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
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
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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.
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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.
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If to Metcare: METCARE VII, INC.
000 XX 00xx Xxxxxx
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxxx, President
If to Parent: METROPOLITAN HEALTH NETWORKS, INC.
000 XX 00xx Xxxxxx
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Attn: _____________________________
With a copy to: METCARE VII, INC.
000 XX 00xx Xxxxxx
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxxxx, General Counsel
If to Primedica: Primedica Healthcare, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxx 00000
ATTN: Xxx X. Xxxxxx, 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
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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
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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/ Xxxx X. Xxxxxxxx
-------------------------------------
Xxxx X. Xxxxxxxx, President
PARENT:
METROPOLITAN HEALTH NETWORKS, INC.
a Florida corporation
By: /s/ Xxxx X. Xxxxxxxx
------------------------------------
Print Name: Xxxx X. Xxxxxxxx
Print Title: President
PRIMEDICA:
PRIMEDICA HEALTHCARE, INC.
By: /s/ Xxx X. Xxxxxx
-------------------------------------
Xxx X. Xxxxxx, Vice President
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