Exhibit 10.35
RESTRICTIVE COVENANT AGREEMENT
THIS RESTRICTIVE COVENANT AGREEMENT ("Agreement") is made
effective as of this 1st day of November, 1999, by and between Regent Assisted
Living, Inc., an Oregon corporation (the "Company"), and Dale J. Zulauf (the
"Officer").
A. The Company is principally engaged in the business of owning,
operating and developing assisted living communities (the "Business").
B. Pursuant to that certain resolution of the Company's Board of
Directors dated to be effective November 1, 1999, Officer has been granted an
option to purchase 78,000 shares of the Company's common stock (the "Option")
through the Regent Assisted Living, Inc. 1995 Stock Incentive Plan adopted
August 28, 1995 (the "Plan"), on the terms and subject to the conditions of the
Incentive Stock Option Agreement dated the date hereof (the "Option Agreement")
between the Company and the Officer.
C. As of this date, Officer has commenced employment with the
Company pursuant to the Employment Agreement dated this date (the "Employment
Agreement") between the Company and the Officer. As an employee of the Company
pursuant to the Employment Agreement, the Officer is expected to obtain
extensive knowledge of the operations and financial condition of the Business,
as well as strong contacts and relationships with the Company's suppliers,
customers and employees.
D. The Company is unwilling to enter into the Option Agreement or
the Employment Agreement unless the Officer agrees to be bound by the terms of
this Agreement.
E. To induce the Company to enter into the Option Agreement and
the Employment Agreement, the Officer desires to execute this Agreement and to
be bound by the terms hereof.
AGREEMENT
NOW, THEREFORE, in consideration of the covenants and mutual
agreements set forth herein and other good and valuable consideration, including
Purchaser's execution and delivery of the Option Agreement and the Employment
Agreement, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. Restrictive Covenants. Except for the benefit of the Company,
the Officer shall not, either directly or indirectly, on his own account, or as
an employee, consultant, agent, partner, joint venturer, owner, officer,
director or stockholder (except for holdings of less than two percent (2%) of
the stock of a publicly traded company which are held solely for investment
purposes, and which do not involve the performance of any active services by the
Officer for any other person, firm, partnership, corporation or other entity, or
in any other capacity), in any way:
(a) From the date of this Agreement until the later of two
years after the date of this Agreement or one year after the termination of
the Officer's employment by the Company for any reason pursuant to the
Employment Agreement, within a 10 mile radius of substantially all Regent
Assisted Living, Inc. communities then in operation, conduct, engage in,
aid or assist anyone in the
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conduct of a business which is competitive with the Business (provided, however,
this provision shall not apply if Officer's employment by the Company is
terminated by the Company without Cause (as defined in the Employment
Agreement)); or
(b) From the date of this Agreement until the later of two
years after the date of this Agreement or one year after the termination of
the Officer's employment by the Company for any reason pursuant to the
Employment Agreement, with respect to the type of products or services
offered for sale to the Company's residents and other customers, solicit,
divert, take away or accept orders or business from, or attempt to solicit,
divert, take away or accept orders from, any person, firm, partnership,
corporation or other entity, wherever located, for whom the Company
performed any services or to whom the Company sold any product within the
immediately preceding twelve (12) month period; or
(c) From the date of this Agreement until the later of two
years after the date of this Agreement or one year after the termination of
the Officer's employment by the Company for any reason pursuant to the
Employment Agreement, hire solicit for hire or attempt to solicit for hire
for employment, or engage, any person who is employee or agent of the
Company or was an employee or agent of the Company within the immediately
preceding twelve (12) month period; or
(d) Use for himself or for any other person, firm, corporation,
partnership, association or other entity, or divulge or disclose in any
manner to any person, firm, corporation, partnership, association or other
entity, the identity of the Company's residents or other customers, the
methods of operation, financial data, sources of supply, know-how, pricing
information, records, books, agreements, techniques, forms, procedures,
systems, financial information or other trade secrets or confidential or
proprietary information used in or relating to the Business (hereinafter
referred to as the "Confidential Information"). Notwithstanding anything to
the contrary contained in this Agreement, the restrictions on the Officer's
disclosure and use of the Confidential Information shall not apply to (i)
information or techniques which are or become generally known to the
public, other than through disclosure (whether deliberate or inadvertent)
by the Officer; or (ii) disclosure of Confidential Information in judicial
or administrative proceedings to the extent the Officer is legally
compelled to disclose such information, provided the Officer shall have
used the Officer's best efforts, and shall have afforded the Company the
opportunity, to obtain an appropriate protective order or other assurance
satisfactory to the Company of confidential treatment for the information
required to be so disclosed.
(e) Notwithstanding anything to the contrary in this Agreement,
Executive may hold an interest in any congregate care or assisted living
property approved by the Company's Board of Directors (which approval shall
not be unreasonably withheld), provided that Executive shall hold any such
interest for investment purposes only and shall not take an active role in
the management of any such properties and, further, that such properties do
not directly compete with the business of the Company.
The Company's rights and Officer's obligation under each of the paragraphs above
is in addition to and not in lieu of the respective rights and obligations of
the Company and Officer under any other paragraph above.
2. Remedies. The Officer hereby agrees that the periods of time,
geographical scope and other restrictions provided for in Section 1 above are
the minimum such terms necessary to protect the Company and its successors and
assigns in the use and enjoyment of the goodwill associated with the
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Business. The Officer further agrees that damages cannot adequately compensate
the Company in the event of the Officer's breach of any of the covenants
contained in Section 1 above. Accordingly, the Officer agrees that in the event
of a breach of any of such covenants, the Company shall be entitled to obtain
injunctive relief against the Officer, without bond but upon due notice, in
addition to such other relief as may be available at law or in equity. Obtaining
of any such injunction by the Company shall not be deemed an election of
remedies or a waiver of any right to obtain any other remedies the Company may
have at law or in equity. The existence of any claim or cause of action of the
Officer against the Company or the Company of whatever nature shall not
constitute a defense to the Company's enforcement of such restrictive covenants.
To the extent any of such restrictive covenants are deemed unenforceable by
virtue of their scope, in terms of geographical area or length of time or
otherwise, but may be made enforceable by limitations thereon, the Officer
agrees that such covenants shall be enforceable to the fullest extent
permissible under the laws and public policies of the jurisdiction in which
enforcement is sought. The parties hereby authorize any court of competent
jurisdiction to modify or reduce the scope of the restrictive covenants to the
extent necessary to make such restrictive covenants enforceable.
3. Indemnification. The Officer agrees to indemnify and hold the
Company and its affiliates harmless from and against any and all loss, cost,
damage, liability and expense including, without limitation, reasonable
attorneys' fees, court costs and reasonable litigation expenses) which the
Company or any such affiliate shall suffer, sustain or incur as a result of,
arising from or in connection with any failure or breach by the Officer
hereunder.
4. Miscellaneous.
(a) Written Agreement to Govern. This Agreement, the Option
Agreement, and the Employment Agreement set forth the entire understanding
of the parties with respect to the subject matter hereof, supersede all
prior discussions, negotiations, understandings or written agreements among
the parties hereto relating to the subject matter contained herein, and
merge all prior and contemporaneous discussions among the parties.
(b) Severability. The parties expressly agree that it is not
the intention of any party hereto to violate any public policy, statutory
or common law rules, regulations, treaties or decisions of any government
or agency thereof. Subject to Section 2 of this Agreement, if any provision
of this Agreement is judicially or administratively interpreted or
construed as being in violation of any such provision, such articles,
sections, sentences, words, clauses or combinations thereof shall be
inoperative, and the remainder of this Agreement shall remain binding upon
the parties hereto.
(c) Law to Govern. The validity, construction and
enforceability of this Agreement shall be governed in all respects by the
laws of the State of Oregon, without regard to its conflict of laws rules.
The Officer hereby consents and submits to the exclusive jurisdiction of
the courts of the State of Oregon and the U.S. District Court for the
District of Oregon with respect to any actions or causes of action arising
hereunder. The Officer further agrees that Portland, Oregon shall be the
exclusive venue of any actions or causes of action arising hereunder.
(d) Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, personal representatives,
successors and assigns.
(e) Waiver of Provisions. The terms, covenants,
representations, warranties and conditions of this Agreement may be waived
only by a written instrument executed by the party
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waiving compliance. The failure of any party at any time to require
performance of any provisions hereof shall, in no manner, affect the right
at a later date to enforce the same. No waiver by any party of any
condition, or breach of any provision, term or covenant contained in this
Agreement, whether by conduct or otherwise, in any one or more instances,
shall be deemed to be or construed as a further or continuing waiver of any
such condition or of the breach of any other provision, term or covenant of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
OFFICER
/s/ Dale J. Zulauf
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Dale J. Zulauf
REGENT ASSISTED LIVING, INC.
By:/s/ Walter C. Bowen
-------------------
Walter C. Bowen, President
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