EXHIBIT 10.6
CONSULTING AGREEMENT
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THIS CONSULTING AGREEMENT (this "Agreement") is made and entered into
this 15th day of March, 1999, by and between William McBride III (the
"Executive") and Assisted Living Concepts, Inc., a Nevada corporation (the
"Company").
RECITALS
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A. The Executive and the Company have previously entered into an
Employment Agreement, dated as of October 3, 1997 (the "Employment Agreement"),
pursuant to which the Executive is currently employed by the Company as its
Chief Executive Officer.
B. The Executive and the Company desire to specify the terms of the
Executive's resignation from his office as Chief Executive Officer of the
Company and as an employee of the Company, and to provide for the termination of
the Employment Agreement and the Restricted Stock Agreement (as defined below).
C. The Executive is a person whose skills, experience and training
have proved of considerable use to the Company, and the Company wishes to secure
the services of the Executive as a consultant to the Company as provided herein.
D. The Executive is willing to act as a consultant for the benefit of
the Company and to perform the services and to subject himself to the
obligations provided herein, upon the terms and subject to the conditions
hereinafter set forth.
AGREEMENT
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NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
promises contained herein, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:
1. RESIGNATION; PRIOR AGREEMENTS
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1.1. Resignation. The Executive hereby tenders, and the Company
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hereby accepts, the Executive's resignations from (a) his positions as the Chief
Executive Officer and an employee of the Company, and (b) his position as an
officer and/or employee of any and all subsidiaries and affiliates of the
Company, effective as of the close of business on March 15, 1999.
Notwithstanding anything contained herein or in the Employment Agreement, the
Executive's resignation hereunder shall not be deemed either a resignation for
"Good Reason" or a termination for "Cause" for purposes of, and each as defined
in, the Employment Agreement.
1.2. Termination of Employment and Restricted Stock Agreements. Upon
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the effectiveness of the Executive's resignation pursuant to Section 1.1 above,
the Employment Agreement shall automatically terminate and be of no further
force and effect, and neither the Company nor the Executive shall have any
further obligations thereunder. Upon the payment by
the Company of the Forfeiture Payment (as defined below), the Restricted Stock
Agreement (as defined below) shall automatically terminate and be of no further
force and effect, and neither the Company nor the Executive shall have any
further obligations thereunder. The Executive acknowledges and agrees that,
notwithstanding anything contained in the Employment Agreement or the Restricted
Stock Agreement, the termination of the Employment Agreement and the Restricted
Stock Agreement pursuant to this Agreement does not give rise to any rights or
entitlements (to payment or otherwise) of the Executive thereunder.
1.3. Restricted Stock; Payment and Forfeiture. The Company and the
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Executive acknowledge that, pursuant to that certain Restricted Stock Agreement,
dated as of October 3, 1997, between the Company and the Executive (the
"Restricted Stock Agreement"), the Company has issued to the Executive 200,000
shares of restricted stock (the "Restricted Stock") under the Assisted Living
Concepts, Inc. Amended and Restated 1994 Stock Option Plan (the "Plan"). In
consideration of the Executive's agreement to forfeit his right and interest in
the Restricted Stock as set forth in the following sentence, the Company shall
pay the Executive a lump sum cash payment in the amount of $750,000 (less
amounts required to be withheld under applicable law) (the "Forfeiture
Payment"). Notwithstanding anything contained in the Restricted Stock Agreement
or the Plan, immediately upon payment by the Company of the Forfeiture Payment,
(i) the Executive shall automatically forfeit all of his right and interest in
the 200,000 shares of Restricted Stock issued pursuant to the Restricted Stock
Agreement and (ii) the Restricted Stock Agreement shall automatically terminate
and be of no further force and effect. The Forfeiture Payment shall be made
upon the effectiveness of the Executive's resignation pursuant to Section 1.1
hereof.
2. CONSULTING ARRANGEMENT
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2.1. Consulting Services. From and after the effectiveness of the
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Executive's resignation pursuant to Section 1.1 hereof, the Company hereby
engages the Executive to provide services as a consultant to the Company as
contemplated by this Agreement, and the Executive hereby agrees to provide such
consulting services and to comply with the other provisions of this Agreement,
upon the terms and subject to the conditions hereinafter set forth.
2.2. Nature of Consulting and Other Services. In his rendering of
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consulting services for the benefit of the Company hereunder, the Executive
shall from time to time provide the Company, its Board of Directors, and its
Chief Executive Officer with such advice as any of them may reasonably request
in connection with the business and operations of the Company and its
subsidiaries and affiliates. The Executive shall provide such advice only at
the request of the Company's Board of Directors or its Chief Executive Officer.
The Executive shall hold himself available at reasonable times and on reasonable
notice to render such consulting and advisory services as may be so assigned to
him by the Company, its Board of Directors, or its Chief Executive Officer
during the Consulting Term (as defined below); provided, however, that, unless
the parties otherwise agree, the consulting and advisory services rendered by
the Executive during the Consulting Term shall not exceed forty (40) hours each
calendar month. Without limiting the foregoing, the Executive shall, upon the
reasonable request of the persons
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specified above, (a) consult with the Company with respect to all matters
concerning the Company in which the Executive had personal involvement during
his period of employment and/or directorship with the Company, (b) assist the
Company in the negotiation and consummation of business matters and prospects
pending at the time of his resignation and thereafter, and (c) cooperate with
and assist the Company in undertaking and preparing for legal and other
proceedings relating to the affairs of the Company and its subsidiaries. In
connection with the consulting services rendered by him hereunder, the Executive
shall (i) undertake such travel on the Company's behalf (and at its expense) as
the Company may reasonably request, and (ii) negotiate as the Company's
representative when and as reasonably requested to do so by the Company's Board
of Directors or its Chief Executive Officer. The Company agrees to use its best
efforts during the Consulting Term to secure the benefit of the Executive's
services hereunder so as to minimize the interference with his other activities.
2.3. Nature of Consulting and Other Services. It is understood that
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the Executive is to act as a consultant and advisor to the Company, and is not
an employee or agent of, or co-venturer with, the Company in any respect. The
Executive shall have no right, authority, or power to act for or on the
Company's behalf. The relationship between the Company and the Executive
hereunder shall be that of independent contractor.
3. TERM
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3.1. Term. The Executive hereby agrees to provide the consulting
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services contemplated by this Agreement, and the Company hereby agrees to retain
the Executive to provide such services, for a term of two (2) years, commencing
as of the effectiveness of the Executive's resignation pursuant to Section 1.1
hereof and terminating on the second anniversary of such effectiveness, unless
sooner terminated as herein provided (such term, ending on the earlier of (i)
the expiration of such 2 year period, or (ii) the sooner termination of the
consulting relationship hereunder, is referred to herein as the "Consulting
Term.")
3.2. Termination for Cause. The Company may terminate the consulting
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relationship hereunder at any time for Cause. If the Company terminates the
consulting relationship hereunder for Cause, the Executive shall be entitled
only to the cash compensation provided pursuant to Section 4.1 hereof earned
through the date of termination. For the purposes of this Agreement, a
termination of the Executive's consulting relationship shall be deemed for
"Cause" if, and only if, seventy-five percent (75%) of the Company's Board of
Directors entitled to vote, at a meeting in which a quorum is present at the
time of the vote, vote for such termination and the termination is based upon
one or more of the following: (i) conviction of a felony; (ii) material
disloyalty to the Company such as embezzlement, misappropriation of corporate
assets, or breach of the obligations undertaken by the Executive under Section
5.1, 6.1 or 6.2 hereof; (iii) the engaging in immoral, unethical or illegal
behavior which is of public nature, brings the Company into disrepute, and
results in material damage to the Company; or (iv) a Material Breach (as defined
below) by the Executive of any of the terms of this Agreement (including,
without limitation, Sections 2.1, 5.1, 6.1 and 6.2 hereof). For purposes of
this Agreement, the Executive shall be deemed to have engaged in a "Material
Breach" of a term
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hereof if (a) he materially breaches such provision after (b) he has received
written notice from the Company specifying the breach and (c) he does not
promptly (and, in any event, within five business days) remedy such breach
following receipt of such notice; provided, however, that if such breach
involves Section 5.1, 6.1, or 6.2 hereof, the Company shall not be required to
provide such notice, and the Executive shall not be given the opportunity to
remedy such breach, if such breach has resulted in irreparable harm to the
Company, its shareholders or affiliates.
3.3. Termination Without Cause. The Company may terminate the
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consulting relationship hereunder at any time without Cause upon no less than 30
days written notice to the Executive. In the event that the Company terminates
the consulting relationship hereunder without Cause, then, in partial
consideration of the Executive's covenant not to compete under Section 6.1
hereof, the Executive shall be entitled to the balance of the cash amounts which
he would have received had the consulting relationship continued (on a basis of
not more than 40 hours per month) for the remainder of the two (2) year
Consulting Term. All such amounts shall be payable as set forth in Section 4.1
hereof.
3.4. Termination Upon Change in Control. Notwithstanding anything
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contained herein, the consulting relationship hereunder shall automatically
terminate upon the occurrence of a Change in Control (as defined below) of the
Company. In the event that the consulting relationship hereunder is terminated
pursuant to this Section 3.4 upon a Change in Control, the Executive shall be
entitled to a lump-sum cash payment in an amount equal to the aggregate balance
of the cash amounts which the Executive would have received had the consulting
relationship continued for the remainder of the two (2) year Consulting Term.
Such cash payment shall be made by the Company as soon as practicable (but in no
event more than 15 days) following the date of the termination of the consulting
relationship. In addition, in the event that the consulting relationship
hereunder is terminated pursuant to this Section 3.4 upon a Change in Control,
the Executive's covenant not to compete under Section 6.1 hereof shall
automatically terminate and be of no further force and effect.
For purposes of this Agreement, a "Change in Control" of the Company
shall be deemed to have occurred if: (i) any Person (as defined below) (other
than Executive) or that Person's Affiliate (as defined below) is or becomes the
Beneficial Owner (as defined below), directly or indirectly, of securities of
the Company representing 30% of more of the combined voting power of the
Company's then outstanding securities; or (ii) the stockholders of the Company
approve a merger or consolidation of the Company with any other corporation (or
other entity), other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 50% of the combined
voting power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation; provided, however,
that a merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person acquires more than 30% of
the combined voting power of the Company's then outstanding securities shall not
constitute a Change in Control; or (iii) the stockholders of the Company approve
a plan of complete liquidation or an agreement for the sale or disposition of
all
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or substantially all of the Company's assets; or (iv) a majority of the members
of the Board of Directors of the Company cease to be Continuing Directors (as
defined below).
For purposes of this Section 3.4, the following terms shall have the
following meanings: (a) "Person" is given the meaning as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"); provided, however, that unless this Agreement provides to the
contrary, the term shall not include the Company, any trustee or other fiduciary
holding securities under an employee benefit plan of the Company, or any
corporation owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company;
(b) "Affiliate" means any corporation affiliated with any Person whose actions
result in a Change in Control (or which, as a result of the completion of the
transactions causing a Change in Control shall become affiliated) within the
meaning of Section 1504 of the Internal Revenue Code of 1986, as amended; (c)
"Beneficial Owner" shall have the meaning given to such term in Rule 13d-3 under
Exchange Act; and (d) "Continuing Directors" means, as of any date of
determination, any member of the Board of Directors of the Company who (i) was a
member of such Board of Directors on the date of this Agreement or (ii) was
nominated for election or elected to such Board of Directors by at least a
majority of those persons who were Continuing Directors at the time of such
nomination or election.
4. COMPENSATION
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4.1. Cash Compensation. During the Consulting Term, the Company
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shall pay to the Executive compensation in the amount of $15,000 per month (less
amounts required to be withheld under applicable law). All such cash
compensation shall be payable in accordance with the Company's normal payroll
practices. The cash compensation payable for the consulting services to be
provided by the Executive hereunder shall, subject to the other terms and
provisions of this Agreement, continue for the full period of the Consulting
Term even if the Executive obtains income from any other source, including other
full-time employment, but shall terminate upon the Company's termination of the
consulting relationship for Cause. Except as set forth herein, the Executive
shall not be entitled to any other cash compensation from the Company following
the date of his resignation pursuant to Section 1.1 hereof.
4.2. Business Expenses. During the Consulting Term, the Executive
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shall be entitled to receive prompt reimbursement for all reasonable business
expenses incurred by the Executive in accordance with the policies and practices
of the Company as in effect from time to time with respect to employees of the
Company.
4.3. Termination Payment. Upon the effectiveness of the Executive's
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resignation pursuant to Section 1.1 hereof, the Company shall pay the Executive
a lump sum cash termination payment in the amount of $490,000 (less amounts
required to be withheld under applicable law) (less $100,000 paid last year).
4.4. Medical Benefits. During the Consulting Term, the Executive
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shall be
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entitled to participate in the Company's medical insurance plans and/or programs
at a level, and on such terms and conditions, as are made available by the
Company to its senior executives.
4.5. Director Compensation. For so long as the Executive remains a
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member of the Company's Board of Directors, the Executive shall continue to be
entitled to receive all compensation and fees as are payable by the Company to
its directors from time to time. Notwithstanding anything contained herein,
time spent by the Executive in the performance of his services as a member of
the Company's Board of Directors shall not be deemed to be the performance of
consulting services hereunder.
5. CONFIDENTIALITY
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5.1. Confidentiality. The Executive acknowledges that, during the
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course of his employment with the Company, the Executive has had, and during the
course of his engagement under this Agreement the Executive will have, access to
Confidential Information (as defined below) owned by the Company or used or
involved in or incidental to its operations, business and affairs. All such
Confidential Information has been and will be disclosed to the Executive in
confidence. The Executive covenants that from and after the date hereof, he
will keep confidential all Confidential Information of the Company and its
subsidiaries and affiliates which is known to him and, except with the specific
prior written consent of the Company or as required to be disclosed by law or
the order of any agency, court or other governmental authority, will not
disclose any Confidential Information to any person other than the Company, its
subsidiaries and affiliates, or their respective employees accountants, counsel
and other designated representatives as is appropriate in the course of his
consulting relationship. For purposes of this Agreement, "Confidential
Information" shall mean all know-how, trade secrets and other confidential
nonpublic information prepared for, by or on behalf of, or in the possession of,
the Company or any of its subsidiaries or affiliates, including without
limitation (i) nonpublic proprietary information; (ii) other information derived
from reports, investigations, research, studies, work in progress, codes,
marketing, sales or service programs, capital expenditure projects, cost
summaries, equipment, product or system designs or drawings, pricing or other
formulae, contract analyses, financial information, projections, agreements with
vendors, joint venture agreements, confidential filings with any agency, court
or other governmental authority; and (iii) all other concepts, methods,
techniques and processes of doing business, developing, building or constructing
facilities, ideas or information that can be used in the operation of a business
or other enterprise and is sufficiently valuable, or potentially valuable, and
secret to afford an actual or potential economic advantage over others;
provided, however, that Confidential Information shall not include any
information that is currently generally available to and generally known by the
public or, through no fault of the Executive, hereafter becomes generally
available to and generally known by the public.
5.2. Company Property. All records, files, drawings, documents and
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the like relating to the Company's business which the Executive shall prepare,
use or come into contact with, shall be and remain the Company's sole property
and shall not be removed from the Company's premises without its written consent
except as required in the course of the
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Executive's consulting engagement. Upon the termination of the Consulting Term,
all such records, files, drawings, documents and the like that are in the
Executive's custody or control shall immediately be delivered by the Executive
to the Company or its designee. The Executive acknowledges that his obligations
in this Section are of a unique character that gives them a special value to the
Company, the loss of which cannot reasonably or adequately be compensated in
damages in an action at law, that a breach thereof will result in irreparable
and continuing harm to the Company and that therefore, in addition to any other
remedy that the Company may have at law or in equity, the Company shall be
entitled to injunctive relief for a breach thereof by the Executive.
6. NONCOMPETITION AND NONSOLICITATION
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6.1. Noncompetition. Subject to Section 3.4 hereof, the Executive
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covenants that he will not, during the period commencing on the effectiveness of
the Executive's resignation pursuant to Section 1.1 hereof and terminating on
the second anniversary of such effectiveness (the "Restricted Period"), (a)
accept employment with or render service to any person, firm or corporation that
is engaged in the Assisted Living Business (as defined below) in any region in
which the Company is then operating or has firm plans to operate; or (b) own,
manage, operate, construct, develop, lease or control, or participate in the
ownership, management, operation, construction, development, lease or control
of, or be connected as a principal, agent, representative, consultant, advisor,
investor, owner, partner, financier, developer, contractor, manager or joint
venturer with, or permit his name to be used by or in connection or association
with, any facility, business or enterprise that is engaged in the Assisted
Living Business in any region in which the Company is then operating or has firm
plans to operate; provided, however, that the Executive may invest as an
investor in the voting securities of any person that is a reporting company
under the Exchange Act, so long as (1) the aggregate amount of the securities
the Executive owns directly or indirectly is less than five percent (5%) of the
total outstanding voting securities of that person and (2) the Executive has no
other affiliation with that person. For purposes of this Agreement, the term
"Assisted Living Business" shall mean any business or activity that, directly or
indirectly, provides (i) any of the following services, programs or facilities
to frail, elderly residents (whether by itself or through a joint effort with
another party or parties): long-term living, nursing home, retirement home, or
assisted living, (ii) assisted living, supportive care living or personal care
services, programs, or facilities, as described or defined by any state
licensing authority, and (iii) businesses or activities substantially similar to
any of those described in the foregoing items. Notwithstanding anything herein
to the contrary, the Executive shall not be prohibited from owning or
participating in the ownership or control of, or engaging in any capacity with,
any of the following: (a) any business or enterprise that derives no more than,
and is not anticipated to derive more than, forty-five (45%) of its gross
revenues, directly or indirectly, from the Assisted Living Business, (b) age
restricted apartment units where no services are provided to residents, (c)
skilled nursing facilities, (d) dedicated Alzheimer units and facilities, or (e)
any business or enterprise which owns the real estate of or provides financing
for, but which is not involved in the operation of, an Assisted Living Business
facility more than ten (10) miles from an Assisted Living Business facility
which is then being operated, developed and/or constructed by the Company.
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6.2. Nonsolicitation. The Executive covenants that he will not,
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during the Restricted Period, otherwise than on behalf of the Company or any
subsidiary or affiliate of the Company, solicit the employment of any person, or
induce or advise any person to leave the employ of the Company or any subsidiary
or affiliate of the Company, if such person is, as of the date of such
solicitation, inducement or advisement, employed on a full- or part-time basis
by the Company or any subsidiary or affiliate of the Company.
6.3. Modification. If the noncompetition and/or nonsolicitation
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covenants contained in the foregoing Sections 6.1 and 6.2 are, in the view of
any court or arbitrator asked to rule upon the issue, deemed unenforceable by
reason of covering too large an area, too long a period of time, too large a
number of entities or too many business activities, then the same shall be
deemed to cover only the largest area, the longest period, the largest number of
entities or the most business activities, as the case may be, that will not
render it unenforceable.
6.4. Specific Performance. The Executive acknowledges and agrees
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that the Company cannot be fully or adequately compensated in damages for a
violation of Section 6.1 or 6.2 hereof, and that, in addition to any other
relief to which the Company may be entitled, it shall be entitled to injunctive
and equitable relief.
7. DISPUTE RESOLUTION
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7.1. Mediation. If a dispute arises out of or relates to this
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Agreement or the breach of it (the "Dispute"), and if the Dispute cannot be
settled through negotiation, the parties agree first to attempt in good faith to
settle the Dispute by nonbinding mediation under the then effective rules of the
Arbitration Service of Portland, Inc. (the "Service") or, if the Service is no
longer doing business, then under the Mediation Rules of the American
Arbitration Association (the "AAA") before resorting to arbitration.
7.2. Arbitration. In the event the parties fail to resolve the
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Dispute through mediation, then either party or both of them shall have the
right to submit the Dispute to final and binding arbitration by the Service or,
if the Service is no longer doing business, then by the AAA. The parties agree
to arbitration as an alternative to court proceedings in order (i) to obtain a
prompt evidentiary hearing and an arbitrator's final award resolving any
dispute, (ii) to do so expeditiously, and (iii) to do so economically. During
the arbitration proceeding, the arbitrator, in the arbitrator's sole discretion,
shall have the right to grant requests for discovery of documents, the taking of
depositions, and the issuance of subpoenas in accordance with rules of the
Service or AAA, whichever is applicable. Each party hereby promises to
cooperate in the arbitration process to effectuate these purposes. The
arbitration shall be conducted in accordance with the rules of the Service or,
if the Service is no longer doing business, then in accordance with the rules of
the AAA which are in effect at the time of the arbitration. Judgment rendered
by the arbitrator may be entered in any court having competent jurisdiction in
accordance with Oregon law.
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7.3. Waiver of Jury Trial. By submitting a Dispute to mediation and
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arbitration, the parties hereto understand that they will not enjoy the benefits
of a jury trial. Accordingly, the parties hereto expressly waive the right to a
jury trial.
7.4. Nonexclusive Remedy. Notwithstanding the above provisions
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regarding mediation and arbitration, the parties each retain their respective
rights to seek injunctive relief or other provisional remedies provided under
the law in any court having competent jurisdiction.
8. ATTORNEYS' FEES
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8.1. Mediation Fees and Costs. In the event of mediation, the
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parties shall bear their own attorneys fees and costs, except that the cost of
mediation shall be shared equally.
8.2. Arbitration Fees and Costs. In the event of arbitration, the
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arbitrator shall award reasonable attorneys fees and costs of the mediation and
arbitration to the prevailing party, including the fees of the arbitrator,
unless such award of fees and costs would be manifestly unjust for reasons set
forth by the arbitrator in his written decision. In determining the amount of
reasonable attorneys fees to a party, the arbitrator may take into account (i)
each party's respective efforts to achieve an economical and expeditious
resolution of the dispute in accordance with this Section; and (ii) the final
settlement offers, if any, of the parties at least ten (10) calendar days prior
to the commencement of the hearing. In accordance with the rules of evidence,
however, settlement offers shall not be considered in relation to the merits of
any Dispute that is subject to this Section other than the award of attorneys
fees and costs.
8.3. Suits, Actions or Other Proceedings. Notwithstanding Section
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8.2 above, if a suit, action or other proceeding of any nature whatsoever
(including any contested matter or adversary proceeding under the U.S.
Bankruptcy Code) is instituted in connection with any controversy arising out of
this Agreement or to interpret or enforce any rights hereunder, the prevailing
party shall be entitled to recover its reasonable attorneys, paralegals,
accountants and other experts fees, and all other fees, costs and expenses
actually incurred in connection therewith, as determined by the judge at trial
or on appeal or review, in addition to all other amounts provided by law.
8.4. Certain Attorneys' Fees. The Company agrees to reimburse
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Executive in an amount not to exceed $10,000 for Executive's attorneys fees
incurred in the negotiations for, and preparation of, this Agreement.
9. MISCELLANEOUS
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9.1. Severability and Construction. In construing this Agreement, if
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any portion of this Agreement shall be found to be invalid or unenforceable, the
remaining terms and provisions of this Agreement shall be given effect to the
maximum extent permitted without considering the void, invalid or unenforceable
provision. In construing this Agreement, the singular shall include the plural,
the masculine shall include the feminine and neuter genders as
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appropriate, and no meaning or effect shall be given to the captions of the
sections in this Agreement, which are inserted for convenience of reference
only.
9.2. Successors. The Company shall require any successor (whether by
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purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company (herein, a "Successor") expressly to
assume and agree to perform all of the terms of this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession had occurred; provided, however, that if the obligations of
the Company hereunder are assumed by any Successor by operation of law, no such
express assumption and agreement shall be required. Other than through the
succession described in this paragraph, neither party may assign this Agreement
to anyone without the express prior written consent of the other party hereto.
This Agreement shall inure to the benefit of the Executive's heirs and to the
benefit of any Successor.
9.3. Final and Entire Agreement. This Agreement represents the final
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and entire agreement among the parties with respect to the subject matter hereof
and supersedes all prior agreements (including, without limitation, the
Employment Agreement and the Restricted Stock Agreement), negotiations and
discussions between the parties hereto and/or their respective counsel with
respect to the subject matter hereof; provided, however, that notwithstanding
the foregoing, this Agreement shall not supersede or otherwise affect (i) that
certain Indemnification Agreement (the "Indemnification Agreement"), dated as of
October 3, 1997, between the Company and the Executive, or (ii) any stock option
agreement between the Company and the Executive (each, a "Stock Option
Agreement"), and each of the Indemnification Agreement and the Stock Option
Agreements shall remain in full force and effect. Any amendment to this
Agreement must be in writing, signed by duly authorized representatives of the
parties, and stating the intent of the parties to amend this Agreement.
9.4. Consultation With Counsel. The Executive represents and
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acknowledges that he has discussed all aspects of this Agreement with his
attorney and that he has carefully read and fully understands all of its
provisions.
9.5. Expenses. Except as set forth in Section 8.4 hereof, each of
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the Company, on one hand, and the Executive, on the other, shall be liable for
their own respective costs and expenses incident to the execution of this
Agreement and the consummation of the transactions contemplated thereby.
9.6. Governing Law. The provisions of this Agreement shall be
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construed and interpreted in accordance with the internal laws of the State of
Oregon as at the time in effect.
9.7. Survival. Subject to Section 3.4 hereof, the provisions of
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Sections 5.1, 5.2, 6.1, 6.2, 6.3, 6.4, 7.1, 7.2, 7.3, 7.4, 8.1, 8.2, 8.3, 9.8
and of this 9.7 shall survive any termination of this Agreement in accordance
with their respective terms.
9.8. Cooperation in Legal Proceedings. Without limitation of Section
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2.2(c)
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hereof, the Executive agrees, after the expiration of the Consulting Term, upon
the request of the Company, to cooperate with and assist the Company in
undertaking and preparing for legal and other proceedings relating to the
affairs of the Company and its subsidiaries. The Executive shall be reimbursed
for the reasonable expenses he incurs in connection with any such cooperation
and/or assistance, and shall receive from the Company reasonable per diem
compensation in connection therewith.
9.9. Notices. All notices and other communications provided to any
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party under this Agreement shall be in writing and delivered by overnight
courier or other personal delivery to such party at its address set forth below
its signature hereto, or at such other address as may be designated by such
party in a notice to the other party. Any notice, if so delivered and properly
addressed with postage prepaid, shall be deemed given when received.
9.10. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be an original, but all of which taken
together shall constitute one instrument.
[SIGNATURE PAGE TO FOLLOW]
11
IN WITNESS WHEREOF, the parties hereto have each executed this
Agreement as of the date first above written.
"EXECUTIVE"
___________________________________________
William McBride III, as an individual
Home Address:
------------
1647 Logan Creek Drive
P.O. Box 206
Glenbrook, NV 89413
"COMPANY"
Assisted Living Concepts, Inc.
By: _______________________________________
Name: Keren Brown Wilson
Title: Chief Executive Officer
Address:
-------
11835 NE Glenn Widing Drive, Building E
Portland, OR 97220-9057
S-1