SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 2, 1998
METROPOLITAN HEALTH NETWORKS, INC.
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(Exact name of registrant as specified in its charter)
Florida 0-28456 65-0635748
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(State or other jurisdiction (Commission File (IRS Employer
or incorporation) Number) Identification No.)
5100 Town Center Circle, Boca Raton, Florida 33486
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(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code (561) 416-9484
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(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
On April 2, 1997, Metropolitan Health Networks, Inc. (the "Registrant"
or the "Company"), Metcare, VII, Inc. ("Metcare"), a wholly-owned subsidiary of
the Company (Subsidiary) Inc. and Primedica Healthcare, Inc. (Primedica) entered
into an asset purchase agreement pursuant to which Metcare purchased
substantially all of the assets and operations related to two physician
practices (the Practices) located in North Miami Beach, Florida owned by
Primedica. The aggregate purchased price was Three Million Five Hundred Thousand
Dollars ($3,500,000). The purchase price was allocated as follows:
i) Accounts Receivable $ 135,000
ii) Furniture and Fixtures 465,000
iii) Goodwill 2,900,000
Payment of the purchase price was made by delivery to Primedica of
an unsecured promissory note of Three Million Five Hundred Thousand Dollars
($3,500,000). The note, together with interest computed at the rate of Seven and
one half percent (7.5%) per annum, requires fifty-nine (59) monthly principal
and interest payments of Twenty-eight thousand one hundred ninety-six dollars
($28,196) and a final payment due on April 2, 2003 of Three million sixty-nine
thousand seven hundred forty-eight dollars ($3,069,748).
The purchase provides both capitated and non-capitated medical services
to approximately 2,600 members of various managed care organizations. The
capitated services comprise approximately ninety percent (90%) of its revenues
and one managed care organization accounts for approximately eighty-five percent
(85%) of total revenues. The unaudited revenues for the Practices for the twelve
months ended December 31, 1997 equaled approximately $5,700,000 resulting in a
gross margin of approximately $230,000.
An additional agreement was signed, the Repurchase Election Agreement,
whereby Primedica may be required to repurchase the Practices at the end of five
years in exchange for extinguishing Metcare's and Registrant's further
obligations under the Note, provided certain conditions are met, among the most
significant of which is the requirement that the Company be in compliance with
the terms of the Promissory Note. Additonally, Primedica may elect not to be
liable to repurchase the Practices if the net revenue derived from the purchased
assets exceeds Six million dollars ($6,000,000).
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(a) and (b) Financial Statements and Pro Forma Financial Information.
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Not applicable
(c) Exhibits.
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10.1 Asset Purchase Agreement dated April 2, 1997 by
and among the Company, Metcare VIl, Inc. and Primedica
Healthcare, Inc.
10.2 Promissory Note
10.3 Repurchase Election Agreement date April 2, 1998
by amoung the Company, Metcare Vll and Primedica
Healthcare, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
METROPOLITAN HEALTH NETWORKS, INC.
By:/s/ Donald B. Cohen
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Donald B. Cohen
Executive Vice President and
Chief Financial Officer
Dated: April 17, 1998
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement"), dated as of April 2,
1998 (the "Execution Date"), is by and among PRIMEDICA HEALTHCARE, INC., a
Florida corporation ("Primedica"), and METCARE VII, INC. ("Metcare"), a Florida
corporation, and METROPOLITAN HEALTH NETWORKS, INC., a Florida corporation, and
the owner of all of the issued and outstanding shares of Metcare ("Parent").
PRELIMINARY STATEMENTS
1. Primedica is desirous of conveying a substantial portion of its
business assets related to the physician practices located at 18300 N. E. 19th
Avenue, North Miami Beach, Florida and 1856 N.E. 163rd Street, North Miami
Beach, Florida to Metcare in exchange for Primedica's receipt from Metcare of
the Purchase Price (as defined below).
2. Without the covenants and agreements of Primedica contained in this
Agreement, Metcare would not enter into this Agreement or consummate the
contemplated transaction.
AGREEMENT
In consideration of the respective representations,
warranties, agreements and covenants in this Agreement and subject to the
conditions contained in this Agreement, the parties, intending to be legally
bound, agree as follows:
ARTICLE I
Transfer and Assignment of Assets
Section I.1 Transfer and Assignment of Assets.
(a) Upon the terms and subject to the conditions of this
Agreement, and effective as of the Closing Date, Primedica transfers to Metcare
and Metcare acquires from Primedica, all of Primedica's right, title and
interest in and to the assets listed on Schedule 1.1 to this Agreement (the
"Assets"):
(b) In order to effectuate the assignment, transfer and
conveyance contemplated by Section 1.1(a), simultaneously with the execution of
this Agreement, and effective as of the Closing Date, Primedica is executing and
delivering all instruments of assignment, transfer or conveyance (collectively,
the "Conveyance Instruments") as Metcare reasonably deems necessary or
appropriate to vest in or confirm to Metcare good, valid and marketable title to
all of the Assets, free and clear of all liens, encumbrances, defects and claims
of any kind ("Liens"). Notwithstanding anything contained in this Agreement, to
the extent that any of the Assets would otherwise include any license, contract,
agreement or other item (a "Restricted Asset") which requires the consent,
approval or waiver of another party to the transfer of any Restricted Asset
under this Agreement and all of these consents, approvals or waivers have not
been obtained prior to the Closing with respect to that Restricted Asset, then:
(i) only the claims, rights, benefits and obligations arising under that
Restricted Asset and otherwise to be assigned and assumed under this Agreement
shall be assigned and assumed as of the Closing Date; (ii) upon Metcare's
request, Primedica shall cooperate with Metcare in Metcare's efforts to obtain
those consents, approvals and waivers; and, (iii) upon the receipt of all
necessary consents, approvals and waivers with respect to the Restricted Asset,
that Restricted Asset shall automatically be deemed assigned and assumed to the
extent it would have
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been assigned and assumed as of the Closing Date but for the lack of those
consents, approvals and waivers.
Section I.2 Excluded Assets. All assets of Primedica, which are not
included in Schedule 1.1 are not being conveyed to Metcare (the "Excluded
Assets") including, but not limited to: (a) Primedica's original books, records
and other data relating to the Assets, business, employees and operations of
Primedica; (b) Primedica's pension funds, Employee Programs (as defined below)
and other plans and arrangements regarding employee benefits; (c) Primedica's
cash in bank; and (d) Primedica's rights to payment for services rendered on or
before the Closing Date.
ARTICLE II
Purchase Price; Assumed Obligations; Allocation of Purchase Price; Put Option
Section II.1 Purchase Price. The aggregate purchase price (the
"Purchase Price") for the Assets shall be: (i) Three Million Five Hundred
Thousand Dollars ($3,500,000.00); and, (ii) Metcare's and Parent's assumption of
certain of Primedica's obligations as described in Section 2.2. Subject to the
terms and conditions of this Agreement, and in reliance on the representations,
warranties and covenants of Primedica contained in this Agreement and made at
the Closing, Metcare shall deliver to Primedica, at the Closing, the Purchase
Price by execution and delivery to Primedica of a promissory note substantially
in the form of Exhibit A (the "Note").
Section II.2 Assumed Obligations. Effective as of the Closing Date,
Metcare and Parent assume and collectively agree to pay, discharge and perform,
when lawfully due, those liabilities and obligations of Primedica to the extent
expressly set forth on Schedule 2.2 to this Agreement (all of which are
collectively referred to as the "Assumed Obligations").
Section II.3 Allocation of the Purchase Price. The parties mutually
agree that the allocation of the Purchase Price is as follows: (a) $135,000.00
for accounts receivable; (b) $465,000.00 for furniture and equipment; and
$2,900,000.00 for goodwill.
Section 2.4 Put Option. Simultaneously with the execution and delivery
of this Agreement, Metcare, Parent and Primedica shall enter into a Repurchase
Election Agreement in substantially the form of Exhibit B to this Agreement.
ARTICLE III
Closing
Section III.1 Time and Place of the Closing. The closing (the
"Closing") of the transactions contemplated by this Agreement is being held at
the offices of Primedica, simultaneously with the execution of this Agreement,
and shall be deemed effective as of 12:01 a.m., Miami time, on the date of this
Agreement (the "Closing Date").
Section III.2 Procedure at the Closing. At the Closing, the parties are
taking the following steps in the order listed below (provided, however, that
upon their completion all of these steps shall be deemed to have occurred
simultaneously):
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(a) Primedica shall duly execute and deliver the Conveyance
Instruments to Metcare;
(b) Primedica shall execute and deliver resolutions adopted by
the board of directors and shareholders of Primedica approving the transactions
contemplated by this Agreement, certified by the corporate secretary of
Primedica;
(c) Metcare shall deliver resolutions adopted by the board of
directors of Metcare approving the transactions contemplated by this Agreement,
certified by the corporate secretary of Metcare;
(d) Parent shall deliver resolutions adopted by the board of
directors of Parent approving the transactions contemplated by this Agreement,
certified by the corporate secretary of Parent;
(e) Metcare and Parent shall deliver the Note to Primedica;
(f) Primedica shall execute and deliver to Metcare an
Assignment and Assumption of Lease Agreement for each of the Personal Property
Leases in substantially the form of Exhibit C attached to this Agreement, duly
executed by Primedica, and a Lessor's consent to the assignment, duly executed
by each Lessor;
(g) Metcare shall deliver to Primedica a Certificate of Good
Standing issued by the Secretary of State of Florida, dated not more than thirty
(30) days prior to the Closing Date;
(h) Parent shall deliver to Primedica a Certificate of Good
Standing issued by the Secretary of State of Florida, dated not more than thirty
(30) days prior to the Closing Date;
(i) Primedica shall deliver to Metcare a Certificate of Good
Standing issued by the Secretary of State of Florida dated not more than thirty
(30) days prior to the Closing Date;
(j) Primedica, as the tenant or subtenant under the Real
Property Leases, shall execute and deliver to Metcare or its nominee assignments
of the Real Property Leases, in the form of Exhibit D attached to this
Agreement;
(k) Primedica shall have executed and delivered to Metcare the
following instrument, in the form of Exhibit E attached to this Agreement, duly
executed by the landlord or sublessor under the Real Property Leases: an
instrument evidencing each landlord's and sublessor's consent to the assignment
to Metcare or its nominee of the Real Property Leases; and
(l) Primedica shall have executed and delivered to Metcare the
assignment of the employment agreements of the following physicians: Alvin
Gutierrez, M.D., Gonzalo Iravedra, M.D., Marc Shapiro, D.O. and Bertram Shapiro,
D.O. (collectively, the "Doctors").
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ARTICLE IV
Representations and Warranties of Primedica
In order to induce Metcare to enter into this Agreement and to
consummate the transactions contemplated under this Agreement, Primedica makes
the following representations and warranties to Metcare:
Section IV.1 Organization, Power and Authority of Primedica. Primedica
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Florida and has the requisite corporate power and authority
to own or lease its properties and to carry on its business as it is now being
conducted.
Section IV.2 Due Authorization; Binding Obligation. Primedica has the
requisite corporate power and authority to enter into this Agreement and all
documents described within this Agreement to be executed in connection with this
Agreement (collectively, the "Related Documents") to which it is or is to be a
party, and to consummate the contemplated transactions. This Agreement and the
Related Documents to which Primedica is a party have been duly and validly
executed and delivered by Primedica and are the legal, valid and binding
obligations of Primedica, enforceable in accordance with their respective terms.
The board of directors and shareholders of Primedica have duly authorized the
execution of this Agreement and the consummation of the transactions
contemplated by this Agreement as required under applicable law. Neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated by this Agreement will: (i) conflict with or violate
any provision of Primedica's Articles of Incorporation or By-laws, or any law,
ordinance or regulation or any decree or order of any court or administrative or
other governmental body which is either applicable to, binding upon or
enforceable against Primedica; or (ii) result in the creation of any Lien,
charge or encumbrance upon any of its assets. Attached to this Agreement and
marked as Exhibit F is a true, correct and complete copy of the Articles of
Incorporation, as amended, and attached to this Agreement and marked as Exhibit
G is a true, correct and complete copy of the By-laws, as amended, of Primedica.
Section IV.3 Ownership of Primedica. Sheridan Healthcorp, Inc. is the
sole record and beneficial owner of all outstanding shares of Primedica's stock.
Section IV.4 The Real Property Lease(s) attached to the Disclosure
Document as Exhibit H are true and complete copies of the Real Property
Lease(s), including all amendments and modifications, which Primedica is a party
to.
Section IV.5 Personal Property Leased and Purchase Options. The
Personal Property Leases attached to this Agreement as Exhibits I-1 through I-
are (i) true and complete copies of all the Personal Property Leases.
Section IV.6 Title to Assets. Primedica has good and marketable title
to all of the Assets, subject to Liens for current taxes and assessments not yet
due and payable. All of the Assets shall be conveyed to Metcare free and clear
of restrictions on or conditions to transfer or assignment, and free and clear
of any mortgage, Lien, charge, encumbrance, security interest or other
restrictions. Primedica is the tenant or subtenant under the Real Property
Lease(s).
Section IV.7 Condition of Assets. Primedica makes no representation or
warranty regarding the condition of the Assets, and Metcare is acquiring on an
As-Is basis.
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ARTICLE V
Representations and Warranties of Metcare
In order to induce Primedica to enter into this Agreement and to
consummate the transactions contemplated under this Agreement, Metcare and
Parent make the following representations and warranties to Primedica:
Section V.1 Organization, Power and Authority. Metcare is a corporation
duly organized and validly existing under the laws of the State of Florida, with
full corporate power and authority to enter into this Agreement and perform its
obligations under this Agreement. Parent is a corporation duly organized and
validly existing under the laws of the State of Florida, with full corporate
power and authority to enter into this Agreement and perform its obligations
under this Agreement.
Section V.2 Due Authorization; Binding Obligation. The execution,
delivery and performance of this Agreement, the Related Documents and all other
agreements contemplated by this Agreement and the consummation of the
contemplated transactions have been duly authorized by all necessary corporate
action of Metcare and Parent. This Agreement has been duly executed and
delivered by Metcare and Parent and is a valid and binding obligation of Metcare
and Parent, enforceable in accordance with its terms. Except for any corporate
action required by Metcare or Parent and conditions precedent provided for in
this Agreement which must be satisfied or waived, no other action on the part of
any individual or other person or entity is necessary to authorize this
Agreement or for the consummation of the transactions contemplated by this
Agreement and the Related Documents. Metcare and Parent has duly executed this
Agreement and authorized the execution of this Agreement and the consummation of
the transactions contemplated by this Agreement as required under the Florida
Business Corporation Act.
Section V.3 Consents and Approvals. No approval, consent or
authorization of or filing or registration with any governmental or other
regulatory authority or other third party is required by Metcare or Parent for
the execution, delivery or performance of this Agreement or for the consummation
of the transactions contemplated by this Agreement, except for those which shall
have been obtained prior to the Closing.
ARTICLE VI
Covenants of Primedica
Section VI.1 Further Assurances. From time to time after the date of
this Agreement, Primedica agrees that it shall execute and deliver all other
instruments and shall take all other actions as Metcare may reasonably request
to effectuate the contemplated transactions. Primedica agrees that it shall take
whatever action may be necessary as soon as practicable after execution of this
Agreement to ensure that any governmental licenses or certificates held by
Primedica prior to the Closing and necessary for Metcare's operation of the
assets acquired pursuant to this Agreement are transferred from Primedica to
Metcare as soon as practicable after the Closing Date.
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ARTICLE VII
Covenants of Metcare
Section VII.1 Further Assurances. From time to time after the date of
this Agreement, Metcare shall execute and deliver all other instruments and
shall take all other actions as Primedica may reasonably request to effectuate
the transactions contemplated by this Agreement.
ARTICLE VIII
Indemnification
Section VIII.1 Indemnification. Each party agrees to fully, completely,
and unconditionally indemnify, defend, and hold the other party and their
directors, officers, employees, agents, and affiliates harmless from and against
any and all claims, actions, liability, loss, cost, and expenses, proceedings,
investigations, causes of action, whether suit is instituted or not and, if
instituted, at any trial or appellate level, and whether raised by the parties
to this Agreement or any third party (including, without limitation, costs of
judgments, settlements, court costs, and attorneys' fees, costs and expenses)
arising out of or relating to, or alleged to arise out of or relate to,
negligent or intentional acts or omissions of the indemnifying party, or any
failure by the indemnifying party to perform any obligation or covenant of the
indemnifying party under this Agreement. Metcare shall be jointly and severally
liable for all of Parent's obligations under this Agreement, including, without
limitation, any indemnification obligations. Parent shall be jointly and
severally liable for all of Metcare's obligations under this Agreement
including, without limitation, any indemnification obligations.
ARTICLE IX
Miscellaneous
Section IX.1 Brokers' Commission. Metcare and Parent will jointly and
severally indemnify and hold harmless Primedica from any commission, fee or
claim of any person, firm or corporation employed or retained or claiming to be
employed or retained by Metcare or Parent to bring about, or to represent it in,
the transactions contemplated by this Agreement. Primedica will indemnify and
hold harmless Metcare and Parent from any commission, fee or claim of any
person, firm or corporation employed or retained or claiming to be employed or
retained by Primedica to bring about, or to represent them in, the transactions
contemplated by this Agreement.
Section IX.2 Amendment and Modification. This Agreement and the Related
Documents may not be modified or terminated orally, and no modification or
termination shall be binding unless in writing and signed by the parties to this
Agreement.
Section IX.3 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors, assigns,
heirs, estates, beneficiaries, executors and legal and personal representatives.
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Section IX.4 No Waiver; Remedies Cumulative. This Agreement and the
Exhibits and Schedules attached to this Agreement, the Disclosure Document and
the Related Documents contain the entire agreement of the parties with respect
to the acquisition and the other transactions contemplated in this Agreement,
and merges and supersedes all prior understandings and agreements among the
parties with respect to the subject matter of this Agreement. Failure of any
party to enforce one or more of the provisions of this Agreement or to require
at any time performance of any of the obligations under this Agreement shall not
be construed to be a waiver of any provisions by any party nor to in any way
affect the validity of this Agreement or any party's right to enforce any
provision of this Agreement nor to preclude any party from taking all other
action at any time which it would legally be entitled to take. All waivers to be
effective shall be in writing signed by the waiving party.
Section IX.5 Headings. The descriptive headings in this Agreement are
inserted for convenience of reference only and shall in no way restrict or
otherwise affect the construction of the terms or provisions of this Agreement.
Any references in this Agreement to Sections, Exhibits and Schedules are the
Sections, Exhibits and Schedules of this Agreement, the Related Documents or the
Disclosure Document.
Section IX.6 Execution in Counterparts. This Agreement may be executed
in any number of multiple counterparts, each of which shall be deemed an
original and all of which together shall be deemed to be one and the same
instrument. Each party agrees to be bound by any telecopied signature to this
Agreement or any agreement executed in connection herewith as if a manually
executed signature page had been executed and delivered.
Section IX.7 Notices. Whenever any notice, request, information or
other document is required or permitted to be given under this Agreement, that
notice, demand or request shall be in writing and shall be either hand
delivered, sent by United States certified mail, postage prepaid, delivered via
overnight courier to the addresses below or to any other address that any party
may specify by notice to the other parties. No party shall be obligated to send
more than one notice to each of the other parties and no notice of a change of
address shall be effective until received by the other parties. A notice shall
be deemed received upon hand delivery or telecopy transmission, two days after
posting in the United States mail or one day after dispatch by overnight
courier.
If to Metcare: METCARE VII, INC.
350 NW 12th Avenue
Deerfield Beach, Florida 33442
Attn: Anthony Gigliotti, President
If to Parent: METROPOLITAN HEALTH NETWORKS, INC.
350 NW 12th Avenue
Deerfield Beach, Florida 33442
Attn: ________________________
with a copy to: METCARE VII, INC.
350 NW 12th Avenue
Deerfield Beach, Florida 33442
Attn: Roberto Palenzuela, General Counsel
If to Primedica: PRIMEDICA HEALTHCARE, INC.
4651 Sheridan Street, Suite 400
Hollywood, Florida 33021
ATTN: Jay A. Martus, Esq.,
Vice President and General Counsel
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Section IX.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida, without regard to
its conflicts of law principles.
Section IX.9 Expenses and Taxes. All accounting, legal and other costs
and expenses incurred in connection with the negotiation of this Agreement and
the transactions contemplated by this Agreement shall be paid by the party
incurring those fees, costs and expenses. Except as provided in the next
sentence, in no event shall Metcare be liable for taxes imposed upon Primedica
including, without limitation, any and all taxes upon their incomes, taxes
incurred prior to the Closing Date and sales taxes. Metcare and Parent shall be
solely responsible for all (i) taxes imposed upon the conveyance of the Assets
and (ii) sales, use or excise taxes payable in connection with the contemplated
transactions.
Section IX.10 Waiver. Any party to this Agreement may extend the time
for or waive the performance of any of the obligations of the other, waive any
inaccuracies in the representations or warranties by the other, or waive
compliance by the other with any of the covenants or conditions contained in
this Agreement. Any extension or waiver shall be in writing and signed by the
parties. No waiver shall operate or be construed as a waiver of any subsequent
act or omission of the parties.
Section IX.11 Severability. The invalidity or unenforceability of any
one or more of the words, phrases, sentences, clauses, or sections contained in
this Agreement shall not affect the validity or enforceability of the remaining
provisions of this Agreement or any part of any provision, all of which are
inserted conditionally on their being valid in law, and in the event that any
one or more of the words, phrases, sentences, clauses or sections contained in
this Agreement shall be declared invalid or unenforceable, this Agreement shall
be construed as if such invalid or unenforceable word or words, phrase or
phrases, sentence or sentences, clause or clauses, or section or sections had
not been inserted or shall be enforced as nearly as possible according to their
original terms and intent to eliminate any invalidity or unenforceability.
Section IX.12 Litigation; Prevailing Party. Except as otherwise
required by applicable law or as expressly provided in this Agreement, in the
event of any litigation, including appeals, with regard to this Agreement, the
prevailing party shall be entitled to recover from the non-prevailing party all
reasonable fees, costs, and expenses of counsel (at pre-trial, trial and
appellate levels).
Section IX.13 Construction. This Agreement shall be construed without
regard to any presumption or other rule requiring construction against the party
causing this Agreement to be drafted, including any presumption of superior
knowledge or responsibility based upon a party's business or profession or any
professional training, experience, education or degrees of any member, agent,
officer of employee of any party. If any words in this Agreement have been
stricken out or otherwise eliminated (whether or not any other words or phrases
have been added) and the stricken words initialed by the party against whom the
words are construed, then this Agreement shall be construed as if the words so
stricken out or otherwise eliminated were never included in this Agreement and
no implication or inference shall be drawn from the fact that those words were
stricken out or otherwise eliminated.
Section IX.14 Mergers and Consolidation; Successors and Assigns.
Metcare and Parent shall not have the right to assign their rights or delegate
their duties and obligations under this Agreement. The parties acknowledge and
agree that the provisions of this Agreement, are assignable by Primedica to any
assignee, successor or Affiliate and, upon that assignment, the assignee,
successor or affiliate shall be entitled to enforce the provisions of this
Agreement.
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Section IX.15 Jurisdiction; Venue; Inconvenient Forum; Jury Trial. ANY
SUIT, ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, OR ANY JUDGMENT
ENTERED BY ANY COURT IN RESPECT TO THIS AGREEMENT SHALL BE BROUGHT IN THE COURTS
OF THE STATE OF FLORIDA OR IN THE U.S. DISTRICT COURT FOR THE SOUTHERN DISTRICT
OF FLORIDA IN BROWARD COUNTY, AND THE PARTIES ACCEPT THE EXCLUSIVE PERSONAL
JURISDICTION OF THOSE COURTS FOR THE PURPOSE OF ANY SUIT, ACTION OR PROCEEDING.
IN ADDITION, THE PARTIES KNOWINGLY, INTENTIONALLY AND IRREVOCABLY WAIVE, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THEY MAY NOW OR LATER HAVE
TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR ANY JUDGMENT ENTERED BY ANY COURT BROUGHT IN THE
STATE OF FLORIDA, AND FURTHER, KNOWINGLY, INTENTIONALLY AND IRREVOCABLY WAIVE
ANY CLAIM THAT ANY SUIT, ACTION OR PROCEEDING BROUGHT IN THE STATE OF FLORIDA
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY WAIVES ALL RIGHTS TO ANY
TRIAL BY JURY IN ALL LITIGATION RELATING TO OR ARISING OUT OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be duly executed as of the date first written above.
METCARE:
METCARE VII, INC.
a Florida corporation
By: /s/ Noel J. Guillama
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Noel J. Guillama, President
PARENT:
METROPOLITAN HEALTH NETWORKS, INC.
a Florida corporation
By:/s/ Noel J. Guillama
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Print Name: Noel J. Guillama
Print Title: President
PRIMEDICA:
PRIMEDICA HEALTHCARE, INC.
By: /s/ Jay A. Martus
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Jay A. Martus, Vice President
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Promissory Note
FOR VALUE RECEIVED, the undersigned Borrowers unconditionally promise to
pay to the order of Primedica Healthcare, Inc. ("Primedica"), its successors and
assigns, without setoff, at 4651 Sheridan Street, Hollywood Florida 33021, or at
any other place as may be designated by Primedica, the principal amount of Three
Million Five Hundred Thousand Dollars ($3,500,000.00), together with interest
computed daily on the outstanding principal balance hereunder, at an annual
interest rate, and in accordance with the payment schedule, indicated below.
1. Fixed Rate. The Rate shall be fixed at seven and one-half percent (7.5%) per
annum. Notwithstanding any provision of this Note, Primedica does not intend to
charge and Borrowers shall not be required to pay any amount of interest or
other charges in excess of the maximum permitted by the applicable law of the
State of Florida; if any higher rate ceiling is lawful, then that higher rate
ceiling shall apply. Any payment in excess of such maximum shall be refunded to
Borrowers or credited against principal, at the option of Primedica.
2. Accrual Method. Unless otherwise indicated, interest at the Rate set forth
above will be calculated by the 360 day method (a daily amount of interest is
computed for a hypothetical year of 360 days; that amount is multiplied by the
actual number of days for which any principal is outstanding hereunder).
3. Payment Schedule. All payments received hereunder shall be applied first to
the payment of any expense or charges payable hereunder, then to interest due
and payable, with the balance applied to principal, or in such other order as
Primedica shall determine at its option.
4. Fixed Principal and Interest. Principal and interest shall be paid in
consecutive installments in the amounts and on the dates shown on Exhibit A to
this promissory note, payable monthly commencing on May 2, 1998, and continuing
on the same day thereafter, with a final payment of all unpaid principal and
interest due thereon on April 2, 2003. If, on any payment date, accrued interest
exceeds the installment amount set forth above, Borrowers will also pay such
excess as and when billed.
In the event that any of Borrowers or their successors or asigns
completes a public debt or equity financing prior to April 2, 2003, Borrowers
would be obligated to prepay a portion of the note with the proceeds of the
financing. The amount of the prepayment would be equal to the present value of
the Note Reduction (defined below), discounted from April 2, 2003 to the date of
the prepayment, based on monthly compounding at an interest rate equal to the
incremental borrowing rate for bank financing by Borrowers at the time of the
prepayment. The Note Reduction amount would be equal to (i) 5% of the net
proceeds of the financing, divided by (ii) the outstanding principal balance of
this Note at the time the prepayment is due, times (iii) $3,050,681.00 (the
principal portion of the final payment due on April 2, 2003).
The prepayment amount that would satisfy the entire note would be equal
to the present value of $3,050,681.00, discounted from April 2, 2003 to the date
of the prepayment, based on monthly compounding at an interest rate equal to the
incremental borrowing rate for bank financing by Borrowers at the time of the
prepayment. Future payments of principal and interest after a prepayment due to
Borrowers financing shall be reduced by the product of the (i) Note Reduction
Amount divided by 3,050,681.00; multiplied by (ii) the then existing payment
amount.
5. Waivers, Consents and Covenants. Borrowers, any indorser or guarantor hereof,
or any other party hereto (individually an "Obligor" and collectively
"Obligors") and each of them jointly and severally: (a) waive presentment,
demand, protest, notice of demand, notice of intent to accelerate, notice of
acceleration of maturity, notice of protest, notice of nonpayment, notice of
dishonor, and any other notice required to be given under the law to any Obligor
in connection with the delivery, acceptance, performance, default or enforcement
of this Note, any indorsement or guaranty of this Note, or any other documents
executed in connection with this Note or any other note or other loan documents
now or hereafter executed in connection with any obligation of Borrowers to
Primedica (the "Loan Documents"); (b) consent to all delays, extensions,
renewals or other modifications of this Note or the Loan Documents, or waivers
of any term hereof or of the Loan Documents, or release or discharge by
Primedica of any of Obligors, or release, substitution or exchange of any
security for the payment hereof, or the failure to act on the part of Primedica,
or any indulgence shown by Primedica (without notice to or further assent from
any of Obligors), and agree that no such action, failure to act or failure to
exercise any right or remedy by Primedica shall in any way affect or impair the
obligations of any Obligors or be construed as a waiver by Primedica of, or
otherwise affect, any of Primedica's rights under this Note, under any
indorsement or guaranty of this Note or under any of the Loan Documents; and (c)
agree to pay, on demand, all costs and expenses of collection or defense of this
Note or of any indorsement or guaranty hereof and/or the enforcement or defense
of Primedica's rights with respect to, or the administration, supervision,
preservation, or protection of, or realization upon, any property securing
payment hereof, including, without limitation, reasonable attorney's and
paralegal's fees,
<PAGE>
including fees related to any suit, mediation or arbitration proceeding, out of
court payment agreement, trial, appeal, Bankruptcy proceedings or other
proceeding, in such amount as may be determined reasonable by any arbitrator or
court, whichever is applicable.
6. Indemnification. Obligors agree to promptly pay, indemnify and hold Primedica
harmless from all State and Federal taxes of any kind and other liabilities with
respect to or resulting from the execution and/or delivery of this Note or any
advances made pursuant to this Note.
7. Prepayments. All prepayments of principal shall be applied in the inverse
order of maturity, or in such other order as Primedica shall determine in its
sole discretion.
8. Delinquency Charge. To the extent permitted by law, a delinquency charge may
be imposed in an amount not to exceed four percent (4%) of any payment that is
more than fifteen days late.
9. Events of Default. The following are events of default hereunder: (a) the
failure to pay or perform any obligation, liability or indebtedness of any
Obligor to Primedica, or to any affiliate or subsidiary of Primedica, whether
under this Note or any Loan Documents, as and when due (whether upon demand, at
maturity or by acceleration); (b) the failure to pay or perform any other
obligation, liability or indebtedness of any Obligor to any other party; (d) the
commencement of a proceeding against any Obligor for dissolution or liquidation,
the voluntary or involuntary termination or dissolution of any Obligor or the
merger or consolidation of any Obligor with or into another entity; (e) the
insolvency of, the business failure of, the appointment of a custodian, trustee,
liquidator or receiver for or for any of the property of, the assignment for the
benefit of creditors by, or the filing of a petition under Bankruptcy,
insolvency or debtor's relief law or the filing of a petition for any adjustment
of indebtedness, composition or extension by or against any Obligor; (g) the
failure of any Obligor to timely deliver such financial statements, including
tax returns, other statements of condition or other information, as Primedica
shall request from time to time; (h) the entry of a judgment against any Obligor
which Primedica deems to be of a material nature, in Primedica's sole
discretion; (i) the seizure or forfeiture of, or the issuance of any writ of
possession, garnishment or attachment, or any turnover order for any property of
any Obligor; (j) the determination by Primedica that it is insecure for any
reason; (k) the determination by Primedica that a material adverse change has
occurred in the financial condition of any Obligor; or (l) the failure of
Borrowers' business to comply with any law or regulation controlling its
operation.
10. Remedies upon Default. Whenever there is a default under this Note (a) the
entire balance outstanding hereunder and all other obligations of any Obligor to
Primedica (however acquired or evidenced) shall, at the option of Primedica,
become immediately due and payable and any obligation of Primedica to permit
further borrowing under this Note shall immediately cease and terminate, and/or
(b) to the extent permitted by law, the Rate of interest on the unpaid principal
shall be increased at Primedica's discretion up to the maximum rate allowed by
law, or if none, 18% per annum (the "Default Rate"). The provisions herein for a
Default Rate shall not be deemed to extend the time for any payment hereunder or
to constitute a "grace period" giving Obligors a right to cure any default. At
Primedica's option, any accrued and unpaid interest, fees or charges may, for
purposes of computing and accruing interest on a daily basis after the due date
of the Note or any installment thereof, be deemed to be a part of the principal
balance, and interest shall accrue on a daily compounded basis after such date
at the Default Rate provided in this Note until the entire outstanding balance
of principal and interest is paid in full. Additionally, Primedica shall have
all rights and remedies available under each of the Loan Documents, as well as
all rights and remedies available at law or in equity. Any judgment rendered on
this Note shall bear interest at the highest rate of interest permitted pursuant
to Chapter 687, Florida Statutes.
11. Non-waiver. The failure at any time of Primedica to exercise any of its
options or any other rights hereunder shall not constitute a waiver thereof, nor
shall it be a bar to the exercise of any of its options or rights at a later
date. All rights and remedies of Primedica shall be cumulative and may be
pursued singly, successively or together, at the option of Primedica. The
acceptance by Primedica of any partial payment shall not constitute a waiver of
any default or of any of Primedica's rights under this Note. No waiver of any of
its rights hereunder, and no modification or amendment of this Note, shall be
deemed to be made by Primedica unless the same shall be in writing, duly signed
on behalf of Primedica; each such waiver shall apply only with respect to the
specific instance involved, and shall in no way impair the rights of Primedica
or the obligations of Obligors to Primedica in any other respect at any other
time.
12. Applicable Law, Venue and Jurisdiction. This Note and the rights and
obligations of Borrowers and Primedica shall be governed by and interpreted in
accordance with the law of the State of Florida. In any litigation in connection
with or to enforce this Note or any indorsement or guaranty of this Note or any
Loan Documents, Obligors, and each of them, irrevocably consent to and confer
personal jurisdiction on the courts of the State of Florida or the United States
located within the State of Florida and expressly waive any objections as to
venue in any such courts. Nothing contained herein shall, however, prevent
Primedica from bringing any action or exercising
<PAGE>
any rights within any other state or jurisdiction or from obtaining personal
jurisdiction by any other means available under applicable law. The interest
rate charged on this Note is authorized by Chapter 655, Florida Statutes and
Section 687.12, Florida Statutes.
13. Partial Invalidity. The unenforceability or invalidity of any provision of
this Note shall not affect the enforceability or validity of any other provision
herein and the invalidity or unenforceability of any provision of this Note or
of the Loan Documents to any person or circumstance shall not affect the
enforceability or validity of such provision as it may apply to other persons or
circumstances.
14. Binding Effect. This Note shall be binding upon and inure to the benefit of
Borrowers, Obligors and Primedica and their respective successors, assigns,
heirs and personal representatives, provided, however, that no obligations of
Borrowers or Obligors hereunder can be assigned without prior written consent of
Primedica.
15. Controlling Document. To the extent that this Note conflicts with or is in
any way incompatible with any other document related specifically to the loan
evidenced by this Note, this Note shall control over any other such document,
and if this Note does not address an issue, then each other such document shall
control to the extent that it deals most specifically with an issue.
16. WAIVER OF JURY TRIAL. PRIMEDICA AND BORROWERS HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO TRIAL BY JURY IN RESPECT TO
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
NOTE AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS, (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF EITHER PARTY. BORROWERS ACKNOWLEDGE THAT THIS WAIVER OF
JURY TRIAL IS A MATERIAL INDUCEMENT TO PRIMEDICA IN EXTENDING CREDIT TO THE
BORROWERS, THAT PRIMEDICA WOULD NOT HAVE EXTENDED SUCH CREDIT WITHOUT THIS JURY
TRIAL WAIVER, AND THAT BORROWERS HAVE BEEN REPRESENTED BY AN ATTORNEY OR HAVE
HAD AN OPPORTUNITY TO CONSULT WITH AN ATTORNEY IN CONNECTION WITH THIS JURY
TRIAL WAIVER AND UNDERSTAND THE LEGAL EFFECT OF THIS WAIVER.
BORROWERS ACKNOWLEDGE HAVING READ AND UNDERSTOOD, AND AGREE TO BE BOUND BY, ALL
TERMS AND CONDITIONS OF THIS NOTE AND HEREBY EXECUTE THIS NOTE UNDER SEAL AS OF
THE DATE HERE ABOVE WRITTEN.
NOTICE OF FINAL AGREEMENT. THIS WRITTEN PROMISSORY NOTE REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
EXECUTION DATE: April ____, 1998
BORROWERS:
(Seal)
METCARE VII, INC.
By: /s/ Noel J. Guillama
--------------------------------------
Noel J. Guillama, President
METROPOLITAN HEALTH NETOWRKS, INC.
By: /s/ Noel J. Guillama
---------------------------------------
Print Name: Noel J. Guillama
Print Title: President
3
REPURCHASE ELECTION AGREEMENT
THIS REPURCHASE ELECTION AGREEMENT (the "Agreement"), is dated as of
April 2, 1998 (the "Execution Date) and is by and among PRIMEDICA HEALTHCARE,
INC., a Florida corporation ("Primedica") and METCARE VII, INC., a Florida
corporation ("Metcare"), and METROPOLITAN HEALTHCARE NETWORKS, INC., a Florida
corporation ("Parent").
PRELIMINARY STATEMENTS
1. On April 2, 1998 (the "Execution Date"), Metcare, Parent and
Primedica entered into an Asset Purchase Agreement, (the "APA"). Capitalized
terms not defined in this Agreement have the meanings given them in the APA.
2. Subject to the conditions of this Agreement, Metcare is desirous of
having the right, after five years of prompt and full payment to Primedica of
its obligations under the Note, to cause Primedica to acquire substantially all
of the Assets, free and clear of all liens, claims and encumbrances, in exchange
for extinguishing Metcare and Parent's further obligations under the Note (the
"Purchase Price").
AGREEMENT
In consideration of the respective agreements and covenants in this
Agreement and subject to the conditions contained in this Agreement, the
parties, intending to be legally bound, agree as follows:
ARTICLE I
Election Procedure, Documentation, Purchase Price and Due Diligence
Section 1.1 Election Notice. Provided Metcare and Parent have paid all
principal, interest and any other amounts due under the Note through the
Election Date (as defined below), within sixty days after the Fifth Anniversary
of the Execution Date (the "Election Date"), Metcare may send to Primedica, in
accordance with the notice provisions in this Agreement, a written notice (the
"Notice"), indicating its intention to cause Primedica to acquire the Assets (an
"Election").
Section 1.2 Document Preparation . Primedica shall prepare and deliver
to Metcare, within thirty days of the date the Notice has been sent, usual and
customary documentation, including without limitation, representations,
warranties, covenants and indemnifications (the "Documentation") for the
acquisition of the Assets.
Section 1.3 Due Diligence. Within thirty (30) days subsequent to the
date Notice has been sent (the "Notice Date"), Metcare and Parent shall allow
Primedica and its authorized representatives reasonable access to all of Metcare
and Parent's premises in any way relating to the Assets, accountants, attorneys,
books, records and all pertinent other sources of information
<PAGE>
concerning the Assets and to the extent relevant, in order to conduct due
diligence, and provided Metcare and Parent have timely cooperated with
Primedica's diligence efforts, Primedica shall complete its due diligence within
ninety (90) days of the Notice Date.
Section 1.4 Conditions to Primedica's Obligation to Close. Primedica's
obligations (the "Obligations") to acquire the Assets is subject to Metcare's
and Parent's prompt and full compliance with its obligations described in the
immediately preceding sentence (the "Cooperation") and Primedica's satisfaction,
in Primedica's reasonable discretion, with the results of its due diligence.
Primedica shall exert its reasonable best efforts to promptly conclude its
diligence. If Primedica reasonably determines that fulfillment of its
Obligations are being impeded by a lack of Cooperation, then Primedica shall
send to Metcare and Parent a notice, in accordance with the notice provisions in
this Agreement, specifying that lack of Cooperation. If Metcare and Parent do
not cause that lack of Cooperation to be rectified to Primedica's reasonable
satisfaction within fifteen days of the date the lack of Cooperation notice was
sent by Primedica, then Primedica may elect, by written notice to not fulfill
its Obligations and Primedica shall have no liability or obligations to Metcare
and Parent whatsoever under this Agreement and Metcare and Parent shall promptly
and completely fulfill their obligations under the Note. If Primedica reasonably
determines, in its due diligence that: (i) Metcare and Parent or any other party
has incurred obligations for borrowed money which encumber the Assets and for
which Metcare and Parent have not agreed in its notice to completely satisfy
prior to the sale of the Assets; (ii) Metcare, Parent or any other party has
encumbered the Assets or assigned any of its material rights to third parties;
(iii) there are any extraordinary non-ordinary course obligations which encumber
the Assets; (iv) there are any excessively burdensome contractual obligations
which affect the Assets; (v) there are any material litigation or judgements
which affect or reasonably could affect the Assets; (vi) there are any material
legal compliance issues involving or which reasonably could involve the Assets;
(viii) there are any material non-market value ordinary course obligations
affecting the Assets; (ix) there are any material environmental liabilities
which could affect Primedica as a successor in interest; (x) the Assets have
suffered a material adverse change; (xi) the assets or business involving the
Assets has or foreseeably could be in a condition where a reasonably prudent
acquirer would not acquire the Assets for the Purchase Price; or (xii) net
revenues, (net of any medical claims expenses or other expenses to non-employee
providers, labs or any health care facilities) derived from the Assets shall be
at least Six Million Dollars ($6,000,000.00) for the year immediately preceding
the Election Date as determined by GAAP, then Primedica may elect, by written
notice to not fulfill its Obligations and Primedica shall have no liability or
obligations to Metcare or Parent or whatsoever under this Agreement and Metcare
and Parent shall promptly and completely fulfill its obligations under the Note.
Section 1.5 Document Finalization and Closing. Within thirty (30) days
of the date the Documentation is sent, written comments shall be sent to
Primedica by Metcare and Parent. Within fifteen (15) days of the date the
comments have been sent representatives of Primedica, representatives of Metcare
and Parent themselves shall meet at Primedica's offices until final documents
are agreed to or the parties agree otherwise. Within fifteen (15) days of the
date that the
2
<PAGE>
parties finally agree upon the form of Documentation, the Closing
of the acquisition of the Assets in exchange for the Purchase Price shall occur
at Primedica's offices.
3
<PAGE>
ARTICLE II
Miscellaneous
Section 2.1 Amendment and Modification. This Agreement and the Related
Documents may not be modified or terminated orally, and no modification or
termination shall be binding unless in writing and signed by the parties to this
Agreement.
Section 2.2 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors, assigns,
heirs, estates, beneficiaries, executors and legal and personal representatives.
Section 2.3 No Waiver; Remedies Cumulative. This Agreement and the
Exhibits and Schedules attached to this Agreement, the Disclosure Document and
the Related Documents contain the entire agreement of the parties with respect
to the acquisition and the other transactions contemplated in this Agreement,
and merges and supersedes all prior understandings and agreements among the
parties with respect to the subject matter of this Agreement. Failure of any
party to enforce one or more of the provisions of this Agreement or to require
at any time performance of any of the obligations under this Agreement shall not
be construed to be a waiver of any provisions by any party nor to in any way
affect the validity of this Agreement or any party's right to enforce any
provision of this Agreement nor to preclude any party from taking all other
action at any time which it would legally be entitled to take. All waivers to be
effective shall be in writing signed by the waiving party.
Section 2.4 Headings. The descriptive headings in this Agreement are
inserted for convenience of reference only and shall in no way restrict or
otherwise affect the construction of the terms or provisions of this Agreement.
Any references in this Agreement to Sections, Exhibits and Schedules are the
Sections, Exhibits and Schedules of this Agreement, the Related Documents or the
Disclosure Document.
Section 2.5 Execution in Counterparts. This Agreement may be executed
in any number of multiple counterparts, each of which shall be deemed an
original and all of which together shall be deemed to be one and the same
instrument. Each party agrees to be bound by any telecopied signature to this
Agreement or any agreement executed in connection herewith as if a manually
executed signature page had been executed and delivered.
Section 2.6 Notices. Whenever any notice, request, information or other
document is required or permitted to be given under this Agreement, that notice,
demand or request shall be in writing and shall be either hand delivered, sent
by United States certified mail, postage prepaid, delivered via overnight
courier to the addresses below or to any other address that any party may
specify by notice to the other parties. No party shall be obligated to send more
than one notice to each of the other parties and no notice of a change of
address shall be effective until received by the other parties. A notice shall
be deemed received upon hand delivery or telecopy transmission, two days after
posting in the United States mail or one day after dispatch by overnight
courier.
4
<PAGE>
If to Metcare: METCARE VII, INC.
350 NW 12th Avenue
Deerfield Beach, Florida 33442
Attn: Anthony Gigliotti, President
If to Parent: METROPOLITAN HEALTH NETWORKS, INC.
350 NW 12th Avenue
Deerfield Beach, Florida 33442
Attn: _____________________________
With a copy to: METCARE VII, INC.
350 NW 12th Avenue
Deerfield Beach, Florida 33442
Attn: Roberto Palenzuela, General Counsel
If to Primedica: Primedica Healthcare, Inc.
4651 Sheridan Street, Suite 400
Hollywood, Florida 33021
ATTN: Jay A. Martus, Esq.,
Vice President and General Counsel
Section 2.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida, without regard to
its conflicts of law principles.
Section 2.8 Expenses and Taxes. All accounting, legal and other costs
and expenses incurred in connection with the negotiation of this Agreement and
the transactions contemplated by this Agreement shall be paid by the party
incurring those fees, costs and expenses. Except as provided in the next
sentence, in no event shall Metcare be liable for taxes imposed upon Primedica
including, without limitation, any and all taxes upon their incomes, taxes
incurred prior to the Closing Date and sales taxes. Metcare shall be solely
responsible for all (i) taxes imposed upon the conveyance of the Assets and (ii)
sales, use or excise taxes payable in connection with the contemplated
transactions.
Section 2.9 Waiver. Any party to this Agreement may extend the time for
or waive the performance of any of the obligations of the other, waive any
inaccuracies in the representations or warranties by the other, or waive
compliance by the other with any of the covenants or conditions contained in
this Agreement. Any extension or waiver shall be in writing and signed by the
parties. No waiver shall operate or be construed as a waiver of any subsequent
act or omission of the parties.
Section 2.10 Severability. The invalidity or unenforceability of any
one or more of the words, phrases, sentences, clauses, or sections contained in
this Agreement shall not affect the validity or enforceability of the remaining
provisions of this Agreement or any part of any provision, all of which are
inserted conditionally on their being valid in law, and in the event that any
one
5
<PAGE>
or more of the words, phrases, sentences, clauses or sections contained in
this Agreement shall be declared invalid or unenforceable, this Agreement shall
be construed as if such invalid or unenforceable word or words, phrase or
phrases, sentence or sentences, clause or clauses, or section or sections had
not been inserted or shall be enforced as nearly as possible according to their
original terms and intent to eliminate any invalidity or unenforceability.
Section 2.11 Litigation; Prevailing Party. Except as otherwise required
by applicable law or as expressly provided in this Agreement, in the event of
any litigation, including appeals, with regard to this Agreement, the prevailing
party shall be entitled to recover from the non-prevailing party all reasonable
fees, costs, and expenses of counsel (at pre-trial, trial and appellate levels).
Section 2.12 Construction. This Agreement shall be construed without
regard to any presumption or other rule requiring construction against the party
causing this Agreement to be drafted, including any presumption of superior
knowledge or responsibility based upon a party's business or profession or any
professional training, experience, education or degrees of any member, agent,
officer of employee of any party. If any words in this Agreement have been
stricken out or otherwise eliminated (whether or not any other words or phrases
have been added) and the stricken words initialed by the party against whom the
words are construed, then this Agreement shall be construed as if the words so
stricken out or otherwise eliminated were never included in this Agreement and
no implication or inference shall be drawn from the fact that those words were
stricken out or otherwise eliminated.
Section 2.13 Mergers and Consolidation; Successors and Assigns. Metcare
shall not have the right to assign their rights or delegate their duties and
obligations under this Agreement. The parties acknowledge and agree that the
provisions of this Agreement, are assignable by Primedica to any assignee,
successor or Affiliate and, upon that assignment, the assignee, successor or
affiliate shall be entitled to enforce the provisions of this Agreement.
Section 2.14 Jurisdiction; Venue; Inconvenient Forum; Jury Trial. ANY
SUIT, ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, OR ANY JUDGMENT
ENTERED BY ANY COURT IN RESPECT TO THIS AGREEMENT SHALL BE BROUGHT IN THE COURTS
OF THE STATE OF FLORIDA OR IN THE U.S. DISTRICT COURT FOR THE SOUTHERN DISTRICT
OF FLORIDA IN BROWARD COUNTY, AND THE PARTIES ACCEPT THE EXCLUSIVE PERSONAL
JURISDICTION OF THOSE COURTS FOR THE PURPOSE OF ANY SUIT, ACTION OR PROCEEDING.
IN ADDITION, THE PARTIES KNOWINGLY, INTENTIONALLY AND IRREVOCABLY WAIVE, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THEY MAY NOW OR LATER HAVE
TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR ANY JUDGMENT ENTERED BY ANY COURT BROUGHT IN THE
STATE OF FLORIDA, AND FURTHER, KNOWINGLY, INTENTIONALLY AND IRREVOCABLY WAIVE
ANY CLAIM THAT ANY SUIT, ACTION OR PROCEEDING BROUGHT IN THE STATE OF FLORIDA
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH
6
<PAGE>
PARTY WAIVES ALL RIGHTS TO ANY TRIAL BY JURY IN ALL LITIGATION RELATING TO OR
ARISING OUT OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be duly executed as of the date first written above.
METCARE:
METCARE VII, INC.
a Florida corporation
By: /s/ Noel J. Guillama
-------------------------------------
Noel J. Guillama, President
PARENT:
METROPOLITAN HEALTH NETWORKS, INC.
a Florida corporation
By: /s/ Noel J. Guillama
------------------------------------
Print Name: Noel J. Guillama
Print Title: President
PRIMEDICA:
PRIMEDICA HEALTHCARE, INC.
By: /s/ Jay A. Martus
-------------------------------------
Jay A. Martus, Vice President
7
