of the Board of Directors Executive was guilty of
conduct set forth in clauses (a) or
(b) of this subparagraph 6(A) (ii) and specifying the
particulars thereof in detail;
(iii)(a) a notice by the Company to Executive of termination without
cause, (b) termination as a result of Executive's death, (c) a
notice of termination due to Disability given by the Company to
Executive or (d) a notice of termination by Executive to the
Company (i) for Good Reason, or (ii) due to the Company's
material breach of this Agreement that continues during the
thirty (30) days after Executive gives written notice to the
Company of such breach, which notice specifically identifies the
manner in which Executive believes that the Company breached this
Agreement,
(iv) If this Agreement is terminated pursuant to paragraph 6(A) (iii),
the Company shall be obligated to pay to Executive a severance
payment equal to three times the sum of the Executive's annual
Base Salary in effect at the time of termination plus the highest
annual cash bonus (if any) paid by the Company to Executive
during the three-year period preceding the date of termination.
Such severance payment shall be payable in a lump sum payment
within fifteen (15) days of the termination of Executive's
employment. In addition, for the five-year period following
Executive's termination, the Company shall be obligated to
continue to provide Executive with life, health, disability and
accident insurance benefits and all other executive benefits
(including, without limitation, retirement benefits and
automobile and expense allowances) comparable to those provided
to Executive prior to his termination. To the extent Executive is
no longer lawfully eligible for any aforementioned Benefit
because he is no longer employed by the Company, the Company
shall pay to Executive a lump sum cash payment equal to the
present value of the benefits that would have been provided to
Executive had his employment continued for such five-year period.
(v) For purposes of this Agreement, the term "Disability" shall mean
Executive's inability to perform his material duties under this
Agreement because of any illness or physical or mental disability
or other incapacity as evidenced by a written statement of a
physician licensed to practice medicine in any state in the
United States mutually agreed upon by the Company and Executive
which disability or other incapacity continues for a period in
excess of six (6) consecutive months in any consecutive
twelve-month period.
(vi)Upon termination of this Agreement for any reason whatsoever, in
addition to any other rights which Executive may have hereunder,
Executive shall be entitled to receive all of his Base Salary and
a pro-rated portion of his minimum annul bonus under this
Agreement to the date of termination and any unused paid vacation
earned as determined pursuant to paragraph 4(e).
(vii)In the event of termination of this Agreement for any reason
whatsoever, all rights and obligation of the Company and
Executive under this Agreement shall cease immediately, except
for those which by terms specifically apply to periods following
the termination of this Agreement as arise by reason of such
termination, and thereafter Executive shall have no right to
receive any compensation hereunder except, under appropriate
circumstances, as set forth in paragraph 6(A) (iii) and 6(vi)
hereof.)
(C) For the purpose of this paragraph 6, "Good Reason" means any of the
following events unless it occurs with the Executive's express prior
written consent: (i) the assignment to Executive of any duties
inconsistent with, or a diminution of, Executive's position, duties,
titles, offices, responsibilities and status with the Company, or any
removal of Executive or any failure to re-elect Executive to any of
such positions, (ii) a reduction in Executive's Base Salary as in
effect, form time to time, or a failure to increase Executive's Base
Salary as provided in this Agreement; (iii) except with respect to
changes required to maintain its tax-qualified status or changes
generally applicable to all employees of the Company, any failure by
the Company by the Company to continue in effect or make any provision
for any benefit, stock option, annual bonus or contingent loans
arrangements, or other incentive plan or arrangement of any type in
which Executive is participating from time to time, the taking of
which action would adversely affect Executive's participation in or
materially reduce Executive's benefits under any such benefit plan or
arrangement or deprive Executive of any material fringe benefit
enjoyed be Executive from time to time, or the failure to provide
Executive with the number of paid vacation days to which he is
entitled; (v) a relocation of the Company's principal executive
offices or Executive's relocation to any place more than one hundred
(100) miles from the location at which Executive performed his duties
as of the date hereof; or (vi) any failure by the Company to obtain
the assumption of this Agreement by any successor to or assignee or
the Company.
(C) The Company will also transfer ownership of exiting life insurance
policy and beneficiary as per employee's instructions. In addition the
deferred compensation insurance trust will become fully vested, if
applicable, for the Benefit of Employee.
7. CONFIDENTIALITY:
(A) Employee understands and acknowledges that as a result of Employee's
employment with Employer and involvement with the business of
Employer, he shall necessarily become informed of and have access to,
confidential information of Employer including, without limitation,
inventions, trade secrets, technical information, know-how, plans,
specifications, identity of customers and identity of suppliers, and
that such information, even though it may have been or may be
developed or otherwise acquired by Employee, is the exclusive property
of the Employer to be held by Employee in trust and solely for
Employer's benefit and Employee shall not at any time, either during
or subsequent to his employment hereunder, reveal, report, publish,
transfer or otherwise disclose to any person, corporation or other
entity or use any of Employer's confidential information, without its
written consent of the Board of Directors, except for use on behalf of
the Company in connection with its business, and except for such
information which legally and legitimately is or becomes of general
public knowledge from authorized sources other than Employer.
(B) Upon the termination of his employment with Employer for any reason,
Employee shall promptly deliver to it all drawings, manuals, letters,
notes, notebooks, reports and copies thereof and all other materials,
including, without limitation, those of a secret or confidential
nature, relating to Employer's business which are in Employee's
possession or control. Employer shall reimburse employee for any
packing or moving costs reasonably incurred by him in connection with
the foregoing delivery.
8. NON-COMPETITION; RESTRICTIVE COVENANTS AND CONFIDENTIALITY; INJUNCTIVE
RELIEF:
(A) During the term of his employment with Employer pursuant to his
Agreement, or any renewal thereof, Employee shall not, directly or
indirectly whether as principal, agent, shareholder, employee,
officer, director, consultant, joint- venturer, partner or otherwise,
own, manage, operate, join, control or participate in the ownership,
management, operation of, render any services to or be connected in
any manner with any business which is in direct competition with or is
if the type or character of any business engaged in by Employer or
which offers, sells or markets products, projects or services that
directly compete with products or services offered by Employer or any
of its subsidiaries or affiliates, irrespective of whether Employee's
involvement shall be as an office, owner, employee, partner,
joint-venturer, consultant, agent or other participant provided and
from making an investment in any company the securities of which are
listed on a national securities exchange or actively traded in the
over-the-counter market, so long as such investment does not equal or
exceed five percent (5%) of the total number of outstanding shares of
common stock of such company.
(B) For a period of one year after the expiration or termination of his
employment with Employer for any reason, Employee shall not, directly
or indirectly, whether as principal, agent, shareholder, employee,
officer, director, joint-venturer, partner, consultant or otherwise,
render any services to or with any company, firm or individual which
competes in any way with Employer in a business actually engaged in or
being actively developed by it. Under this Agreement, Employer will
have deemed to have been actively developing a business if, with
regard to such proposed business activity, there has been extensive
discussion at Board of Director meetings, formal Board resolutions,
corporate expenditures in excess of $25,000, preparation of marketing
studies or comparable actions related thereto.
(C) For a period of two years following the expiration or termination of
his employment with Employer for any reason, Employee shall not,
directly or indirectly, whether as principal, agent, shareholder,
employee officer, director joint-venturer, partner, consultant or
otherwise, solicit, raid, entice or induce any person who is, or was
at the time of such termination, an Employee of Employer to terminate
his or her employment with the Employer or become employed by any
other person, firm or corporation, and he will not approach any such
employee for such purpose or authorize or knowingly approve the taking
of such action by other persons to become employed in a business who
or which are actively engage in a competitive business.
9. ASSIGNABILITY AND BINDING EFFECT. The rights and obligations arising under
the Agreement shall inure to the benefit of and shall be binding upon the
executors, administrators, successors and legal representatives of Employee
and shall inure to the benefit of and be binding upon Employer, upon its
successors and assigns, but neither this Agreement nor the right or
obligations of Employee hereunder may be assigned, pledged, hypothecated or
otherwise transferred by Employee in whole or in part to another person,
firm or corporation nor may the obligations of Employee hereunder be
delegated.
10. NOTICES. All notices, requests, demands and other communications hereunder
shall be in writing and shall be delivered personally or sent by registered
or certified mail, prepaid and return receipt requested, to the other party
hereto at his or its mailing address as set forth at the beginning of this
Agreement, and in the case of Employer with copies to Xxxxxxx X. Xxxxx,
Esq., Scheichet & Xxxxx, P.C., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
Either party may change the address to which such communications hereunder
shall be sent by sending notice of such change to the other party as herein
provided.
11. REPRESENTATIONS BY EMPLOYER AND EMPLOYEE. Employee hereby represents and
warrants that he is not a party to any other agreement, contract or
understanding, whether of employment or otherwise, which would in any way
restrict or prohibit him form undertaking or performing employment with
Employer in accordance with the terms and conditions of this Agreement.
Employer hereby represents and warrants that this Agreement has been
properly authorized by all necessary corporate action and, when and if,
fully executed, will be binding and enforceable upon the Company in
accordance with its terms except for the application of the laws of
Insolvency and bankruptcy as they may otherwise affect such Agreement.
Employer further represents and warrants that no other contract, agreement,
provision of its certificate of incorporation or bylaws, debt obligations,
law, regulation court or administrative order prevents it form entering
into, or conflicts with, this Agreement.
12. WAIVER. The waiver by either party of any breach or violation of any
provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach or violation, whether singular in nature or not.
13. PRIOR AGREEMENTS; COMPLETE UNDERSTANDING; AMENDMENT. This Agreement cancels
and supersedes any and all prior agreements and understandings, in any,
between the parties hereto regarding the services of Employee to Employer
and constitutes the complete understanding between the parties with respect
to the Employment of Employee hereunder and no statement, representation,
warranty or covenant has been made be either party with respect thereto
except as expressly set forth herein. Employee acknowledges that he has
been afforded the right to review this Agreement with legal counsel prior
to the execution of this Agreement, and that he has been encouraged to do
so. This Agreement shall not be altered, modified or amended except by
written instrument signed by each of the parties hereto.
14. HEADING. The heading set forth in this Agreement are for convenience only
and shall not be considered as part of this Agreement in any respect nor
shall they. In any way affect the substance of any provisions contained in
this Agreement.
15. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall constitute but one and the same agreement.
16. GOVERNING LAW. CONSTRUCTION WITH EXISTING LAW, SEVERABILITY. This Agreement
shall be governed by, and enforced in accordance with, the internal laws of
the State of New York. It is the intention of the parties hereto that all
terms and conditions of this Agreement are in compliance with the laws and
regulations of the state of New York, and nothing in this Agreement shall
be construed to be in derogation of the laws, rules and regulations
thereof. If for any reason any provision of this Agreement or any part
hereof is invalid, unlawful or incapable of being enforced by reason of any
rule of law, equity or public policy, all conditions and provisions of the
Agreement which can be given effect without such invalid, unlawful or
unenforceable provision shall, nevertheless, remain in full force and
effect, and such invalid, unlawful or irrevocable provision shall be
carried out as nearly as possible according to its original terms and
intent, while eliminating such invalidity or non-enforceability.
IN WITNESS WHEREOF, The parties hereto have executed this Agreement
effective as of the day and year first above written.
NEW YORK HEALTH CARE, INC.
BY: _________________________ BY:__________________________
TITLE: XXXXX XXXXX
AMENDMENT TO EMPLOYMENT AGREEMENT
---------------------------------
This amendment to the Employment Agreement is made and entered into the
28th day of January 2003, by and between New York Health Care, Inc., a New York
corporation, with its principal place of business at 0000 XxXxxxxx Xxxxxx,
Xxxxxxxx, Xxx Xxxx 00000 (hereinafter "Employer" or the "Company"), and Xxxxx
Xxxxx, an individual whose residential address is at 000 Xxxx 00xx Xxxxxx,
Xxxxxxxx, XX 00000 (hereinafter "Employee").
W I T N E S S E T H :
WHEREAS, the Employer and Employee are parties to an employment agreement
between them dated November 10, 1999 (the "Employment Agreement");
WHEREAS, the Employer and Employee have mutually agreed to amend the
Employment Agreement to the extent provided for herein;
NOW, THEREFORE, in consideration of the mutual covenants as set forth
herein, and other good and valuable consideration, the receipt of which is
hereby acknowledged:
THE PARTIES HERETO AGREE AS FOLLOWS:
1. Paragraph 1 of the Employment Agreement is hereby amended by adding
the following sentence at the end of the paragraph:
"In addition, it is agreed that the Employee shall be elected as a member
of the Board of Directors of the Employer for the full term of the Employment
Agreement."
2. Paragraph 2 of the Employment Agreement is hereby amended to read as
follows:
"2. Term. The term of employment of the Employee pursuant to the
Employment Agreement shall be extended for an additional period of five years,
so that the term of the Employment Agreement shall be for ten (10) years ending
at the close of business December 26, 2009."
3. Paragraph 5 of the Employment Agreement is hereby amended by adding
the following subparagraph (B)(v):
"(B)(v) The closing of the October 11, 2001 Stock for Stock Exchange
Agreement, as amended, which occurred on January 2, 2003, is deemed to be a
change of control of the Company."
4. Paragraph 6 of the Employment Agreement is hereby amended by adding
the following subparagraph (C):
"(C) In the event of termination of the service of the Employee as a
member of the Board of Directors of the Employer for any reason other than the
death of the Employee, the Employer shall, effective on the date of termination,
enter into a consulting agreement with the Employee, substantially in the form
filed with the Securities and Exchange Commission as an Exhibit to the
Employer's Form S-4 Registration Statement which was declared effective by the
SEC on November 1, 2002, whereby the Employee will provide consulting services
to the Employer on an as-needed basis for a period of not less than five years,
and as compensation for those services will be granted an option to acquire
500,000 shares of the Employer's common stock during a term of not less than ten
(10) years at a price per share equal to the closing price of the Employer's
common stock on the date of such termination, and the shares of common stock
underlying the option shall be promptly registered on SEC Form S-8 or on any
other SEC form appropriate for such registration so that such shares shall have
been fully registered no later than ninety (90) days after termination of the
Employment Agreement."
5. Paragraph 10 of the Employment Agreement is hereby amended to change
the address for copies of notices to Xxxxxxx X. Xxxxx, Esq., to "Scheichet &
Xxxxx, P.C., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000."
2
6. The Employment Agreement is hereby amended by adding the following
paragraph 18:
"18. Modifications to Employment Agreement Authorized by Resolutions
of the Compensation Committee and Board of Directors. The following
modifications to the Employment Agreement have been implemented prior to the
date of this amendment pursuant to resolutions approved by the New York Health
Care, Inc. Compensation Committee and Board of Directors, as follows:
(a) Effective January 1, 2002, the Employee will be entitled to forty
eight (48) days of compensated absences each year during the term of the
Employment Agreement.
(b) In lieu of the $5,000 annual allowance for insurance premiums
provided in paragraph 4(E) of the Employment Agreement, the Employee will be
paid a $10,000 per annum expense allowance."
7. All Other Provisions Remain Unchanged. Except as specifically
provided for in this amendment to the Employment Agreement, all of the terms and
provisions of the Employment Agreement shall remain in full force and effect
without modification.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year first above written.
NEW YORK HEALTH CARE, INC.
By: /s/ Xxxxx Xxxxxxxxx
-------------------------------
Xxxxx Xxxxxxxxx, Vice President
EMPLOYEE:
/s/ Xxxxx Xxxxx
------------------------
Xxxxx Xxxxx
3
EXHIBIT B
AGREEMENT
AGREEMENT (this "Agreement"), dated the 24th day of February, 2005, by and
among New York Health Care, Inc., a New York corporation (the "Seller"), NYHC
Newco Paxxon, Inc., a New York corporation ("NYHC-NJ"), Xxxxx Xxxxx ("Xxxxx")
and Xxxxx Xxxxxxxxx ("Xxxxxxxxx" and, together with Xxxxx, collectively, the
"Secured Party")). Capitalized terms used herein which are not otherwise defined
shall have the respective meanings ascribed thereto in the Purchase Agreement
(as defined below).
WHEREAS, pursuant to that certain Purchase Agreement, dated as of July 15,
2004, by and among the Seller, NYHC-NJ and New York Health Care, LLC (the
"Purchaser"), an entity controlled by Xxxxx and Xxxxxxxxx (the "Purchase
Agreement"), the Seller agreed, upon the fulfillment of certain conditions, to
sell its home health care business (the "Business") to the Purchaser;
WHEREAS, as an inducement to allow the Seller to complete the private
placement contemplated by Section 2.02(h) of the Purchase Agreement (the
"Private Placement"), Xxxxx and Xxxxxxxxx have agreed to resign from the Board
of Directors of the Seller and as executive officers of the Seller upon the
consummation of such private placement, notwithstanding the fact that those
actions would be considered resignation for good reason under Xxxxx'x and
Xxxxxxxxx'x respective Employment Agreement and would obligate the Seller to
make certain payments under such Employment Agreements (the "Payments");
WHEREAS, Xxxxx and Xxxxxxxxx have agreed to defer receipt of the Payments
from the Seller and agree to forego such Payments in consideration of the
consummation of the sale of the Business by the Seller and NYHC-NJ to the
Purchaser under the Purchase Agreement;
WHEREAS, the parties hereto desire to set forth the payments that would
payable by Seller and NYHC-NJ to Xxxxx and Xxxxxxxxx under certain circumstances
relating to the Purchase Agreement and the Employment Agreements; and
WHEREAS, as security for the obligations of the Seller and NYHC-NJ to
consummate the purchase of the Business under the Purchase Agreement (the
"Purchase") and the obligations of the Seller under the Employment Agreements
and this Agreement (the "Obligations"), the Seller and NYHC-NJ have agreed to
grant to the Secured Party a security interest in the Collateral (as defined
below);
NOW, THEREFORE, in consideration of the benefits accruing to the Seller
and NYHC-NJ, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Seller and NYHC-NJ covenant
and agree with Xxxxx and Xxxxxxxxx as follows:
1. Definition of Triggering Event. For the purposes of this Agreement a
"Triggering Event" shall mean any of the following:
(a) the Seller or NYHC-NJ breaches the terms of the Purchase
Agreement and such breach is not cured within the time period provided for the
cure of such breach under the Purchase Agreement; provided, however, that for
purposes of this Section 1(a), it shall not be considered a breach of the
Purchase Agreement if (x) the Seller and NYHC-NJ sell their home health care
business in the state of New Jersey to an unaffiliated third party for a cash
purchase price of no less than $2.7 million (the "NJ Sale") and (y) the Purchase
Agreement is amended by the parties thereto to state that the Purchaser will
purchase the assets of the Seller's and NYHC-NJ's home health care business in
the state of New York in exchange for the assumption of liabilities and
contracts and extinguishment of any payment obligations of the Seller under the
Employment Agreement and that the purchase contemplated thereunder and the NJ
Sale shall take place simultaneously;
(b) a change in the majority of the Board of Directors of the Seller
(other than as a result of (x) the resignations of Xxxxx and Xxxxxxxxx, (y) a
reduction in the number of members of the Board of Directors of the Seller
resulting from death, disability or resignation of a member or (z) the addition
of any directors that have been expressly approved in writing by the Secured
Party);
(c) any other event that would be considered a change in control or
would be considered "good reason" for the resignation of Xxxxx or Xxxxxxxxx
under the Employment Agreements occurs after the date of this Agreement;
provided, however; that for purposes of this Section 1(c), the resignations of
Xxxxx and Xxxxxxxxx in connection with the Private Placement shall not be
considered a Triggering Event; or
(d) the Purchase Agreement is terminated or the transactions
contemplated thereby are not consummated before December 31, 2005, including,
without limitation, as a result of failure of Seller to receive approval of the
transaction from its shareholders; provided, however, that for purposes of this
Section 1(d), the termination of the Purchase Agreement or the failure to
consummate the transactions contemplated under the Purchase Agreement as a
result of a breach of the Purchase Agreement by, or a failure to act of, the
Purchaser or Xxxxx or Xxxxxxxxx, shall not be considered a Triggering Event.
2. Obligations upon Triggering Event.
(a) Upon the occurrence of the Triggering Event set forth in Section
1(a) above, the Seller and NYHC-NJ shall promptly pay to Xxxxx and Xxxxxxxxx the
aggregate amount due to them under the Employment Agreements in case of
resignation for "good reason" and shall pay to the Purchaser an aggregate of
$250,000 in liquidated damages with respect to such breach.
(b) Upon the occurrence of the Triggering Event set forth in Section
1(b) above, the Seller and NYHC-NJ shall promptly pay to Xxxxx and Xxxxxxxxx the
aggregate amount due to them upon a "change in control" and a "resignation for
good reason" under the Employment Agreements.
(c) Upon the occurrence of the Triggering Event set forth in Section
1(c) above, the Seller and NYHC-NJ shall promptly pay to Xxxxx and Xxxxxxxxx the
aggregate amount due to them under the Employment Agreements; provided, that if
Xxxxx and Xxxxxxxxx receive payments pursuant to Section 2(b), they shall not be
entitled to payments under this Section 2(c).
- 2 -
(d) Upon the occurrence of the Triggering Event set forth in Section
1(d) above, the Seller and NYHC-NJ shall promptly pay to Xxxxx and Xxxxxxxxx the
aggregate amount due to them upon a "resignation for good reason" under the
Employment Agreements.
(e) Upon receipt of the payments set forth in any of Sections
2(a)-(d), Xxxxx and Xxxxxxxxx hereby agree that Seller and NYHC-NJ shall be
released from their obligations under the Purchase Agreement, the Employment
Agreements and this Agreement.
3. Security Interest. The Seller and NYHC-NJ, as security for the
consummation of the Purchase and the due and punctual completion of payment of
the Obligations, hereby assign, grant, convey, pledge and set over to the Xxxxx
and Xxxxxxxxx and xxxxx to the Xxxxx and Xxxxxxxxx a security interest in all of
the right, title and interest of the Seller and NYHC-NJ in the Collateral.
4. Definition of Collateral. As used herein, the term "Collateral" shall
mean with respect to the Seller and NYHC-NJ, all amounts deposited in the
Collateral Account (as defined below) and all of the other assets of the
Business.
5. Remedies in Case of Event of Default.
(a) Subject to Section 5(d) below, if an Event of Default (as
defined below) shall have occurred and be continuing, the Secured Party shall be
entitled to exercise all of the rights, powers and remedies for the protection
and enforcement of its rights in respect of the Collateral at law or equity and,
in addition, the Secured Party may, without being required to give any notice,
except as herein provided or as may be required by mandatory provisions of law,
sell the Collateral, or any part thereof, at public or private sale, for cash,
upon credit or for future delivery, and at such price or prices as the Secured
Party may deem commercially reasonable. The Secured Party shall have the right
to take immediate possession of the Collateral. The Seller and NYHC-NJ hereby
expressly consent to such repossession of the Collateral and waive all rights to
demand any notice with respect thereto.
(b) For purposes of this Agreement, an "Event of Default" shall mean
the occurrence of a Triggering Event.
(c) Limitations on Rights in Collateral. The rights of the Secured
Party to take possession of or sell the Collateral pursuant to this Agreement
shall be limited to the Obligations set forth in Section 2 of this Agreement.
6. Cash Collateral Account. The Seller and NYHC-NJ shall deposit an amount
equal to $3.55 million upon the execution of this agreement into an
interest-bearing cash collateral account at [Citibank, N.A.], in favor of the
Secured Party (together with any interest earned thereon, the "Collateral
Account"), pursuant to the terms of a Control Agreement in a form to be agreed
upon by the parties hereto which shall provide that the Seller shall not
withdraw such funds without the prior written consent of the Secured Party.
- 3 -
7. Power of Attorney. Upon the occurrence and during the continuance of an
Event of Default, the Seller and NYHC-NJ hereby appoint Secured Party and any
designee of Secured Party as their attorney-in-fact, at Seller's own cost and
expense, to exercise at any time after the occurrence of an Event of Default all
or any of the powers, authorities, and discretions conferred on or reserved to
Secured Party by or pursuant to this Agreement or applicable law, and (without
prejudice to the generality of any of the foregoing) to seal and deliver or
otherwise perfect any deed, assurance, agreements, instrument or act as Secured
Party may deem proper in or for the purpose of exercising any of such powers,
authorities or discretions. The Seller and NYHC-NJ hereby ratify and confirm,
and hereby agree to ratify and confirm, whatever lawful acts Secured Party or
any of Secured Party's sub-agents or attorneys shall do or purport to do in the
exercise of the power of attorney granted to Secured Party pursuant to this
Agreement, which power of attorney, being given for consideration, is
irrevocable.
8. Board of Directors. Notwithstanding anything to the contrary contained
herein or in any other agreement, Xxxxx and Xxxxxxxxx hereby agree that they
will no longer serve as directors or executive officers of the Seller.
9. Miscellaneous. This Agreement shall create a continuing security
interest in the Collateral and shall be binding upon the successors and assigns
of the Seller and NYHC-NJ and shall inure to the benefit of and be enforceable
by Secured Party and its permitted successors and assigns. The headings in this
Agreement are for purposes of reference only and shall not limit or define the
meaning hereof. This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which shall constitute one
instrument. In the event that any provision of this Agreement shall prove to be
invalid or unenforceable, such provision shall be deemed to be severable from
the other provisions of this Agreement which shall remain binding on all parties
hereto. This Agreement contains the entire agreement between the parties hereto
with respect to the subject matter hereof and supersedes all prior agreements or
understandings among the parties related to such matters. This Agreement may be
amended or modified only by a writing signed by both parties hereto. This
Agreement is not assignable or transferable by either party.
10. Financing Statements. The Seller and NYHC-NJ hereby authorize the
Secured Party to file any initial financing statements and any amendments
thereto or continuations thereof and to give any notices necessary or desirable
to perfect the security interest of the Secured Party in the Collateral, in all
cases without the signature of the Seller or NYHC-NJ or to execute such items as
attorney-in-fact for either of them.
11. Further Assurances. Upon the request of the Secured Party, the Seller
and NYHC-NJ hereby agree to duly and promptly execute and deliver, or cause to
be duly executed and delivered, such further instruments as may be necessary or
proper, in the reasonable judgment of the Secured Party, to carry out the
provisions and purposes of this Agreement or to perfect and preserve the
security interest of the Secured Party hereunder, in the Collateral or any
portion thereof.
- 4 -
12. Termination and Release. Upon such time, if any, as (a) the Purchase
shall be consummated or (b) the Seller or NYHC-NJ shall pay, satisfy or
otherwise discharge in full the Obligations, this Agreement shall be null and
void and the security interests granted hereunder shall terminate. Upon request
by the Seller and NYHC-NJ after such termination, the Secured Party will take
all reasonable action and do all things reasonably necessary, including
executing and filing termination statements and copyright mortgage releases, and
executing terminations of powers of attorney to terminate the security interest
granted to it hereunder.
13. Payment of Costs; Interest. In the event of any breach of this
Agreement by the Seller or NYHC-NJ or any dispute relating to this Agreement,
the Seller shall pay all costs and expenses, including, but not limited to,
reasonable attorneys' fees, incurred by the Secured Parties in connection with
the resolution of such breach or dispute. In addition, in the event of any
breach or dispute, any interest that accrues on the funds in the Collateral
Account shall be paid to the Secured Party.
14. Governing Law. This Agreement shall be construed in accordance with,
and governed by, the laws of the State of New York as applied to contracts made
and to be performed entirely in the State of New York, without regard to
principles of conflicts of law
15. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, and all of which together shall constitute a
single agreement. This Agreement may be evidenced by facsimile signatures.
16. Severability. In the event that any one or more of the immaterial
provisions contained in this Agreement shall for any reason be held to be
invalid, illegal or unenforceable, the same shall not affect any other provision
of this Agreement, but this Agreement shall be construed in a manner which, as
nearly as possible, reflects the original intent of the parties.
17. No Prejudice. This Agreement has been jointly prepared by the parties
hereto and the terms hereof shall not be construed in favor of or against any
party on account of its participation in such preparation.
18. Amendment and Modification. This Agreement may be amended or modified
only by written agreement executed by each of the parties hereto.
- 5 -
IN WITNESS WHEREOF, the Seller, NYHC-NJ, Xxxxx and Xxxxxxxxx have caused
this Agreement to be executed as of the date first above written.
NEW YORK HEALTH CARE, INC.
By: /s/ Xxxx X. Xxxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chairman of the Board
NYHC NEWCO PAXXON, INC.
By: /s/ Xxxxx Xxxxxxxxx
------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Sec
/s/ Xxxxx Xxxxx
------------------------------
Xxxxx Xxxxx
/s/ Xxxxx Xxxxxxxxx
------------------------------
Xxxxx Xxxxxxxxx
- 6 -
