Back to Form 10-Q [form10-q.htm]
Exhibit 10.12
 

Exhibit C

 
NON-NEGOTIABLE PROMISSORY NOTE
 
 

$35,000,000.00    May 5, 2011

 
                                                                                                                
FOR VALUE RECEIVED, the undersigned, WellCare Health Plans, Inc., a Delaware
corporation whose corporate offices are located at 8735 Henderson Road,
Renaissance 1, Tampa, Florida 33634 (the "Maker"), hereby promises to pay to an
Escrow Agent to be designated by Lead Counsel on behalf of Lead Plaintiffs (the
"Payee"), the principal sum of thirty-five million dollars ($35,000,000.00), in
accordance with the terms and provisions of this Promissory Note (the "Note").
 
1. Purpose of This Note; Defined Terms. This Note is executed and delivered
pursuant to the terms of a Stipulation and Agreement of Settlement (the
"Stipulation") filed in the case of Eastwood Enterprises, LLC v. Farha, et al.,
pending in the United States District Court for the Middle District of Florida,
Tampa Division (Case No. 8:07-cv-1940-VMC-EAJ). All capitalized terms herein
shall have the same meaning as set forth in the Stipulation unless otherwise
defined herein.

 
2. Due Date. The outstanding principal balance of this Note shall be due and
payable in full on July 31, 2011 (the "Due Date"). On or before July 28, 2011,
Lead Counsel shall designate to Maker the specific Escrow Agent and Escrow
Account to which payment is to be made. This Note may be prepaid without penalty
or interest.

 
(a)  Default. The occurrence of any one or more of the following events or
conditions (each an "Event of Default") constitutes a default hereunder:

 

  (i) 
the Maker's failure to make payment in full on or before the Due Date.
 
  (ii) the Maker's insolvency, general assignment for the benefit of creditors,
or the commencement by or against the Maker of any case, proceeding, or other
action seeking reorganization, arrangement, adjustment, liquidation,
dissolution, or composition of the Maker's debts under any law relating to
bankruptcy, insolvency, or reorganization, or relief of debtors, or seeking
appointment of a receiver, trustee, custodian, or other similar official for the
Maker or for all or any substantial part of the Maker's assets which, in the
case of involuntary proceedings, has not been withdrawn or dismissed within 60
days after the filing thereof.

 
                              (b) If an Event of Default shall occur, the entire
unpaid principal amount of this Note shall accelerate and become immediately due
and payable without presentment, demand, protest, or notice of any kind
whatsoever including, but not limited to, notice of dishonor, nonpayment, and
maturity, all of which are hereby expressly waived, and interest thereon shall

 
 

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accrue at the rate and pursuant to the method set forth in 28 USC §1961 until
all sums due are paid.

 
3. Maker's Representations and Warranties. The Maker hereby represents and
warrants on the date hereof that:

 
(a) the Maker is not subject to regulation under any law or to any restriction
under its organizational documents or under any contract to which the Maker is a
party, breach of which would have a material adverse effect on the Maker, that
limits the Maker's ability to incur indebtedness under this Note.
 
                   4. Maker's Waivers and Consents.

                              (a) The Maker hereby assents to any indulgence or
any extension of the time for payment granted or permitted by the Payee.

                              (b) The Maker hereby waives presentment, demand,
protest, and notice of any kind whatsoever in connection with the delivery,
acceptance, performance, and enforcement of this Note.

                              (c) THE OBLIGATIONS OF THE MAKER TO PAY PRINCIPAL
AND INTEREST AS PROVIDED IN THIS NOTE ARE ABSOLUTE AND UNCONDITIONAL, AND ARE
(I) NOT SUBJECT TO ANY DEFENSE OR ANY RIGHT OF SET-OFF, RECOUPMENT, COUNTERCLAIM
OR DEDUCTION OF ANY KIND WHICH MAY OTHERWISE BE AVAILABLE TO THE MAKER AND (II)
WITHOUT ANY RIGHT OF SUSPENSION, DEFERMENT, OR REDUCTION THE MAKER MIGHT
OTHERWISE HAVE AT LAW OR IN EQUITY AGAINST THE CLASS OR ANY CLASS MEMBER, THE
PAYEE OR ANY OTHER HOLDER OF THIS NOTE. THE MAKER HEREBY WAIVES THE RIGHT TO
ASSERT ANY SUCH DEFENSE (OTHER THAN ACTUAL PAYMENT OF THIS NOTE) OR OTHER RIGHT
IN ANY ACTION OR PROCEEDING TO ENFORCE THIS NOTE.
 
5. Successors and Assigns. This Note shall be binding upon and inure to the
benefit of the parties hereto and their respective successors. Neither the Maker
nor the Payee may, without the prior written consent of the other party, assign
any right, duty or obligation hereunder. Payee may not negotiate this Note
without the prior written consent of the Maker.

 
6. Voidable Event. This Note shall terminate and be rendered void and
unenforceable if the Stipulation is terminated pursuant to its terms.

 
7. Governing Law. The provisions of this Note shall be governed and construed
according to the laws of Florida.
 
8. JURISDICTION; WAIVER OF JURY TRIAL. ANY PROCEEDING SEEKING TO ENFORCE ANY
PROVISION OF, OR BASED ON ANY MATTER ARISING OUT OF OR IN CONNECTION WITH, THIS
NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE BROUGHT AND DETERMINED
UPON WRITTEN APPLICATION TO THE COURT IN THE ACTION, PURSUANT TO THE CONTINUING
JURISDICTION

 
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OF THE COURT AS SET FORTH IN THE JUDGMENT, AND IN NO OTHER FORUM. THE PARTIES
HERETO HEREBY CONSENT TO THE JURISDICTION OF SUCH COURT AND IRREVOCABLY WAIVE,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THEY MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING IN SUCH COURT.
PURSUANT TO THE CONTINUING JURISDICTION OF THE COURT, ANY SUCH PROCEEDING MAY BE
BROUGHT BEFORE THE COURT BY NOTICE OF MOTION SERVED IN ACCORDANCE WITH THE
FEDERAL RULES OF CIVIL PROCEDURE AND THE LOCAL RULES OF PRACTICE OR IN SUCH
OTHER MANNER AND WITHIN SUCH OTHER TIME PERIODS AS THE COURT MAY DIRECT. BOTH
PARTIES HERETO HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS NOTE OR THE TRANSACTIONS
CONTEMPLATED HEREBY. LEAD PLAINTIFFS SHALL HAVE THE RIGHT TO BRING ANY SUCH
PROCEEDING ON BEHALF OF, AND FOR THE BENEFIT OF, THE CLASS.

 
                   9. Notices.
 
                              (a) All notices hereunder shall be in writing and
shall either be hand delivered, with receipt therefor, or sent by FedEx or
similar overnight courier, with receipt therefor, or by certified or registered
mail, postage prepaid, return receipt requested, as follows:
 

   If to Maker: WellCare Health Plans, Inc.
8735 Henderson Road
Renaissance 1, 3rd Floor
Tampa, FL 33634
Attn: John Richter
            With copy to:    
Hogan Lovells US LLP
555 13th Street, NW
Washington, DC 20004
Attn: George H. Mernick, III, Esq.
            If to Payee:  Bernstein Litowitz Berger & Grossmann LLP
1285 Avenue of the Americas
New York, New York 10019
Attn: Steven B. Singer, Esq.
 
AND

 
Labaton Sucharow LLP
140 Broadway, 34th Floor
New York, New York 10005
Attn: Thomas Dubbs, Esq.
 

                       

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Notices shall be effective when received; provided, however, that if any notice
sent by overnight courier or by certified or registered mail is returned as
undeliverable, such notice shall be deemed effective when mailed or given to
such courier.

                              (b) Any of the foregoing entities may change the
address to which notices are to be delivered to it hereunder by giving written
notice to the others as provided in this paragraph.
 
10. Severability. In the event that any one or more of the provisions of this
Note shall for any reason be held to be invalid, illegal, or unenforceable in
any respect, such invalidity, illegality, or unenforceability shall not affect
any other provision of this Note, and this Note shall be construed as if such
invalid, illegal, or unenforceable provision had never been contained herein.
 
IN WITNESS WHEREOF, Maker has executed this Note on this 5th day of May 2011.   
 

     
MAKER:
 
WellCare Health Plans, Inc.
 
 
 
 
 
 
By: /s/ Thomas Tran                                             
Name: Thomas Tran
Title: Chief Financial Officer
 
 

 
 
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