SEPARATION AGREEMENT AND GENERAL RELEASE
This Separation Agreement and General Release (the "Agreement") is made
and entered into as of the Effective Date of this Agreement (as set forth in
Paragraph 15 hereof), by and between Stephen P. Griggs ("Griggs"), residing at
440 Minnehaha Road, Maitland, FL 32751 and Integrated Health Services, Inc.
("IHS"), located at 910 Ridgebrook Road, Sparks, MD 21152, on behalf of itself
and any and all past and present parents, affiliates and subsidiary corporations
(individually and collectively, the "Company").
WHEREAS, Griggs, employment with the Company will be terminated as of
the Effective Date (as defined in Paragraph 15 hereof);
WHEREAS, the Company and Griggs (the "Parties") wish to put any and all
disputes behind them;
NOW, THEREFORE, for and in consideration of the mutual promises and
covenants herein contained and for good and valuable consideration, the
sufficiency of which is hereby acknowledged, the Parties hereby agree as
follows:
1. TERMINATION OF PRIOR AGREEMENTS AND UNDERSTANDINGS. The Parties
agree that any prior agreements and understandings between them, whether oral or
written and of whatever nature, are hereby canceled, terminated and superseded
by this Agreement and shall be of no further force or effect.
2. SPECIAL PAYMENT. The Company shall pay or cause to be paid to Griggs
$3,000,000 (three million U.S. dollars), less applicable payroll withholdings
and deductions (the "Special Payment") as follows:
(a) $1,000,000 (one million U.S. dollars), within ten (10) business
days of the Effective Date; and
(b) $2,000,000 (two million U.S. dollars) in equal monthly
installments over a period of three (3) years, commencing on the first day of
the first month following the Effective Date.
The payments set forth in Paragraph 2(a) and (b) shall be made by wire
transfer, payable to the order of "Stephen P. Griggs" and shall be wired to
Griggs at his bank address listed in Paragraph 16 below. Upon the effective date
of a confirmed plan of reorganization for the Company, the balance of the funds
due pursuant to Section 2(b) hereof shall be placed with an agreed upon escrow
agent who shall be directed to make each monthly payment unless instructed by
Court order to cease or suspend such payment.
3. PURPOSE OF SPECIAL PAYMENT. The Company is providing and Griggs is
accepting the Special Payment in full and complete satisfaction of all of
Griggs' Claims (as defined in Paragraph 5. hereof), up to the Effective Date,
against the Company, affiliated persons or partnerships, their successors and
assigns, and any and all of their past and present directors, officers,
shareholders, consultants, agents, representatives, attorneys, employees,
employee benefit plans and plan fiduciaries (collectively, the "Releases"). In
consideration of the Special Payment, Griggs shall transfer to the Company all
of his right, title and interest in any equity security, or option relating to
any equity security, of the Company, Griggs shall cause to be sold within ten
(10) days of the Effective Date, equity securities held by his IRA, his spouse
or his children. This Agreement is intended to be and is a complete termination
of Griggs' interest in the Company. Griggs acknowledges that he may not have
been, in the absence of this Agreement, entitled to the consideration set forth
in this Agreement. Griggs further acknowledges (i) the sufficiency of the
consideration for this Agreement generally and specifically for the release of
any such Griggs's Claims, as defined in Paragraph 5 hereof, up to the Effective
Date of this Agreement, he may have ever had, may now have or may hereafter
assert against the Releasees including without limitation, claims arising under
the Age Discrimination in Employment Act of 1967, as amended by, inter alia, the
Older Workers Benefit Protection Act of 1990; and (ii) that no other monies or
other consideration, except as expressly set forth in this Agreement, are due
and owing to him or on his behalf, or to his attorneys, by the Company or any of
the other Releasees. Griggs and his attorneys, represent, warrant and agree that
neither Griggs nor his attorneys shall (a) make any claim, or (b) commence any
action or proceeding against the Company or any of the other Releasees. Among
other things, except for any claims that may arise under Sections 2 and 6 of
this Agreement, Griggs hereby agrees not to file a Proof of Claim or a Proof of
Equity Interest in the bankruptcy case of the Company; and to waive all
distributions to be made in such bankruptcy case.
4. NO ADMISSIONS. This Agreement does not constitute an admission by
the Company or any of the other Releasees of any violation of any contract or of
any statute, constitution or common law of any federal, state or local
government of the United States or of any other country or political subdivision
thereof, and Griggs, the Company and each of the other Releasees expressly deny
any such violation or liability.
5. GENERAL RELEASE BY GRIGGS.
(a) Except for indemnification which Griggs is entitled to under the
By-laws of the Company, and the Company's payment obligation under Paragraph 2
hereof, in consideration of this Agreement and the monies and other good and
valuable consideration provided to Griggs pursuant to this Agreement, Griggs
hereby irrevocably and unconditionally releases, waives and forever discharges
the Company and each of the other Releasees, from any and all actions, causes of
action, claims, demands, damages, rights, remedies and liabilities of whatsoever
kind or character, in law or equity, suspected or unsuspected, known or unknown,
past or present, that he has ever had, may now have, or may later assert against
the Releasees, whether or not arising out of or related to Griggs's employment
with or the performance of any services to or on behalf of the Company or the
termination of that employment and those services or any other cause from the
beginning of time to the Effective Date hereof, (hereinafter collectively
referred to as "Griggs's Claims"), including without limitation: (i) any claims
arising out of or related to any federal, state and/or local labor or civil
rights laws including, without limitation, the federal Civil Rights Acts of
1866, 1871, 1964 and 1991, the Pregnancy Discrimination Act of 1978, the Age
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Discrimination in Employment Act of 1967, as amended by, inter alia, the Older
Workers Benefit Protection Act of 1990, the National Labor Relations Act, the
Worker Adjustment and Retraining Notification Act, the Family and Medical Leave
Act of 1993, the Employee Retirement Income Security Act of 1974, the
Consolidated Omnibus Budget Reconciliation Act of 1985, the Americans with
Disabilities Act of 1990, the Fair Labor Standards Act of 1938, the Florida
Civil Rights Act of 1992, Florida Labor laws and Florida Wage and Hour Laws as
each may have been amended from time to time; and (ii) any and all of Griggs's
Claims arising out of or related to any contract, any and all other federal,
state or local constitutions, statutes, rules or regulations, or under any
common law right of any kind whatsoever, or under the laws of any country or
political subdivision, including, without limitation, any of Griggs's Claims for
any kind of tortious conduct (including, but not limited to, any claim of
defamation or distress), promissory or equitable estoppel, breach of the
Company's policies, rules, regulations, handbooks or manuals, breach of express
or implied contract or covenants of good faith, wrongful discharge or dismissal,
and/or failure to pay or provide in whole or part any relocation allowances or
expense reimbursements, compensation, bonus, incentive compensation, profit
sharing, deferred stock, stock bonus awards or stock bonus incentives, stock or
unit Options, purchase, sale, or ownership of the stock of the Company or any of
the other Releasees, overtime compensation, severance pay or benefits or
payments of any kind whatsoever, including disability and medical benefits, back
pay, front pay or any compensatory, special or consequential damages, punitive
or liquidated damages, attorneys' fees, costs, disbursements or expenses, or for
any other reason or thing.
(b) To the fullest extent permitted by law, Griggs represents, warrants
and agrees that he shall not lodge any formal or informal complaint in court,
with any federal, state or local agency or any other forum arising out of or
related to Griggs's Claims or Griggs's employment with or performance of
services to or on behalf of the Company or any of the other Releasees or the
termination of that employment or other services, or for any other reason.
Griggs hereby represents and warrants that he has brought no complaint, claim,
charge, action or proceeding against the Company or any of the other Releasees
in any jurisdiction or forum. Griggs further represents, warrants and agrees
that he has not in the past and will not in the future assign any of Griggs's
Claims to any person, corporation or other entity.
(c) Execution of this Agreement by Griggs operates as a complete bar
and defense against any and all of Griggs's Claims against the Company and/or
the other Releasees. If Griggs should hereafter make any of Griggs's Claims in
any charge, complaint, action, claim or proceeding against the Company or any of
the Releasees, the Agreement may be raised as and shall constitute a complete
bar to any such charge, complaint, action, claim or proceeding and the Company
and/or the Releasees shall be entitled to and shall recover from Griggs all
costs incurred, cinlcuding attorneys' fees, in defending against any such
charge, complaint, action, claim or proceeding.
(d) Griggs shall indemnify the Company to the extent of any claims made
against the Company or the other Releasees by Griggs spouse, children or Griggs'
IRA.
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6. RELEASE AND INDEMNIFICATION BY THE COMPANY
(a) In consideration of this Agreement, the Company hereby
irrevocably and unconditionally releases, waives and forever discharges Griggs
from any and all actions, causes of action, claims, demands, damages, rights,
remedies and liabilities of whatsoever kind or character, in law or equity, past
or present, that it has ever had, may now have, or may later assert against
Griggs arising out of or related to Griggs's employment with the Company or the
termination of that employment; provided, however, that the Company does not
intend to and is not releasing Griggs of any actions, causes of actions, claims,
demands, damages, rights, remedies and liabilities asserted or which may be
asserted against the Company or any of the other Releases by any federal, state
or local government, agency or authority ("Government Company"), arising out of
or related to Griggs' intentional and knowing acts or omissions, provided
further that Griggs is and will be released of all Government Claims solely to
the extent Griggs would otherwise be entitled to indemnification pursuant to
Section 145(a) of the Delaware General Corporation Law (as in existence as of
the Effective Date), or under the By-laws of IHS. The released claims are
hereinafter collectively referred to as "Company Claims."
(b) To the fullest extent permitted by law, the Company represents,
warrants and agrees not to lodge any formal or informal complaint in court, with
any federal, state or local agency or any other forum arising out of or related
to Company's Claims. The Company hereby represents and warrants that it has
brought no complaint, claim, charge, action or proceeding against Griggs in any
jurisdiction or forum.
(c) Execution of this Agreement by the Company operates as a
complete bar and defense against any and all of the Company's Claims against
Griggs. If the Company should hereafter make any of the Company's Claims in any
charge, complaint, action, claim or proceeding against Griggs, the Agreement may
be raised as and shall constitute a complete bar to any such charge, complaint,
action, claim, proceeding and Griggs shall be entitled to and shall recover from
the Company all costs incurred, including attorneys' fees, in defending against
any such charge, complaint, action, claim or proceeding.
(d) The Company recognizes that prior to its bankruptcy filing, the
By-laws of IHS provided for certain indemnification rights for Griggs arising
out of or relating to his employment with Rotech Medical Corporation ("Rotech")
and the Company agrees that notwithstanding this Agreement, Griggs remains
entitled to such indemnification rights. However, it is expressly agreed and
understood that nothing set forth in this Agreement, nor its execution, is
intended to eliminate, modify, expand, elevate or change the scope or bankruptcy
priority status of any indemnification rights Griggs may have against the
Company or the indemnification rights as set forth in the By-laws of IHS. Prior
to the Effective Date, the Company will deliver to Griggs a copy of its current
Directors and Officers insurance policy, and it agrees not to modify that policy
as it relates to Griggs.
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(e) Each of the foregoing subparagraphs (a), (b), (c) and (d) of
this Paragraph 6 is conditional upon the validity of the representations made by
Griggs as set forth in this Agreement.
7. AGREEMENT ENFORCEABLE. Nothing contained herein is intended to
prevent Griggs or the Company from enforcing this Agreement.
8. CONFIDENTIALITY.
(a) Griggs represents, warrants and agrees that he will not,
directly or indirectly, use or disclose, or permit or aid the use by or
disclosure to any person, firm, entity or corporation, of any privileged,
confidential or proprietary business information relating to the business
affairs, clients, customers, business partners, plans, proposals, finances or
financial condition of the Company or any of the other Releasees which such
information Griggs received as a consequence of his employment with the Company
("Confidential Information"), except (i) with the Company's express written
consent; (ii) in direct response to any subpoena initiated against or served
upon Griggs; or (iii) in response to a request for information from an agency of
the government of the United States or a sovereign government of any foreign
nation ("Government Agency") as part of an active investigation ("Government
Request"). In the event that disclosure is sought from Griggs under
subparagraphs (ii) or (iii) in response to any such subpoena or Governmental
Request, Griggs shall give the Company immediate written notice of such subpoena
or Governmental Request. Except as expressly authorized here, Griggs further
represents, warrants and agrees that he has not and will not, directly or
indirectly, use or disclose, or permit or aid the use or disclosure to any
person, firm, entity or corporation of any information arising out of or related
to the business affairs of the Company.
(b) Griggs is obligated to surrender and represents that he has or
will surrender to the Company on or before the Effective Date, all confidential,
proprietary and other property of the Company and the other Releasees in
whatever form retained (e.g., written, mechanical, electronic) including, but
not limited to, all documents, papers, contracts, drafts, data, records, plans,
proposals, software, lists, indices, notes, files, papers, computers, computer
tapes, computer files, e-mail and all other electronic communications records,
disks or materials and other information and property, in whatever form,
including any copies thereof, in the possession of or under the control of
Griggs including, but not limited to, any such items in the possession or under
the control of his attorneys. Griggs hereby certifies that he and his attorneys
have fully complied with this representation.
(c) On and after the date of this Agreement, except as required by
law or in connection with any authorized governmental investigation, for a
period of twenty-seven (27) months from the Effective Date, neither Griggs on
the one hand, the Company including its officers or directors, on the other
hand, shall make disparaging oral or written comments as against the other.
(d) The provisions of this Paragraph 8 are material and critical
terms of this Agreement.
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9. NON-COMPETITION.
(a) Griggs hereby represents, warrants and agrees that, subject only
to the express exceptions set forth in Paragraph 9(b), for a period of
twenty-seven (27) months, commencing on March 15, 2000 (the "Commencement
Date"). Griggs shall not, directly or indirectly in the continental United
States:
(i) raid or divert or interfere with the Company's business
relationships with its customers, vendors, advertisers, investors,
suppliers or other persons or entities with which the Company conducts
business; or
(ii) own, manage, operate, control or participate in the
ownership, management, operation or control of, or be connected as an
officer, employee, consultant, partner, director, or otherwise with, or
have financial interest in, or aid or assist anyone else in the conduct of
any entity or business that competes with the business of the Company.
The activities set forth in Paragraphs 9(1)(i) and (ii) are
hereinafter collectively referred to as the "Competitive Activities."
(b) Expressly excluded from Paragraph 9(a) are Competitive
Activities:
(i) At any time in the following counties in Texas: Counties
of Bexar, Comad, Guadalupe and all counties contiguous to these three
counties;
(ii) Commencing August 1, 2000 in Texas, New Mexico, Arkansas,
Louisiana, Oklahoma and Kansas; and
(iii) Commencing August 1, 2001 in all states west of the
Mississippi River.
(c) Paragraph 9(a) does not apply to any business which exclusively
manufactures products, equipment, or medication for the medical industry, except
that, notwithstanding the foregoing, Paragraph 9(a) will apply to any business
which is in the business of home health services, home medical equipment or
which otherwise competes with the Company.
(d) The provisions of this Paragraph 9 are material and critical
terms of this Agreement.
10. NON-SOLICITATION.
(a) Griggs hereby represents, warrants and agrees that, subject only
to the express exceptions set forth in Paragraph 10(b), for a period of three
(3) years, commencing on the Commencement Date, Griggs shall not, directly or
indirectly solicit or induce any employee, agent
6
or consultant of the Company to leave the employ of or to cease performing
services for the Company and to become employed or engaged or otherwise work for
or with another person, firm, enterprise corporation or other entity. Griggs
further represents, warrants and agrees not to hire, contract with or otherwise
employ or engage any employee, agent or consultant of the Company or cause any
employee, agent or consultant to be hired away from the Company. For purposes of
this Paragraph 10(a), "any employee, agent or consultant of the Company" shall
include any individual employed or performing services for by the company as of
February 2, 2000, or thereafter. Notwithstanding the foregoing, nothing herein
is intended to prohibit Griggs from hiring an employee, agent or consultant at
least one year after the termination of that employee's employment, agency or
consultancy with the Company.
(b) Nothing set forth herein shall prohibit Griggs from employing an
agent or consultant in the medical industry which already provides services to a
multitude of companies including the Company at the same time.
(c) The non-solicitation restrictions set forth in Paragraph 10(a)
shall not apply to employees, agents or consultants of the Company whose
annualized total compensation paid by the Company was less than $45,000
(forty-five thousand U.S. dollars) per year as of the time immediately preceding
any offer to such employees, agents or consultants by Griggs; provided, however,
that notwithstanding anything contained herein, Griggs may not, directly or
indirectly solicit or induce any employee, agent or consultant of the Company to
leave the employ of or cease performing services for the Company and to become
employed or engaged or otherwise work with another person, firm, enterprise,
corporation or other entity for the first three months after the Effective Date.
(d) The provisions of this Paragraph 10 are material and critical
terms of this Agreement.
11. REMEDIES FOR BREACH.
(a) In the event that either Party breaches, violates, fails or
refuses to comply with any of the provisions, terms or conditions or any of the
warranties or representations of this Agreement (the "Breach"), the Other Party
shall have sole discretion to bring an action to recover against the breaching
Party damages, including reasonable attorneys' fees, accruing to the Other Party
as a consequence of the Breach.
(b) Regardless of and in addition to any right to damages or
equitable relief the Company may have, in the event that Griggs breaches,
violates fails or refuses to comply with any of his warranties, representations,
or covenants in this Agreement, the Company shall be entitled to cease making
payments under this Agreement and to recover against Griggs the full amount of
all payments the Company had provided to or on behalf of Griggs under this
Agreement only if the Company first obtains a judgment or finding by any court
having jurisdiction that Griggs was in Breach and that the Company has been
damaged in that amount.
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(c) Griggs acknowledges and agrees (i) that the services he provided
to the Company were of a special, unique, unusual, extraordinary and
intellectual character giving them a peculiar value; (ii) that in the course of
performing his duties on behalf of the Company, Griggs was permitted access to
some or all of the Company's trade secrets and other confidential or proprietary
information; and (iii) that the foregoing acknowledgment and agreements by him
in this Paragraph 11(c) are an adequate and appropriate basis for his
representations, warranties and agreements in the above Paragraphs 8, 9 and 10
and for the remedies for breach to which he is agreeing in this Paragraph 11(c).
Accordingly, Griggs acknowledges and agrees that money damages would be both
incalculable and an insufficient remedy for any breach of Paragraphs 8, 9 and 10
of this agreement and that any such actual or threatened or continuing breach
will cause the Company irreparable harm. In the event of any actual, threatened
or continuing breach of Paragraphs 8, 9 and 10 specifically enforced against
Griggs by way of temporary, preliminary and/or permanent injunction by any court
having jurisdiction, without the posting of any bond or security by the Company.
Such right and remedy shall be in addition to, and not in lieu of, any other
rights and remedies available to the Company under law or in equity. Further,
Griggs agrees that should the Company commence an action for injunctive relief,
the Company shall have the right in the same proceeding and court to recover
against Griggs the money damages causes by such breach, including, but not
limited to, the reasonable attorneys' fees and costs of the Company.
(d) The General Release by Griggs and the Release by the Company and
all other terms and conditions of this Agreement shall remain in full force and
effect regardless of the remedies and/or damages available under this Paragraph
11.
(e) Upon violation of any of Paragraphs 12(a) through (c) and 13(a)
through (c) of this Agreement, the Company's obligation to make any prospective
payments to Griggs hereunder shall terminate and, in lieu thereof, the Company
shall make such prospective payments to Kaye, Scholer, Fierman, Hays & Handler,
LLP, as counsel for the Company, pursuant to an escrow agreement as set forth in
Exhibit B. Thereafter, such payments shall only be made to Griggs by the Company
upon order of the Bankruptcy Court (as defined in Paragraph 14(e) hereof).
12. REPRESENTATIONS BY GRIGGS
To the best of Griggs' personal knowledge, Griggs hereby represents
that:
(a) Rotech Medical Corporation ("Rotech") is in compliance with all
Governmental Requirements (as defined herein). Except for notices of
non-compliance as to which Rotech has taken corrective action acceptable to the
applicable governmental agency, Griggs has not, within the period of twelve (12)
months preceding the date of this Agreement, received any written notice from
any governmental agency that Rotech fails to comply in any material respect with
any applicable federal, state, local or other governmental laws or ordinances,
or any applicable order, rule or regulation of any federal, state, local or
other governmental agency having jurisdiction over Rotech and its operations
("Governmental Requirements").
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(b) Rotech is qualified for participation in the Medicare and
Medicaid programs. Griggs is aware of pending government investigations in
Montana; Mississippi, Iowa; New Mexico; and the Lincare Qui Tam Litigation (the
"Government Investigations"). With the exception of previous disclosures made in
connection with the Government Investigations, to the best of Griggs' personal
knowledge (i) he is not aware of any facts which would give rise to liability
under the Government Investigations; (ii) the Company has no liability with
respect to recoupment from the Medicare or Medicaid programs, or any other third
party reimbursement source. Griggs had no personal knowledge of the assertion of
any recoupment claim that arose out of any transactions completed prior to the
date hereof, and no Medicare or Medicaid investigation, survey, or audit is
pending or, to the personal knowledge of Griggs, threatened with respect to the
operation of Rotech, except to the extent that such investigation, survey, or
audit is routine and is not reasonably likely to have a material adverse effect
on Rotech. To Grigg's personal knowledge, no Rotech employees have committed any
offense which may serve as the basis for suspension, restriction, or exclusion
of Rotech from the Medicare and Medicaid programs and Rotech is in material
compliance with all Conditions and Standards of Participation in the Medicare or
Medicaid Programs.
(c) The Health Care Compliance Questionnaire heretofore delivered to
Griggs by the Company will, as of the Effective Date, have been fully and
accurately completed and will not contain any material misstatement of any fact
and will not omit any fact that would have to be stated in order not to render
any response to such questionnaire materially misleading.
(d) Neither Griggs, nor any director/trustee, officer, controlling
person or employee of Rotech, and no affiliate of Rotech, (a) has used any
corporate funds of Rotech to make any illegal or unlawful payment to any
officer, employee, representative, agent of any corporation, government, or to
any political party or official thereof, including, without limitation, any of
same that would violate the Foreign Corrupt Practices Act of 1977, as amended;
or (b) has made or received any illegal payment, bribe, kickback, political
contribution or other similar questionable payment for any referrals or
recommendations, or otherwise, in connection with the operation of Rotech.
(e) Griggs has not received any improper payments from the Company
or the other Releasees.
(f) Prior to the commencement of the litigation entitled Rotech v.
Loftis et al. Adv. No. 00473 pending in the Bankruptcy Court in Delaware
("Loftis Litigation"), Griggs did not participate in nor did he have knowledge
that Rotech employees may have stolen or were planning to steal assets, business
records or corporate opportunities of Rotech, all as more particularly alleged
in the Loftis Litigation.
(g) None of the representations and warranties made pursuant to this
Agreement contains any untrue statement of material fact or omits to state a
material fact necessary, in light of the circumstance under which it was made,
in order to make any such representation not misleading in any material respect.
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13. The Company believes, based on information made known to it as of the
date hereof and the representations made by Griggs herein:
(a) Griggs on behalf of the Company and Rotech acted in good faith and in
a manner he reasonably believed to be in or not to the best interests of the
Company and Rotech.
(b) Griggs on behalf of the Company and Rotech had no reasonable cause to
believe his conduct was unlawful.
(c) Griggs complied in all material respects with all Governmental
Requirements.
14. MISCELLANEOUS PROVISIONS.
(a) No oral understanding, statements, promises or inducements contrary to
the terms of this Agreement exist. This Agreement cannot be changed or
terminated orally.
(b) Failure to enforce my provision of this Agreement shall not prejudice
or constitute a waiver of the enforcement of that provision in any other
instance.
(c) Should any provision of this Agreement be held invalid, illegal or
unenforceable, it shall be deemed to be modified so that its purpose can
lawfully be effectuated and the balance of this Agreement shall remain in full
force and effect.
(d) This Agreement shall extend to, be binding upon, and inure to the
benefit of the Parties and their respective successors, heirs and assigns.
(e) This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware. Any dispute over any term in this Agreement,
or any action or proceeding between the Parties to enforce the terms hereof
shall be commenced only in the Bankruptcy Court administering the Company's
Bankruptcy Court administering the Company's bankruptcy case ("Bankruptcy
Court"), and the Parties hereby submit to the exclusive jurisdiction of the
Bankruptcy Court and further agree not to assert that any action brought in such
jurisdiction has been brought in an inconvenient forum. The Company's payment
obligations set forth in Paragraph 2(b) hereof shall be entitled to an
administrative expense priority.
(f) This Agreement may be executed in any number of counterparts each of
which when so executed shall be deemed to be an original and all of which when
taken together shall constitute one and the same agreement. A telecopy signature
on this Agreement shall have the same force and effect as an original signature.
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(g) As used in this Agreement, the connectives "and" and "or" shall be
construed either disjunctively or conjunctively as necessary to bring within the
meaning or scope of the provisions of this Agreement all meanings that might
otherwise be construed to be outside of the meaning or scope of such provision.
(h) In the event of ambiguity, this Agreement or any of its provisions
shall not be construed for or against either Party on the basis of which Party
drafted the particular language at issue.
15. EFFECTIVE DATE/REVOCATION. Griggs may revoke this Agreement in writing
at any time during a period of seven (7) calendar days after the execution of
this Agreement by both of the Parties (the "Revocation Period"). This Agreement
shall be effective and enforceable automatically on the first day after the
occurrence of the following two events: (a) the date of the actual receipt by
the Company's counsel, Kaye, Scholer, Fierman, Hays & Handler, LLP (to the
attention of Michael Crames, Esq.) of the Certificate of Non-Revocation of
Separation Agreement and General Release (the form of which is attached hereto
as Exhibit A) executed and dated by Griggs at least one day after expiration of
the Revocation Period and (b) the entry of an order of the Bankruptcy Court
approving this Agreement which order has not been appealed, vacated or stayed
and the time period for taking an appeal thereof has expired (the "Effective
Date").
16. NOTICES. Any notices or requests under this Agreement shall be in
writing, addressed as follows:
(a) If to Griggs:
Stephen P. Griggs
440 Minnehaha Road
Maitland, FL 32751
Telephone No. (407) 647-4711
Fax No. (407) 647-2972
Wire Transfer Instructions:
For the Account of Stephen P. Griggs
Suntrust Bank, Central Florida
Orlando, FL 32801
Account No. 0700-700722901
ABA Number 063102152
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With a copy to:
Brown, Rudnick, Freed & Gesmer
One Financial Center
Boston, MA 02111
Telephone No. (617) 856-8513
Fax No. (617) 856-8201
Attention: Peter J. Antoszyk, Esq.
(b) If to the Company:
Integrated Health Services, Inc.
910 Ridgebrook Road
Sparks, MD 21152
Telephone No. (410) 773-100
Fax No. (410) 773-1325
Attention: Marshall Elkins, Esq., General Counsel
With a copy to:
Kaye, Scholer, Fierman, Hays & Handler, LLP
425 Park Avenue
New York, NY 10022
Telephone No. (212) 836-8564
Fax No. (212) 836-6157
Attention: Arthur Steinberg, Esq.
17. COOPERATION. Through the Effective Date, Griggs shall continue to act
in accordance with the best interests of Rotech to the extent requested by
Robert Elkins. Griggs recognizes that after the execution of this Agreement and
the filing of the pleading for approval thereof, but prior to the Effective
Date, the Company may replace him as president; however he will remain employed
by the Company until the Effective Date, and the Company agrees to diligently
act in good faith to have the Agreement approved by the Bankruptcy Court.
IN SIGNING THIS SEPARATION AGREEMENT AND GENERAL RELEASE (THE "AGREEMENT"),
GRIGGS ACKNOWLEDGES THAT:
(A) HE HAS READ AND UNDERSTANDS THIS AGREEMENT AND HE IS HEREBY ADVISED IN
WRITING TO CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT;
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(B) HE HAS SIGNED THIS AGREEMENT VOLUNTARILY, AFTER BEING ADVISED BY HIS
ATTORNEYS, AND UNDERSTANDS THAT THIS AGREEMENT CONTAINS A FULL AND FINAL
RELEASE OF ALL OF GRIGGS' CLAIM;
(C) HE HAS BEEN OFFERED AT LEAST TWENTY-ONE (21) CALENDAR DAYS TO CONSIDER
THIS AGREEMENT; AND
(D) THIS AGREEMENT IS NOT MADE IN CONNECTION WITH AN EXIT INCENTIVE OR
OTHER EMPLOYEE TERMINATION PROGRAM OFFERED TO A GROUP OR CLASS OF EMPLOYEES.
- --------------------------- ------------------------- , 2000
Stephen P. Griggs Date of Execution by Griggs
INTEGRATED HEALTH, SERVICES INC.
By:------------------------- ------------------------- , 2000
C. Taylor Pickett Date of Execution by Company
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EXHIBIT A
CERTIFICATION OF NON-REVOCATION OF
SEPARATION AGREEMENT AND GENERAL RELEASE
I hereby certify and represent that seven (7) calendar days have passed
since the Parties signed the Separation Agreement and General Release (the
"Agreement") and that I have NOT exercised my right to revoke that Agreement
pursuant to the Older Workers Benefit Protection Act of 1990. I understand that
the Company and the other Releases, in providing me with benefits under the
Agreement, are relying on this Certificate, and that I can no longer revoke the
Agreement.
/s/ Stephen P. Griggs 7/12
------------------------- ------------------------- , 2000
Stephen P. Griggs Date of Execution by Griggs
IMPORTANT:
THIS CERTIFICATE SHOULD BE SIGNED, DATED AND RETURNED TO THE COMPANY'S
COUNSEL, KAYE, SCHOLER, FIERMAN, HAYS & HANDLER, LLP (TO THE ATTENTION OF
MICHAEL CRAMES, ESQ.), 425 PARK AVENUE, NEW YORK, NEW YORK 10022, NO EARLIER
THAT ON THE EIGHTH (8TH) CALENDAR DAY AFTER THE AGREEMENT IS EXECUTED BY BOTH
PARTIES.
EXHIBIT B
ESCROW AGREEMENT
This ESCROW AGREEMENT (the "Escrow Agreement") is dated July __, 2000
among Integrated Health Services, Inc. ("IHS"), Stephen P. Griggs ("Griggs"),
and Kaye, Scholer, Fierman, Hays & Handler, LLP, as escrow agent ("Escrow
Agent").
IHS and Griggs have entered into a Separation Agreement and General
Release, as amended, dated as of ____________, 2000 (the "Separation
Agreement"). Upon an alleged breach of any of Paragraphs 12(a) through (c)
and/or 13(a) through (c) of the Separation Agreement, IHS's obligation to make
any prospective payments to Griggs pursuant to the Separation Agreement shall
terminate and, in lieu thereof, IHS shall make such prospective payments (the
"Deposit") to the Escrow Agent. This Escrow Agreement shall control how the
Deposit is to be maintained by the Escrow Agent and is to be disbursed to
either IHS or Griggs.
It is agreed as follows:
1. ESCROW DEPOSIT. The Deposit shall be held in escrow by the Escrow Agent
pursuant to and in accordance with this Escrow Agreement. The Escrow Agent
shall invest the Deposit in (i) interest or non-interest bearing accounts in or
certificates of deposit of any of the following banks: Fleet National Bank,
Bankers Trust Company, The Chase Manhattan Bank, Citibank, N.A., or Morgan
Guaranty Trust Company of New York, or (ii) obligations of the United States of
America maturing within ten days of the date of investment. Escrow Agent may
invest the Deposit in one or more of the investments permitted by the preceding
sentence, and may change those investments from time to time, all as it may
determine in its sole and absolute discretion. Escrow Agent shall have no duty
to maximize the return on the Deposit and shall be fully protected in making
any investment or combination of investments permitted by this Section.
2. DISBURSEMENT AFTER ORDER OF THE COURT. Upon receipt by Escrow Agent of
an order (the "Order") of the Bankruptcy Court stating how the Deposit is to be
disbursed, Escrow Agent shall release the sum specified in the Order in
accordance with the Order. The "Bankruptcy Court" means the bankruptcy court
administering IHS's bankruptcy case.
3. ESCROW AGENT AS COUNSEL TO IHS. Griggs acknowledges that he is aware
that Escrow Agent is acting as counsel to IHS and its affiliates in connection
with the Separation Agreement, the bankruptcy case of IHS, this Escrow
Agreement and other matters, and agrees that Escrow Agent's acting under this
Escrow Agreement shall not affect its ability to act as counsel to IHS and its
affiliates in any manner, including, but not limited to, any claim, action or
proceeding with respect to this Escrow Agreement or the disposition of or
entitlement to the Deposit.
4. ESCROW AGENT.
4.1 GENERAL. Escrow Agent shall act as escrow agent and hold and disburse
the Deposit pursuant to the terms and conditions of this Escrow Agreement. Its
duties under this Escrow Agreement shall cease upon disbursement of the
Deposit.
4.2 LIMITED DUTIES. Escrow Agent undertakes to perform only such duties as
are expressly set forth in this Escrow Agreement. Escrow Agent shall incur no
liability whatsoever to IHS or Griggs, except for its own willful misconduct in
its capacity as escrow agent.
4.3 LIMITED RESPONSIBILITIES. Escrow Agent's sole responsibility upon
receipt of the Order is to follow the provisions thereto relating to the
disbursement of the Deposit.
4.4 RESIGNATION. Escrow Agent may resign and be discharged from its duties
or obligations hereunder by giving notice of such resignation to IHS and Griggs
specifying a date upon which such resignation shall take effect, whereupon a
successor escrow agent shall be appointed by IHS and Griggs or, if no agreement
is reached by IHS and Griggs within ten (10) days of Escrow Agent's
resignation, by the Bankruptcy Court. Escrow Agent shall be entitled to release
the Deposit to any successor escrow agent so appointed.
4.5 INDEMNIFICATION. IHS and Griggs hereby jointly and severally agree to
indemnify Escrow Agent for, and to hold it harmless against, any loss,
liability, damage or expense incurred without bad faith on the part of Escrow
Agent arising out of or in connection with its entering into and/or performing
under this Escrow Agreement, including the cost and expense (including, but not
limited to, attorneys' fees, which may consist in whole or in part of the time
charges at their standard rates of partners of and attorneys employed by Escrow
Agent) of investigating or defending itself against any claim or liability.
5. ESCROW AGENT NOT AFFECTED BY OTHER AGREEMENTS. This Escrow Agreement
expressly sets forth all the duties of Escrow Agent with respect to any and all
matters pertinent hereto. No implied duties or obligations shall be read into
this Escrow Agreement against Escrow Agent. Escrow Agent, in its capacity as
such, shall not be bound by the provisions of any agreement among the parties
except this Escrow Agreement and shall have no duty to inquire into, or to take
into account its knowledge of, the terms and conditions of any agreement made
or entered into in connection with this Escrow Agreement.
6. NOTICES. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
(i) on the date of service if served personally on the party to whom notice is
to be given, (ii) on the day of transmission if sent by facscimile transmission
to the facsimile number given below, and telephonic confirmation of receipt is
obtained promptly after completion of transmission, (iii) on the day after
delivery to Federal Express or similar overnight courier or the Express Mail
service maintained by the United States Postal Service, or (iv) upon receipt,
if mailed to the party to whom notice is to be given, by first class mail,
registered or certified, postage prepaid and properly addressed, to the party
as follows:
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If to IHS: Integrated Health Services, Inc.
910 Ridgebrook Road
Sparks, MD 21152
Attn: Marshall Elkins, Esq.
Telephone: (410) 773-1000
Facsimile: (410) 773-1325
Copy to: Kaye, Scholer, Fierman, Hays & Handler, LLP
425 Park Avenue
New York, NY 10022
Attention: Arthur Steinberg, Esq.
Telephone: (212) 836-8201
Facsimile: (212) 836,8211
If to Griggs: Stephen P. Griggs
440 Minnehaha Road
Maitland, FL 32751
Telephone: (407) 647-4711
Facsimile:(407) 647-2972
Copy to: Brown, Rudnick, Freed & Gesmer
One Financial Center
Boston, MA 02111
Telephone: (617) 856-8513
Facsimile: (617) 856-8201
Attention: Peter J. Antoszyk Esq.
If to Escrow Agent: Kaye, Scholer, Fierman, Hays & Handler, LLP
425 Park Avenue
New York, NY 10022
Attention: Arthur Steinberg, Esq.
Telephone: (212) 836-8201
Facsimile: (212) 836-8211
Any party may change its address for the purpose of this Section 6 by giving
the other party notice of its new address in the manner set forth above.
7. MISCELLANEOUS.
7.1 JURISDICTION. Any action or proceeding seeking to enforce any
provision of, or based on any right arising out of, this Escrow Agreement shall
be brought against any of the parties only
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in the Bankruptcy Court and the parties hereby consent to the exclusive
jurisdiction of the Bankruptcy Court and further agree not to assert that any
action brought in such jurisdiction has been brought in an inconvenient form.
7.2 CAPTIONS. The captions in this Escrow Agreement are for convenience of
reference only and shall not be given any effect in the interpretaion of this
Escrow Agreement.
7.3 NO WAIVER. The failure of a party of insist upon strict adherence to
any term of this Escrow Agreement on any occasion shall not be considered a
waiver or deprive that party of the right thereafter to insist upon struct
adherence to that term or any other term of this Escrow Agreement. Any waiver
must be in writing.
7.4 EXCLUSIVE AGREEMENT; AMENDMENT; ASSIGNMENT. This Escrow Agreement
supersedes all prior agreements among the parties with respect to its subject
matter, is intended as a complete and exclusive statement of the terms of the
agreement among the parties with respect thereto and cannot be changed or
terminated orally. No party may assign any rights or delegate any of its duties
under this Escrow Agreement without the prior written consent of the other
parties hereto, and this Escrow Agreement shall be binding upon and inure to
the benefit of the successors and assigns of the parties hereto and to any
successor escrow agent appointed in accordance with Section 4.4.
7.5 COUNTERPARTS. This Escrow Agreement may be executed in counterparts,
each which shall be considered an original, but all of which together shall
constitute the same instrument. Telecopy signatures shall be treated as
original for purposes hereof.
7.6 GOVERNING LAW. This Escrow Agreement and all amendments hereof and
waivers and consents hereunder shall be governed by, and all disputes arising
hereunder shall be resolved in accordance with the laws of the State of New
York, without regard to the conflicts of law principles thereof.
* * * * *
INTEGRATED HEALTH SERVICES, INC.
By:
---------------------------------------
Title:
-------------------------------------
STEPHEN P. GRIGGS
------------------------------------------
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ESCROW AGENT:
KAYE, SCHOLER, FIERMAN,
HAYS & HANDLER, LLP, as Escrow Agent
By:
---------------------------------------
Title:
-------------------------------------
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