Exhibit 10.6
COMMON STOCK PURCHASE AGREEMENT
This COMMON STOCK PURCHASE AGREEMENT (this Agreement) is dated as of February
18, 2002 and between Metropolitan Health Networks, Inc., a Florida corporation
(the Company) and Xxx Xxxxxxx (the Purchaser).
WHEREAS, the parties desire that, upon the terms and subject to the conditions
contained herein, the Company shall issue and sell to Purchaser as provided
herein, and Purchaser shall purchase 50,000 shares of Common Stock of the
Company.
NOW, THEREFORE, in consideration of the foregoing premises, and the promises and
covenants herein contained, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, the parties, intending to be legally bound,
hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE OF COMMON STOCK
Section 1.1 Purchase and Sale of Stock. Subject to the terms and conditions of
this Agreement, the Company will sell and issue to the Purchaser and the
Purchaser will purchase from the Company, 50,000 shares of Common Stock at $1.00
per share for a total purchase price of $50,000 (the Purchase Price), subject to
the terms herein.
Section 1.2 Purchase Price and Closing. The Company agrees to issue and sell to
the Purchaser and, in consideration of and in express reliance upon the
representations, warranties, covenants, terms and conditions of this Agreement
the Purchaser agrees to purchase 50,000 shares of Common Stock (the Shares). The
delivery of executed documents (via fax) under this Agreement and the other
agreements referred to herein (the Closing) shall take place the day the funds
are sent via wire transfer. Each party shall deliver all documents, instruments
and writings required to be delivered by such party pursuant to this Agreement
at or prior to the Closing.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representation and Warranties of the Company. The Company hereby
makes the following representations and warranties to the Purchaser:
(a) Organization, Good Standing and Power. The Company is a corporation
duly incorporated validly existing and in good standing under the laws
of Florida and has all requisite corporate authority to own, lease and
operate its properties and assets and to carry on its business as now
being conducted. The Company does not have any subsidiaries and does
not own more than fifty percent (50%) of or control any other business
entity except as set forth in the SEC Documents. The Company is duly
qualified to do business and is in good standing as a foreign
corporation in every jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary,
other than those in which the failure so to qualify would not have a
Material Adverse Effect.
(b) Authorization, Enforcement. (i) The Company has the requisite corporate
power and corporate authority to enter into and perform its obligations
under the Agreement and to issue the Shares pursuant to their
respective terms, (ii) the execution and delivery of the Agreement by
the Company and the consummation by it of the transactions contemplated
hereby have been duly authorized by all necessary corporate action and
no further consent or authorization of the Company or its Board of
Directors or stockholders is required, and (iii) the Agreement has been
duly executed and delivered by the Company and at the Closing shall
constitute valid and binding obligation of the Company enforceable
against the Company in accordance with their terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation,
conservatorship, receivership or similar laws relating to, or affecting
generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application.
(c) Capitalization. The authorized capital stock of the Company consists of
80,000,000 shares of Common Stock of which 27,142,174 shares are issued
and outstanding as of the date hereof and 10,000,000 shares of Series A
Preferred Stock of which 5,000 are issued and outstanding. All of the
outstanding shares of the Company's Common Stock have been duly and
validly authorized and are fully paid and non-assessable except as set
forth in the SEC Documents. No shares of Common Stock are entitled to
preemptive rights.
(d) No Conflicts. The execution, delivery and performance of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated herein do not and will not (i) violate any provision of
the Company's Charter or Bylaws, (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would
become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, mortgage,
deed of trust, indenture, note, bond, license, lease agreement,
instrument or obligation to which the Company is a party, (iii) create
or impose a lien, charge or encumbrance on any property of the Company
under any agreement or any commitment to which the Company is a party
or by which the Company is bound or by which any of its respective
properties or assets are bound, or (iv) result in a violation of any
federal, state, local or other foreign statute, rule, regulation,
order, judgment or decree (including any federal or state securities
laws and regulations) applicable to the Company or any of its
subsidiaries or by which any property or asset of the Company or any of
its subsidiaries are bound or affected, except, in all cases, for such
conflicts, defaults, termination, amendments, accelerations,
cancellations and violations as would not, individually or in the
aggregate, have a Material Adverse Effect. The business of the Company
and its subsidiaries is not being conducted in violation of any laws,
ordinances or regulations of any governmental entity, except for
violations, which singularly or in the aggregate do not and will not
have a Material Adverse Effect. The Company is not required under any
federal, state or local law, rule or regulation to obtain any consent,
authorization or order of, or make any filing or registration with, any
court or governmental agency in order for it to execute, deliver or
perform any of its obligations under this Agreement, or issue and sell
the Shares in accordance with the terms hereof (other than any filings
which may be required to be made by the Company with the SEC or state
securities administrators and any registration statement which may be
filed pursuant hereto); provided, however, that for purpose of the
representations made in this sentence, the Company is assuming and
relying upon the accuracy of the relevant representations and
agreements of the Purchaser herein.
(e) SEC Documents, Financial Statements. The Common Stock of the Company is
registered pursuant to Section 12(g) of the Exchange Act, and, the
Company is current with all reports, schedules, forms, statements and
other documents required to be filed by it with the SEC pursuant to the
reporting requirements of the Exchange Act, including material filed
pursuant to Section 13(a) or 15(d) of the Exchange Act. As of their
respective filing dates, the SEC Documents complied in all material
respects with the requirements of the Exchange Act or the Securities
Act, as applicable, and the rules and regulations of the SEC
promulgated there under applicable to such documents, and, as of their
respective filing dates, none of the SEC Documents contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading. The financial statements of the Company included
in the SEC Documents comply as to form in all material respects with
applicable accounting requirements under GAAP and the published rules
and regulations of the SEC or other applicable rules and regulations
with respect thereto. Such financial statements have been prepared in
accordance with GAAP applied on a consistent basis during the periods
involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto or (ii) in the case of unaudited
interim statements, to the extent they may not include footnotes or may
be condensed or summary statements), and fairly present in all material
respects the financial position of the Company and its subsidiaries as
of the dates thereof and the results of operations and cash flows for
the periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments).
(f) No Undisclosed Liabilities. Neither the Company nor any of its
subsidiaries has any liabilities, obligations, claims or losses
(whether liquidated or unliquidated, secured or unsecured, absolute,
accrued, contingent or otherwise) that would be required to be
disclosed on a balance sheet of the Company or any subsidiary
(including the notes thereto) in conformity with GAAP which are not
disclosed in the SEC Documents,
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other than those incurred in the ordinary course of the Company or its
subsidiaries' respective businesses since such date and which,
individually or in the aggregate, do not or would not have a Material
Adverse Effect on the Company or its subsidiaries.
(g) Compliance with Law. The Company and each of its subsidiaries have all
franchises, permits, licenses, consents and other governmental or
regulatory authorizations and approvals necessary for the conduct of
their respective businesses as now being conducted by them unless the
failure to possess such franchises, permits, licenses, consents and
other governmental or regulatory authorizations and approvals,
individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
(h) Taxes. The Company and each subsidiary has filed all Tax Returns which
it is required to file under applicable laws; all such Tax Returns are
true and accurate in all material respect, and have been prepared in
compliance with all applicable laws; except as set forth in the SEC
Documents the Company has paid all Taxes due and owing by it or any
subsidiary (whether or not such Taxes are required to be shown on a Tax
Return) and has withheld and paid over to the appropriate taxing
authorities all Taxes which it is required to withhold from amounts
paid or owing to any employee, stockholder, creditor or other third
parties; and since December 31, 2000, the charges, accruals and
reserves for Taxes with respect to the Company (including any
provisions for deferred income taxes) reflected on the books of the
Company are to its knowledge adequate to cover any Tax liabilities of
the Company if its current tax year were treated as ending on the date
hereof.
A taxing authority in a jurisdiction has made no claim, where the Company does
not file tax returns that the Company or any subsidiary is or may be subject to
taxation by that jurisdiction. Except as set forth in the SEC Documents, there
are no foreign, federal, state or local tax audits or administrative or judicial
proceedings pending or being conducted with respect to the Company or any
subsidiary; no information related to Tax matters has been requested by any
foreign, federal, state or local taxing authority; and, except as disclosed
above, no written notice indicating an intent to open an audit or other review
has been received by the Company or any subsidiary from any foreign, federal,
state or local taxing authority. Except as set forth in the SEC Documents, there
are no material unresolved questions or claims concerning the Company's Tax
liability. The Company (A) has not executed or entered into a closing agreement
pursuant to ss. 7121 of the Internal Revenue Code or any predecessor provision
thereof or any similar provision of state, local or foreign law; and (B) has not
agreed to or is required to make any adjustments pursuant to ss. 481 (a) of the
Internal Revenue Code or any similar provision of state, local or foreign law by
reason of a change in accounting method initiated by the Company or any of its
subsidiaries or has any knowledge that the IRS has proposed any such adjustment
or change in accounting method, or has any application pending with any taxing
authority requesting permission for any changes in accounting methods that
relate to the business or operations of the Company. The Company has not been a
United States real property holding corporation within the meaning of ss.
897(c)(2) of the Internal Revenue Code during the applicable period specified in
ss. 897(c)(1)(A)(ii) of the Internal Revenue Code.
For purposes of this Section 2. 1 (h):
IRS means the United States Internal Revenue Service.
Tax or Taxes means federal, state, county, local, foreign, or other income,
gross receipts, ad valorem, franchise, profits, sales or use, transfer,
registration, excise, utility, environmental, communications, real or personal
property, capital stock, license, payroll, wage or other withholding,
employment, social security, severance, stamp, occupation, alternative or add-on
minimum, estimated and other taxes of any kind whatsoever (including, without
limitation, deficiencies, penalties, additions to tax, and interest attributable
thereto) whether disputed or not.
Tax Return means any return, information report or filing with respect to Taxes,
including any schedules attached thereto and including any amendment thereof
(i) Operation of Business. The Company and each of the subsidiaries owns or
possesses all patents, trademarks, service marks, trade names,
copyrights, licenses and authorizations as set forth in the SEC
Documents or on Schedule 2. 1 (i) hereto, and all rights with respect
to the foregoing, which to its knowledge would be
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reasonably necessary for the conduct of its business as now conducted
without any conflict with the rights of others.
(j) Books and Records. The records and documents of the Company and its
subsidiaries accurately reflect in all material respects the
information relating to the business of the Company and the
subsidiaries, the location and collection of their assets, and the
nature of all transactions giving rise to the obligations or accounts
receivable of the Company or any subsidiary.
(k) Securities Laws. The Company has complied and will comply with all
applicable federal and state securities laws in connection with the
offer, issuance and sale of the Shares hereunder. Neither the Company
nor anyone acting on its behalf directly or indirectly, has or will
sell, offer to sell or solicit offers to buy the Shares or similar
securities to, or solicit offers with respect thereto from, or enter
into any preliminary conversations or negotiations relating thereto
with, any person (other than the Purchaser), so as to bring the
issuance and sale of the Shares under the registration provisions of
the Securities Act and applicable state securities laws. Neither the
Company nor any of its affiliates, nor any person acting on its or
their behalf, has engaged in any form of general solicitation or
general advertising (within the meaning of Regulation D under the
Securities Act) in connection with the offer or sale of the Shares.
Section 2.2 Representations and Warranties of the Purchaser. The Purchaser
hereby makes the following representations and warranties to the Company:
(a) Authorization and Power. The Purchaser has the requisite power and
authority to enter into and perform the Agreement and to purchase the
Shares being sold to it hereunder. The execution, delivery and
performance of the Agreement by Purchaser and the consummation by it of
the transactions contemplated hereby have been duly authorized by all
necessary corporate action and at the Closing shall constitute valid
and binding obligations of the Purchaser enforceable against the
Purchaser in accordance with their terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation, conservatorship, receivership or similar laws
relating to, or affecting generally the enforcement of creditors'
rights and remedies or by other equitable principles of general
application.
(b) No Conflicts. The execution, delivery and performance of this Agreement
and the consummation by the Purchaser of the transactions contemplated
hereby or relating hereto do not and will not give to others any rights
of termination, amendment, acceleration or cancellation of any
agreement, indenture or instrument to which the Purchaser is a party,
or result in a violation of any law, rule, or regulation, or any order,
judgment or decree of any court or governmental agency applicable to
the Purchaser or its properties (except for such conflicts, defaults
and violations as would not, individually or in the aggregate, have a
Material Adverse Effect on Purchaser). The Purchaser is not required to
obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it to
execute, deliver or perform any of its obligations under this Agreement
or to purchase the Shares in accordance with the terms hereof.
(c) Financial Risks. The Purchaser acknowledges that it is able to bear the
financial risks associated with an investment in the Shares and that it
has been given full access to such records of the Company and the
subsidiaries and to the officers of the Company and the subsidiaries as
it has deemed necessary or appropriate to conduct its due diligence
investigation. The Purchaser is capable of evaluating the risks and
merits of an investment in the Shares by virtue of its experience as an
investor and its knowledge, experience, and sophistication in financial
and business matters and the Purchaser is capable of bearing the entire
loss of its investment in the Shares.
(d) Accredited Investor. The Purchaser is an accredited investor as defined
in Regulation D promulgated under the Securities Act.
(e) General. The Purchaser understands that the Company is relying upon the
truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of the Purchaser set forth herein in
order to determine the suitability of the Purchaser to acquire the
Shares.
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ARTICLE 3
COVENANTS
Section 3.1 Registration.
(a) REGISTRATION. Within 30 days of the Closing, the Company shall prepare
and file with the Securities and Exchange Commission (the
"Commission"), at the Company's sole expense, a Registration Statement
on Form SB-2 (or, to the extent eligible, on Form SB-3) (the
"Registration Statement") covering all the Shares purchased under (i)
this Agreement; (ii) the Common Share Purchase Agreement, dated
December 29, 2002 between the Company and Xxxxxx Xxxxxxx; and (iii) all
the shares issued to Mako Capital pursuant to the terms and conditions
of a Finders Agreement dated December 12, 2001, as amended on December
14, 2001, entered into between the Company and Mako Capital
(collectively, the "Registrable Securities"). The Company shall use its
best efforts to cause the Registration Statement to be declared
effective under the Securities Act of 1933 (the "Securities Act") as
promptly as possible after the filing thereof, but in any event no
later than April 30, 2002. The Company understands that any delay in
the Registration Statement being declared effective by the Commission
could result in economic loss to the Purchaser. Notwithstanding
anything herein to the contrary, as compensation to the Purchaser for
such potential loss, the Company agrees to pay late payments to the
Purchaser by issuing additional shares of common stock of the Company
to the purchaser, at no additional consideration, in an amount equal to
the total number of Registrable Securities multiplied by the daily rate
of .001667 or 5% per month.
(b) PIGGY-BACK REGISTRATIONS. If at any time prior to Registration of the
Registrable Securities, the Company shall determine to file with the
Commission a Registration Statement relating to an offering for its own
account or the account of others under the Securities Act of any of its
equity securities (other than on Form S-4 or Form S-8 or their then
equivalents relating to equity securities to be issued solely in
connection with any acquisition of any entity or business or entity
securities issuable in connection with stock option or other employee
benefit plans), the Company shall send to Purchaser notice of such
determination and, if within fifteen (15) days after the effective date
of such notice, Purchaser shall so request in writing, the Company
shall include the Registrable Securities in such Registration
Statement. If an offering in connection with which a Purchaser is
entitled to registration under this Section 3.1 is an underwritten
offering, then Purchaser shall, unless otherwise agreed by the Company,
offer and sell the shares in an underwritten offering using the same
underwriter or underwriters and on the same terms and conditions as
other shares of Common Stock included in such underwritten offering.
(c) EFFECTIVENESS. The Company will maintain an effective registration
statement effective under the Securities Act without any suspensions,
blackouts, restrictions or lockups until the earliest of (i) the date
all Registrable Securities have been sold under the Registration
Statement, (ii) the date that all of the shares of the Registrable
Securities have been otherwise transferred to persons who may trade
such shares without restriction under the Securities Act, and the
Company has delivered a new certificate or other evidence of ownership
for such shares not bearing a restrictive legend, and (iii) the date
that all of the shares of the Registrable Securities may be sold
without any time, volume or manner of limitations pursuant to Rule
144(k) or similar provision then in effect under the Securities Act in
the opinion of counsel of the Company (the "Effectiveness Period"). The
Company will prepare and pay for all necessary documents and filings to
maintain an effective registration statement for the duration of the
Effectiveness Period and for purchasers counsel to review registration
statement prior to filing.
(d) POST EFFECTIVE AMENDMENTS. (i) Prepare and file with the Commission, at
the Company's sole expense, such amendments, including post-effective
amendments, to the Registration Statement as may be necessary to keep
the Registration Statement continuously effective as to the applicable
Registrable Securities for the Effectiveness Period and prepare and
file with the Commission such additional Registration Statements in
order to register for resale under the Securities Act all of the
Registrable Securities; (ii) cause the related prospectus to be amended
or supplemented by any required prospectus supplement, and so as
supplemented or amended to be filed pursuant to Rule 424 (or any
similar provisions then in force) promulgated under the Securities Act;
(iii) respond as promptly as possible to any comments received from the
Commission with respect to the Registration Statement or any amendment
thereto and as promptly as possible provide the holders of Registrable
Securities true and complete
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copies of all correspondence from and to the Commission relating to the
Registration Statement; and (iv) comply in all material respects with
the provisions of the Securities Act and the Securities and Exchange
Act of 1934 with respect to the disposition of all Registrable
Securities covered by the Registration Statement during the applicable
period in accordance with the intended methods of disposition by the
holders thereof set forth in the Registration Statement as so amended
or in such prospectus as so supplemented.
ARTICLE 4
CONDITIONS TO CLOSING
Section 4.1 Conditions Precedent to the Obligation of the Company to Sell the
Shares. The obligation hereunder of the Company to proceed to close this
Agreement and to issue and sell the Shares to the Purchaser is subject to the
satisfaction or waiver, at or before the Closing, of each of the conditions set
forth below. These conditions are for the Company's sole benefit and may be
waived by the Company at any time in its sole discretion.
(a) Accuracy of the Purchaser's Representations and Warranties. The
representations and warranties of the Purchaser shall be true and
correct in all material respects as of the date when made and as of the
Closing as though made at that time, except for representations and
warranties that speak as of a particular date.
(b) Performance by the Purchaser. The Purchaser shall have performed,
satisfied and complied in all material respects with all material
covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Purchaser at or prior to
the Closing.
(c) No Injunction. No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of any of the
transactions contemplated by this Agreement.
Section 4.2 Conditions Precedent to the Obligation of the Purchaser to Close.
The obligation hereunder of the Purchaser to perform its obligations under this
Agreement and to purchase the Shares is subject to the satisfaction or waiver,
at or before the Closing, of each of the conditions set forth below. These
conditions are for the Purchaser's sole benefit and may be waived by the
Purchaser at any time in its sole discretion.
(a) Accuracy of the Company's Representations and Warranties. Each of the
representations and warranties of the Company shall be true and correct
in all material respects as of the date when made and as of the Closing
as though made at that time (except for representations and warranties
that speak as of a particular date).
(b) Performance by the Company. The Company shall have performed, satisfied
and complied in all respects with all covenants, agreements and
conditions required by this Agreement to be performed, satisfied or
complied with by the Company at or prior to the Closing.
(c) No Injunction. No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of any of the
transactions contemplated by this Agreement.
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ARTICLE 5
INDEMNIFICATION
Section 5.1 General Indemnity.
(a) The Company agrees to indemnify and hold harmless the Purchaser and
each person, if any, who controls the Purchaser within the meaning of
the Securities Act (Distributing Purchaser) against any losses, claims,
damages or liabilities, joint or several (which shall, for all purposes
of this Agreement, include, but not be limited to, all reasonable costs
of defense and investigation and all reasonable attorneys' fees), to
which the Distributing Purchaser may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, or any related
preliminary prospectus, the Prospectus or amendment or supplement
thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein in light of the
circumstances when made not misleading; provided, however, that the
company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission.or alleged
omission made in the Registration Statement, preliminary prospectus,
the Prospectus or amendment or supplement thereto in reliance upon, and
in conformity with, written information fumished to the Company by the
Distributing Purchaser specifically for use in the preparation thereof
This Section 5(a) shall not inure to the benefit of any Distributing
Purchaser with respect to any person asserting such loss, claim, damage
or liability who purchased the Registrable Securities which are the
subject thereof if the Distributing Purchaser fitiled to send or give a
copy ofthe Prospectus to such person at or prior to the written
confirmation to such person of the sale of such Registrable Securities,
where the Distributing Purchaser was obligated to do so under the
Securities Act or the rules and regulations promulgated thereunder.
This indemnity agreement will be in addition to any liability the
Company may otherwise have.
(b) Each Distributing Purchaser agrees that it will indemnify and hold
harmless the company, and each officer, director of the Company or
person, if any, who controls the company within the meaning of the
Securities Act, against any losses, claims, damages or liabilities
(which shall, for all purposes of this Agreement, include, but not be
limited to, all reasonable costs of defense and investigation and all
reasonable attorney fees) to which the company or any such officer,
director or controlling person may become subject under the Securities
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, or any related
preliminary prospectus, the Prospectus or amendment or supplement
thereto, or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, but in each
case only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, preliminary prospectus, the Prospectus or amendment or
supplement thereto in reliance upon, and in conformity with, written
information furnished to the Company by such Distributing Purchaser
specifically for use in the preparation thereof. This indemnity
agreement will be in addition to any liability, which the Distributing
Purchase may otherwise have. Notwithstanding anything to the contrary
herein, the Distributing Purchaser shall not be liable under this
Section 5(b) for any amount in excess of the net proceeds to such
Distributing Purchaser as a result of the sale of registrable
securities pursuant to the Registration Statement.
(c) Promptly after receipt by an indemnified party under this Section 5 of
notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying
party under this Section 5, notify the indemnifying party of the
commencement thereof, but the omission so to notify the indemnifying
party will not relieve the indemnified party from any liability which
it may have to any indemnified party except to the extent of actual
material prejudice demonstrated by the indemnified party. In case any
such action is brought against any indemnified party, and it notifies
the indemnifying party of the commencement thereof the indemnifying
party will be entitled to participate in, and to the extent that it may
wish, jointly with any other indemnified party similarly notified,
assume the defense thereof subject to the provisions herein stated and
after notice rom the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party
will not be liable to such indemnified party under this Section 5 for
any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof other than reasonable
costs of investigation, unless the indemnifying party shall not pursue
the action to its final conclusion. The indemnified party shall have
the right to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and expenses of such
counsel shall not be at the expense of the indemnifying party if
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the indemnifying party has assumed the defense of the action with
counsel reasonably satisfactory to the indemnified party; provided that
if the indemnified party is the Distributing Purchaser, the fees and
expenses of such counsel shall be at the expense of the indemnifying
party if (i) the employment of such counsel has been specifically
authorized in writing by the indemnifying party, or (ii) the named
parties to any such action (including any impleaded parties) include
both the Distributing Purchaser and the indemnifying party and the
Distributing Purchaser shall have been advised by such counsel in
writing that there may be one or more legal defenses available to the
indemnifying party different from or in conflict with any legal
defenses which may be available to the Distributing Purchaser (in which
case the indemnifying party shall not have the right to assume the
defense of such action on behalf of the Distributing Purchaser, it
being understood, however, that the indemnifying party shall, in
connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances, be liable only for the
reasonable fees and expenses of one separate firm of attorneys for the
Distributing Purchaser, which firm shall be designed in writing by the
Distributing Purchaser and be approved by the indemnifying party). No
settlement of any action against an indemnified party shall be made
without the prior written consent of the indemnified party, which
consent shall not be unreasonably withheld.
All fees and expenses of the indemnified party (including reasonable costs of
defense and investigation in a manner not inconsistent with this Section and all
reasonable attorneys' fees and expenses) shall be promptly paid to the
indemnified party, as incurred; provided, that the indemnifying party may
require such indemnified party to undertake to reimburse all such fees and
expenses to the extent it is finally judicially determined that such indemnified
party is not entitled to indemnification hereunder.
ARTICLE 6
MISCELLANEOUS
Section 6.1 Fees and Expenses. Each of the parties to this Agreement shall pay
its own fees and expenses related to the transactions contemplated by this
Agreement.
Section 6.2 Entire Agreement; Amendment. This Agreement contains the entire
understanding of the parties with respect to the matters covered herein. No
provision of this Agreement may be waived or amended other than by a written
instrument signed by the party against whom enforcement of any such amendment or
waiver is sought.
Section 6.3 Notices. Any notice, demand, request, waiver or other communication
required or permitted to be given hereunder shall be in writing and shall be
effective (a) upon hand delivery or facsimile at the address or number
designated below (if delivered on a business day during normal business hours
where such notice is to be received), or the first business day following such
delivery (if delivered other than on a business day during normal business hours
where such notice is to be received) or (b) on the second business day following
the date of mailing by express courier service, fully prepaid, addressed to such
address, or upon actual receipt of such mailing, whichever shall first occur.
The addresses for such communications shall be:
If to the Company: 000 Xxxxxxxxxx Xxxxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
If to Purchaser:
Xxx Xxxxxx
Fax (000-000-0000)
Any party hereto may from time to time change its address for notices by giving
written notice of such changed address to the other party hereto in accordance
herewith.
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Section 6.4 Waivers. No waiver by either party of any default with respect to
any provision, condition or requirement of this Agreement shall be deemed to be
a continuing waiver in the future or a waiver of any other provisions, condition
or requirement hereof, nor shall any delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such right accruing
to it thereafter.
Section 6.5 Headings. The article, section and subsection headings in this
Agreement are for convenience only and shall not constitute a part of this
Agreement for any other purpose and shall not be deemed to limit or affect any
of the provisions hereof
Section 6.6 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and assigns. The
parties hereto may not amend this Agreement or any rights or obligations
hereunder without the prior written consent of the Company and the Purchaser.
Section 6.7 No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any other person hereof enforce
any provision.
Section 6.8 Governing Law/Arbitration. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Florida, without
giving effect to the choice of law provisions.
Section 6.9 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and shall become effective when counterparts have been signed by each
party and delivered to the other
Section 6.10 Publicity. Neither the Company nor the Purchaser shall issue any
press release or otherwise make any public statement or announcement with
request to this Agreement until the closing. After the closing, the Company may
issue a press release, or otherwise make a public statement or announcement with
respect to this agreement and/or transaction.
Section 6.11 Further Assurances. From and after the date of this Agreement, upon
the request of the Purchaser or the Company, each of the Company or and the
Purchaser shall execute and deliver such instruments, documents and other
writings as maybe reasonably necessary or desirable to confirm and carry out and
to effectuate fully the intent and purpose of this agreement.
Section 6.12 Effectiveness of Agreement. This agreement shall become only
effective only upon satisfaction of the conditions precedent to the Closing.
DEFINITIONS
Section 7.1 Certain Definitions.
(a) Common Stock shall mean the Company's common stock, $0.001 par value
per share.
(b) Exchange Act shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated there under.
(c) GAAP shall mean the United States Generally Accepted Accounting
Principles as the Financial Accounting Standards Board and its
predecessor agencies determine those conventions, rules and procedures.
(d) Material Adverse Effect shall mean any adverse effect on the business,
operations, properties, or financial condition of the Company that is
material and adverse to the Company and its subsidiaries and
affiliates, taken as a whole and/or any condition, circumstance, or
situation that would prohibit or otherwise materially interfere with
the ability of the Company to perform any of its material obligations
under this Agreement or to perform its obligations
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under any other agreement which would be required to be filed with the
SEC as on an exhibit to a Registration Statement on Form S-1 or other
applicable form.
(e) SEC shall mean the Securities and Exchange Commission.
(f) SEC Documents shall mean the Company's latest Form 10-KSB as of the
time in question, all Forms I O-QS and 8-K filed thereafter, and the
Proxy Statement for its latest fiscal year as of the time in question.
(g) Securities Act shall mean the Securities and Exchange Act of 1934, as
amended, and the rules and regulations promulgated there under.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorize officer as of this 18t day of February
2002.
/s/ XXXX XXXXXXXXX /s/ XXXXXX X. XXXXXXX
------------------------------------ ------------------------------------
METROPOLITAN HEALTH NETWORKS, INC Xxxxxx Xxxxxxx
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