exv4w1





Exhibit
4.1


CREDIT FACILITY AGREEMENT




among




CONTINUCARE CORPORATION,

as a Borrower




CONTINUCARE MDHC, LLC,

as a Borrower




and




BANK OF AMERICA, N.A.,

as Bank




dated as of December 18, 2009




 









 





CREDIT FACILITY AGREEMENT

Dated as of December 18, 2009




     This Credit Facility Agreement (“Agreement”) is made and entered into as of the date set forth
above by and between CONTINUCARE CORPORATION, a Florida corporation (“CNU”), CONTINUCARE MDHC, LLC,
a Florida limited liability company (“MDHC”, and CNU and MDHC each sometimes referred to herein as
a “Borrower” and collectively as “Borrowers”) and BANK OF AMERICA N.A., a national bank (“Bank”).



RECITALS




     A. CNU and MDHC have asked the Bank to furnish separate revolving credit facilities to them to
refinance and satisfy their respective obligations to Merrill Lynch Commercial Finance Corp., and
for short term working capital requirements and general corporate purposes, for the repurchase of
CNU’s common stock and for the purpose of enabling CNU, directly and indirectly, to engage in
acquisitions of other companies and business assets. The Bank is willing to furnish such credit
facilities on the terms and conditions set forth in this Agreement.



     B. It is a condition to the Bank’s furnishing of the credit facilities that CNU, MDHC and
certain of CNU’s other material Subsidiaries shall have executed and delivered one or more of this
Agreement together with a Security Agreement and other Loan Documents as defined herein.



     C. In order to satisfy the foregoing conditions, CNU, MDHC and certain of their Subsidiaries
desire to execute and deliver the Loan Documents (as hereinafter defined).



     NOW THEREFORE, in consideration of the foregoing agreed upon facts and recitals, and in
consideration of the premises and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:



§1. DEFINITIONS.




     §1.1 Capitalized Terms. When used herein, each capitalized term listed below shall
have the meaning indicated below:



     “Account” shall have the meaning as defined in the Florida Uniform Commercial Code.



     “Administrative Borrower” shall mean CNU.



     “Adjusted Tangible Net Worth” shall mean Tangible Net Worth plus an amount equal to
the lesser of: (a) the total amount of share repurchases made by the CNU, plus goodwill
attributable to acquisitions made after the date of this Agreement; and (b) $5,000,000.



     “Advance” shall mean any drawing by a Borrower under either of the Notes and this
Agreement.



 









 





     “Affiliate” shall mean any Person controlling, controlled by or under common control
with any other Person. For purposes of this definition, “control” (including “controlled by” and
“under common control with”) means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether through the ownership
of voting securities or otherwise.



     “Agreement” shall mean this Agreement, as amended from time to time.



     “Anti-Terrorism and Anti-Money Laundering Laws” shall mean (a) all applicable laws,
regulations, executive orders and government guidance on the prevention and detection of money
laundering (including 18 U.S.C. §§ 1956 and 1957), drug trafficking, terrorist-related activities,
or financial or other fraud; (b) the Bank Secrecy Act (31 U.S.C. §§ 5311 et seq. and 12 U.S.C.
§§1818(s), 1829(b) and 1951-1959) and its implementing regulations, and (c) all regulations and any
other requirements of any governmental authority (including, without limitation, the United States
Department of the Treasury Office of Foreign Assets Control) addressing, relating to, or attempting
to eliminate drug trafficking, terrorist acts and acts of war.



     “Authorized Representative” shall mean the chief financial officer of CNU or MDHC, or
any other officer expressly designated by CNU or MDHC as an Authorized Representative of such
party.



     “Business Day” shall mean a day (other than a Saturday) on which most banks are open
for general commercial business in Miami, Florida U.S.A. (“day” as used herein, means a calendar
day).



     “Change of Control” means: (a) an event or series of events by which any “person” or
“group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended), other than Dr. Phillip Frost, his spouse or one or more Persons which are, or which
are owned or controlled by, Dr. Phillip Frost and/or his spouse or any of their heirs or immediate
family members, becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, as amended, provided that a person shall be deemed to have
“beneficial ownership” of all securities that such person has the right to acquire, whether such
right is exercisable immediately or within thirty (30) days), directly or indirectly, of more than
fifty percent (50%) of the combined voting power of CNU’s outstanding common stock ordinarily
having the right to vote at an election of directors; or (b) the majority of the board of directors
or comparable governing body of CNU fails to consist of Continuing Directors; in each case, without
the prior written consent of the Bank (which consent shall not be unreasonably withheld).



     “CNU Note” shall mean the $4,629,630.00 revolving promissory note from CNU in favor of
Bank and any modification, renewal or consolidation thereof as substitute therefor.



     “Collateral” shall mean all of any Obligor’s Accounts, Inventory, FF&E, General
Intangibles, Negotiable Collateral, Deposits and Securities and the property encumbered by the
Mortgage (as such terms are defined in the Florida Uniform Commercial Code and the Security
Agreement), and all other Collateral as defined in the Security Agreement and any Interest Rate
Protection Agreements.



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     “Commitment Amount” shall mean the Facility A Commitment Amount or the Facility B
Commitment Amount, as the context may require.



     “Continuing Directors” means, with respect to any person as of any date of
determination, any member of the board of directors or equivalent governing body of such Person who
(a) was a member of such board of directors or governing body on the date of this Agreement, or (b)
was nominated for election or elected to such board of directors or governing body with the
approval of the required majority of the Continuing Directors who were members of such board at the
time of such nomination or election.



     “Debt” shall mean any of the following: (i) indebtedness or liability for borrowed
money, (ii) obligations evidenced by bonds, notes, or other similar instruments, (iii) obligations
for the deferred purchase price of property or services, but excluding trade payables, (iv)
obligations as lessee under capital leases, (v) all guarantees, endorsements (other than for
collection or deposit in the ordinary course of business) and other contingent obligations to
purchase, to provide funds for payment, or otherwise to assure creditors against loss, (vi)
obligations under letters of credit but excluding cash secured letter of credit obligations not
exceeding $500,000 in the aggregate, (vii) earn out obligations but excluding subordinated earn out
obligations not exceeding $1,000,000 in the aggregate at any time (the term “subordinated earn out
obligations” shall mean that the earn out obligation shall not be payable if there exists an
uncured Event of Default under this Loan or if payment of the earn out obligation would cause a
default under this Loan ), and (viii) obligations secured by any mortgage, lien, pledge or security
interest or other charge or encumbrance on property, whether or not the obligations have been
assumed.



     “Default Rate” shall mean a fluctuating rate of interest which is two percent (2%) in
excess of the interest rate otherwise applicable from time to time under the Note.



     “Dollars” and “$” shall mean United States of America Dollars.



     “EBITDA” means net income, less income or plus loss from discontinued operations and
extraordinary items, plus income taxes, plus interest expense, plus depreciation, depletion, and
amortization and other non-cash charges and expenses (including, but not limited to, in respect of
stock or other equity-based compensation expense).



     “Event of Default” shall have the meaning given it in §6.1.



     “Existing Letters of Credit” shall mean each of the letters of credit issued by the
Bank as of the date hereof for the account of either Borrower.



     “Facility A Commitment Amount” shall mean Four Million, Six Hundred Twenty-Nine
Thousand, Six Hundred Thirty and No/100 ($4,629,630.00) Dollars.



     “Facility B Commitment Amount” shall mean Five Million, Three Hundred Seventy
Thousand, Three Hundred Seventy and No/100 ($5,370,370.00) Dollars.



     “FF&E” shall mean all of Obligors’ furnishings, furniture and equipment.



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     “Fixed Charge Coverage Ratio” means the ratio of (a) the sum of EBITDA plus lease
expense, and rent expense minus capital expenditures, to (b) the sum of (i) interest expense, lease
expense, rent expense, (ii) the current portion of long term debt (excluding amounts due under this
Loan), (iii) the current portion of capitalized lease obligations and cash tax payments, and (iv)
20% of the outstanding balance of the Loan (in the case of items (ii), (iii) and (iv) above,
measured as of the date of determination).



     “GAAP” or “Generally Accepted Accounting Principles” means generally accepted
accounting principles, being those principles of accounting set forth in pronouncements of the
Financial Accounting Standards Board, the American Institute of Certified Public Accountants or
which have other substantial authoritative support and are applicable in the circumstances as of
the date of a report.



     “Guaranty” shall mean a guaranty in substantially the form of Exhibit “A” attached
hereto.



     “Intangible Assets” shall mean the total amount of goodwill, patents, trade names,
trade or service marks, copyrights, experimental expense, organization expense, unamortized debt
discount and expense, the excess of cost of shares acquired over book value of related assets, and
such other assets as are properly classified as “intangible assets” of any Obligor determined in
accordance with GAAP.



     “Interest Rate Protection Agreement” shall mean any agreement between CNU and Bank or
any affiliate of Bank now existing or hereafter entered into, which provides for an interest rate,
credit, commodity or equity swap, cap, floor, collar, forward foreign exchange transaction,
currency swap, cross-currency rate swap, currency option, or any similar transaction or any
combination of, or option with respect to, these or similar transactions, for the purpose of
hedging Borrower’s exposure to fluctuations in interest or exchange rates, loan, credit, exchange,
security or currency valuations or commodity prices, including a swap agreement (as defined in 11
U.S.C. 101) evidenced by an ISDA Master Agreement and Schedules.



     “Inventory” shall have the meaning as defined in the Florida Uniform Commercial Code.



     “Letter of Credit” shall mean (a) any standby letter of credit issued by the Bank
pursuant to the terms hereof, as such standby letter of credit may be amended, modified, restated,
extended, renewed, increased, replaced or supplemented from time to time and (b) any Existing
Letter of Credit, as such letter of credit may be amended, modified, restated, extended, renewed,
increased, replaced or supplemented from time to time.



     “LIBOR Daily Floating Rate” means, for any applicable interest period, the rate per
annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters
(or other commercially available source providing quotations of BBA LIBOR as selected by the Bank
from time to time) as determined for each banking day at approximately 11:00 a.m. London time two
(2) London Banking Days prior to the date in question, for U.S. Dollar deposits (for delivery on
the first day of such interest period) with a one month term. If such rate is not available at such
time for any reason, then the rate for that interest period will be determined by



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such alternate method as reasonably selected by the Bank. A “London Banking Day” is a day on
which banks in London are open for business and dealing in offshore dollars.




     “Loan” shall mean the Loan under this Agreement.



     “Loan Documents” shall mean the Notes, the Security Agreement, the Mortgage, the
Mortgage Modification, this Agreement, any Guaranty agreements, UCC-1 Financing Statements, any
Interest Rate Protection Agreements, landlord lien waivers, and all other documents signed by any
Obligor in favor of Bank in connection with the Loan.



     “LOC Documents” shall mean, with respect to each Letter of Credit, such Letter of
Credit, any amendments thereto, any documents delivered in connection therewith, any application
therefor (which the Issuing Lenders agree shall be on terms consistent with this Agreement and the
other Loan Documents), and any agreements, instruments, guarantees or other documents delivered by
any Borrower (whether general in application or applicable only to such Letter of Credit) governing
or providing for (a) the rights and obligations of the parties concerned or (b) any Collateral for
such obligations.



     “Managed Care Agreements” shall mean a contract between any Obligor and a health
maintenance organization.



     “Material Adverse Change” shall mean any change in CNU’s and its Subsidiaries’ (taken
as a whole) assets, properties or financial condition, taken as a whole, which would materially and
adversely jeopardize the ability of the Obligors (taken as a whole) to make payment as and when due
of all or any part of its obligations under the Loan Documents.



     “MDHC Note” shall mean the $5,370,370 revolving promissory note from MDHC in favor of
Bank and any modification, renewal, or consolidation thereof or substitute therefor.



     “Mortgage” shall mean that certain Mortgage and Assignment of Leases executed by MDHC
as security for the Loan, encumbering property owned by MDHC at 3233 Palm Avenue, Hialeah, Florida
33012.



     “Mortgage Modification” shall mean that certain Mortgage Modification Agreement
between MDHC and Bank of even date herewith.



     “Notes” shall mean the CNU Note and the MDHC Note.



     “Obligations” shall mean all indebtedness, liabilities and obligations of the
Borrowers under the Notes and this Agreement and the Loan Documents, including obligations of CNU
under any Interest Rate Protection Agreements, direct or indirect, absolute or contingent, due or
not due, in contract or tort, liquidated or unliquidated, arising by operation of law or otherwise,
now existing or hereafter arising, and whether or not for the payment of money or the performance
or non-performance of any act, including, but not limited to, all damages which the Obligors may
owe to the Bank by reason of any breach by the Obligors of any representation, warranty, covenant,
agreement or other provision of this Agreement or any of the other Loan Documents.



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     “Obligors” shall mean each of CNU, MDHC and any other Subsidiary of CNU that executes
and delivers to Bank a Guaranty.



     “Permitted Debt” shall mean:




     (i) the Obligations and any guaranty thereof;




     (ii) Debt existing on the date of this Agreement and any refinancing thereof provided
that the amount of the refinanced Debt does not exceed the principal amount of such existing
debt as of the date of this Agreement;




     (iii) Debt in respect of obligations secured by Permitted Liens;




     (iv) Guarantees of obligations of CNU and its Subsidiaries of obligations not
prohibited by this Agreement;




     (v) Debt arising from intercompany loans and advances (a) from any Subsidiary of CNU to
CNU or to any other Obligor, or (b) from CNU to any other Obligor; provided, that
such Debt shall be expressly subordinate to the payment in full of the Obligations;




     (vi) purchase money Debt (including, without limitation, capitalized Leases) incurred
by any Obligor from the Bank or any Affiliate of the Bank;




     (vii) Debt with respect to surety, appeal and performance bonds obtained by the
Borrower or any of its Subsidiaries in the ordinary course of business;




     (viii) Debt incurred by any Obligor (whether or not assumed) in any acquisition as part
of the consideration therefor, provided that (a) such Debt is unsecured and is
subordinated to the Obligations on terms reasonably acceptable to the Bank, and (b) such
Debt was not created in contemplation of such acquisition;




     (ix) Debt in respect of Interest Rate Protection Agreements; and




     (x) additional Debt in an aggregate amount at any time outstanding not exceeding
$500,000.



     “Permitted Liens” shall mean with respect to the Collateral:




     (i) liens for taxes and other governmental charges not yet due and payable, other liens
imposed by law arising in the ordinary course of business for sums not due, and, if Bank’s
rights to and interest in the Collateral are not materially and adversely affected thereby,
any such liens for taxes and other governmental charges or other lien arising in the
ordinary course of business being contested in good faith by appropriate proceedings;




     (ii) liens in favor of Bank or any Affiliate of the Bank;



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     (iii) liens which will be discharged with the proceeds of the initial Advances of the
Loan;




     (iv) Liens securing Debt permitted under clauses (ii) and (x) of the definition of
“Permitted Debt” contained herein and Liens on cash securing letter of credit obligations
not exceeding $500,000 in the aggregate;




     (v) Title matters shown on the title insurance commitment insuring the Mortgage,
provided such matters are acceptable to Bank;




     (vi) liens incurred or deposits made in the ordinary course of business in connection
with workers’ compensation, unemployment insurance or other types of social security
benefits or secure the performance of bids, tenders, sales, contracts, surety, appeal and
performance bonds;




     (vii) Liens of attachment or judgment with respect to judgments, writs or warrants of
attachment, or similar process against any Obligor which do not constitute a Default under
Section 6.1(f) hereof;




     (viii) any interest or title of the lessor in the property subject to any operating
lease entered into by any Obligor in the ordinary course of business; and




     (ix) other liens expressly permitted in writing by Bank.



     “Person” shall mean an individual, corporation, partnership, association, trust or
unincorporated organization or a government or any agency or political subdivision thereof.



     “Security Agreement” shall mean that certain Security Agreement dated as of even date
herewith from the Obligors for the benefit of the Bank, as the same may be amended, modified or
supplemented from time to time. The Security Agreement shall secure all of the Obligations.



     “Security Documents” shall mean the Security Agreement, the Mortgage, all UCC-1
Financing Statements, and all the documents executed by Obligors for the purpose of creating
security interests in the collateral as security for the Obligations.



     “Subsidiary” shall mean an entity in which CNU, directly or indirectly, owns more than
fifty percent (50%) of the stock, capital, or income interests, or other beneficial interests, or
which is effectively controlled directly or indirectly, by CNU, including, without limitation,
Seredor Corporation.



     “Tangible Net Worth” shall mean CNU’s consolidated net worth as shown on CNU’s
consolidated quarterly (or annual) financial statements prepared in accordance with GAAP, but
excluding an amount equal to: (i) any intangible assets, and (ii) any amounts now or hereafter
directly or indirectly owing to any Obligor by officers, shareholders or affiliates of any Obligor.



     “Termination Date” shall mean the earlier of (i) January 31, 2012 and (ii) the date of
termination of the Bank’s commitment to make Advances upon the occurrence of an Event of Default
hereunder.



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     “United States” shall mean the United States of America.



     §1.2 Accounting Matters. Unless otherwise specified herein, all accounting
determinations hereunder and all computations utilized by CNU in complying with the covenants
contained herein shall be made, all accounting terms used herein shall be interpreted, and all
financial statements requested to be delivered hereunder shall be prepared, in accordance with
GAAP; provided that, until four (4) complete fiscal quarters have elapsed after the consummation by
CNU or any of its Subsidiaries of the acquisition of any business, the calculation of all income
statement and cash flow items as to such acquired business shall be determined on a pro forma basis
by annualizing the most recent quarterly or semi-annual or trailing three quarters financial
results from date of the acquisition.



     §1.3 Number; Sections and Articles. Each use of a singular pronoun herein shall be
deemed to include a reference to the plural variation thereof, and vice versa, in each case as the
context may permit or require. Any reference to any article, section or exhibit shall mean,
respectively, the appropriate article, section or exhibit of this Agreement unless there is a
specific reference to an article, section or exhibit of another document.



§2. REVOLVING LOAN.




     §2.1 Commitment.



          (a) Facility A. Bank agrees, on the terms and conditions hereinafter set forth, to
make Advances to CNU and to issue standby Letters of Credit for the account of CNU from time to
time during the period from the date hereof to and including one day prior to the Termination Date
up to the Facility A Commitment Amount. Within the limits of the Bank’s commitment set forth
herein below, CNU may borrow, repay and reborrow (or otherwise obtain additional Advances and
Letters of Credit) provided that the aggregate outstanding principal amount of the Advances under
Facility A, plus the aggregate face amount of all Letters of Credit under Facility A shall not
exceed the Facility A Commitment Amount.




          (b) Facility B. Bank agrees, on the terms and conditions hereinafter set forth, to
make Advances to MDHC and to issue standby Letters of Credit for the account of MDHC from time to
time during the period from the date hereof to and including one day prior to the Termination Date.
Within the limits of the Bank’s commitment set forth herein below, MDHC may borrow, repay and
reborrow (or otherwise obtain additional Advances and Letters of Credit) provided that the
aggregate outstanding principal amount of the Advances under Facility B plus the aggregate face
amount of all Letters of Credit under Facility B shall not exceed the Facility B Commitment Amount.




     §2.2 Uses of Advances. The Advances shall be used by Borrower to refinance and satisfy
all obligations owed by Borrowers to Merrill Lynch Commercial Finance Corp., for short term working
capital requirements and general corporate purposes, for the repurchase of CNU’s common stock, and
for acquisitions. Borrowers agree that under no circumstances will the proceeds of the Loan or any
Advance be used to purchase, carry or trade in “margin stock” (other than share repurchases by CNU)
within the meaning of Registration G, T, U or X issued by the



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Board of Governors of the Federal Reserve System, or repay debt of any Obligor incurred to
purchase, carry or trade in “margin stock.”



     §2.3 Advances. Any Borrower requesting an Advance shall give the Bank prior written
notice of each requested Advance or on or before noon of the date of the requested Advance. MDHC
authorizes Bank to accept notices of request for Advance from Administrative Borrower. Each such
notice shall specify the amount of the requested Advance and the Borrower’s intended use of the
funds. Notwithstanding anything herein to the contrary, if a Borrower has entered into an
autoborrow facility with Bank then the terms of the autoborrow facility shall prevail with respect
to that Borrower.



     §2.4 General Provisions as to Advances.



          (a) Limitation on Bank’s Duty. With respect to either Facility A or Facility B, the
Bank shall have no obligation to make any Advance or issue any Letters of Credit if (i) the
aggregate principal amount of Advances outstanding plus the aggregate face amount of all
outstanding Letters of Credit under such Facility shall equal or exceed the Commitment Amount for
such Facility at any time, or (ii) if Borrower is in default under this Agreement, or (iii) if the
issuance of such Advances or Letters of Credit would otherwise cause a violation of applicable law
or any regulatory directive, interpretation or request, to which the Bank is subject.




          (b) Obligations Absolute. The obligation of each Borrower to reimburse the Bank for
each Advance made to such Borrower shall be irrevocable, shall not be subject to any qualification
or exception whatsoever and shall be binding in accordance with the terms and conditions of this
Agreement under all circumstances, including, without limitation, the following circumstances:




               (i) any lack of validity or enforceability of this Agreement or any of the other Loan
Documents;



               (ii) the surrender or impairment of any security for the performance or observance of any of
the terms of this Agreement or the other Loan Documents;



               (iii) the occurrence or continuance of any Default or Event of Default.



     §2.5 Telephone and Telefax Authorization.



          (a) The Bank may honor telephone or telefax instructions for Advances or for the issuance of
Letters of Credit, or repayments given, or purported to be given, by any one of the Authorized
Representatives.




          (b) The Obligors hereby agree to indemnify and hold the Bank harmless from all liability,
loss, and costs in connection with any act resulting from telephone or telefax instructions the
Bank reasonably believes are made by any Authorized Representatives. This paragraph will survive
this Agreement’s termination, and will benefit the Bank and its officers, employees, and agents.




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     §2.6 Advances for Acquisitions. Borrower shall have the option to obtain Advances for
acquisitions by Borrower or by any Subsidiary of CNU of corporations or other entities which are in
the healthcare services line of business, and/or assets of such companies, subject to compliance
with the following requirements and conditions:



               (i) the aggregate purchase price for an acquisition shall not exceed $15,000,000;



               (ii) subject to compliance by Obligors with the terms of this Agreement, Advances shall be
available for acquisitions in amounts as follows:




          a. up to 100% of all acquisition costs up to but not exceeding $5,000,000; plus




          b. up to 60% of all acquisition costs in excess of $5,000,000;



               (iii) any financing of the acquisition other than the Loan shall be expressly subordinate to
the Loan, pursuant to a subordination agreement acceptable to Bank, and shall be subject to the
limitations of Section 5.3(c) of this Agreement; and



               (iv) Obligors must be in compliance with all financial covenants and other provisions of this
Agreement both prior to and immediately after giving effect to consummation of the acquisition.



               (v) if the acquired company is to be a Subsidiary or Affiliate, and not merged into CNU or
MDHC, the acquired company shall execute and deliver to Bank a guaranty of the Loan and a security
agreement in favor of Bank encumbering all assets.



     §2.7 Unused Commitment Fee.



          (a) Facility A. CNU agrees to pay a quarterly non-use fee in arrears on the
difference between the Facility A Commitment Amount and the average outstanding principal amount of
credit which CNU actually uses, determined on a quarterly basis by the average quarterly amount of
credit outstanding during each calendar quarter. For the fiscal year ending June 30, 2010 the fee
will be 37.5 basis points (0.375%) on the average unused Facility A Commitment Amount which shall
be payable quarterly in arrears on the last Business Day of December, 2009, and on the last
Business Day of March and June, 2010. For each fiscal year after June 30, 2010, the fee shall be
50 basis points, payable quarterly in arrears on the last Business Day of September, December,
March and June of each year until the expiration of the Loan. The calculation of credit outstanding
shall be done by Bank and shall include outstanding Letters of Credit. In the event that this
Agreement is terminated prior to the end of any calendar quarter of any year, the unused commitment
fee will be due as of the date of termination, and shall be calculated through and including, but
not after, the date of termination.




          (b) Facility B. MDHC agrees to pay a quarterly non-use fee in arrears on the
difference between the Facility B Commitment Amount and the average outstanding principal amount of
credit which MDHC actually uses, determined on a quarterly basis by the average quarterly amount of
credit outstanding during each calendar quarter. For the fiscal year ending


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June 30, 2010 the fee will be 37.5 basis points (0.375%) on the average unused Facility B
Commitment Amount which shall be payable quarterly in arrears on the last Business Day of December,
2009, and on the last Business Day of March and June, 2010. For each fiscal year after June 30,
2010, the fee shall be 50 basis points, payable quarterly in arrears on the last Business Day of
September, December, March and June of each year until the expiration of the Loan. The calculation
of credit outstanding shall be done by Bank and shall include outstanding Letters of Credit. In the
event that this Agreement is terminated prior to the end of any calendar quarter of any year, the
unused commitment fee will be due as of the date of termination, and shall be calculated through
and including, but not after, the date of termination.




     §2.8 Letters of Credit.



          (a) Subject to the terms and conditions hereof and of the LOC Documents, if any, and any other
terms and conditions which the Bank may reasonably require that are consistent with the terms of
this Agreement, during the term of this Agreement, Bank shall issue standby Letters of Credit for
the account of either Borrower from time to time upon request of such Borrower in a form acceptable
to the Bank; provided, however, that (i) the aggregate amount of all Letters of
Credit (including the drawn but unreimbursed amounts of Letters of Credit) shall not at any time
exceed Three Million Dollars ($3,000,000), (iii) all Letters of Credit shall be denominated in
United States Dollars and (iv) Letters of Credit shall be issued for any lawful corporate purposes
and shall be issued as standby letters of credit, including in connection with workers’
compensation and other insurance programs. Except as otherwise expressly agreed by the Bank, no
Letter of Credit shall have an original expiry date more than twelve (12) months from the date of
issuance; provided, however, so long as no Default or Event of Default has occurred
and is continuing and subject to the other terms and conditions to the issuance of Letters of
Credit hereunder, the expiry dates of Letters of Credit may be extended annually or periodically
from time to time on the request of the applicable Borrower or by operation of the terms of the
applicable Letter of Credit to a date not more than twelve (12) months from the date of extension.
In the event that the expiry date of any Letter of Credit is later than the Termination Date, then
not less than ninety (90) days prior to the Termination Date the applicable Borrower shall deliver
to Bank good funds equal to 100% of the Bank’s maximum liability under such Letter of Credit, to be
held as cash collateral for such Borrower’s reimbursement obligations thereto. Each Letter of
Credit shall comply with the related LOC Documents. The issuance and expiry date of each Letter of
Credit shall be a Business Day. The Existing Letters of Credit shall, as of the date of this
Agreement, be deemed to have been issued as Letters of Credit hereunder under Facility [___]
hereunder and subject to and governed by the terms of this Agreement.




          (b) As to all Letters of Credit, Borrowers agree that:




               (i) Upon the occurrence of an Event of Default, the applicable Borrower shall, on demand,
deliver to Bank good funds equal to 100% of Bank’s maximum liability under all outstanding Letters
of Credit issued for the account of such Borrower to be held as cash Collateral for such Borrower’s
reimbursement obligations.



               (ii) The Bank shall have right to automatically charge such Borrower’s account for applicable
fees, discounts, and other charges.



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               (iii) It will pay any reasonable, customary administrative charges that the Bank notifies such
Borrower will be charged for issuing and processing Letters of Credit for such Borrower. It will
pay the Bank a non-refundable fee equal to 1.50% per annum of the average daily maximum amount
available to be drawn under each standby letter of credit issued for such Borrower’s account,
payable quarterly in arrears, calculated on the basis of the face amount outstanding on the day the
fee is calculated. All other payments made by Bank under any such Letters of Credit (whether or
not Borrower is the account party or drawer) and all other fees, commissions, discounts and other
amounts owed or to be owed to Bank in connection therewith, shall be secured by the Collateral, and
shall be repaid on demand.



          (c) In the event of any conflict between this Agreement and any LOC Document (including any
letter of credit application and any LOC Documents relating to the Existing Letters of Credit),
this Agreement shall control.




          (d) Notwithstanding anything to the contrary set forth in this Agreement, including, without
limitation, Section 2.1, a Letter of Credit issued hereunder may contain a statement to the effect
that such Letter of Credit is issued for the account of a subsidiary of a Borrower;
provided that, notwithstanding such statement, the applicable Borrower shall be the actual
account party for all purposes of this Agreement for such Letter of Credit and such statement shall
not affect such Borrower’s reimbursement obligations hereunder with respect to such Letter of
Credit.




          (e) Unless otherwise expressly agreed by the Bank and the applicable Borrower, when a Letter
of Credit is issued, the rules of the “International Standby Practices 1998,” published by the
Institute of International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each standby Letter of Credit.




     §2.9 Loan Payments.



          (a) The indebtedness of each Borrower for Advances under the Loan and outstanding letter of
credit obligations shall be evidenced by the Notes executed by an Authorized Representative of each
Borrower. All Advances shall bear interest at the Libor Daily Floating Rate plus 2.40%, as the
Libor Daily Floating Rate may change on a daily basis. The terms and provisions of the Notes are
incorporated herein as if fully set forth in this Agreement and the executed Notes shall be deemed
a part of this Agreement for all purposes. All accrued interest shall be payable the first Business
Day of each month. The outstanding principal amount of all Obligations together with unpaid accrued
interest shall be paid in full on the Termination Date.




          (b) Each Borrower agrees that the Bank has authority to debit the amount due on the first
Business Day of each month from Borrower’s deposit account number as furnished to Bank, or such
other account with the Bank as designated by Borrowers in writing.




          (c) Each Borrower shall, on demand by the Bank, pay to the Bank interest on all sums
(including but without limitation any lawful default interest) not paid on their respective due
dates under this Agreement or under such Borrower’s Note (without taking into account any grace
periods in Section 6) from the due date up to the date of actual payment (as well after as



12









 






before judgment) at the Default Rate. In the case of a partial payment by a Borrower, the Bank
may appropriate such payment towards such of the obligations of such Borrower under this Agreement
as the Bank may decide. Each Borrower waives any right to make an appropriation in respect of a
partial payment. Any appropriation by the Bank shall apply to the exclusion of any actual or
purported appropriation by any Borrower. Save as otherwise provided in this Agreement, if any
payment would otherwise be due on a day which is not a Business Day, the next following Business
Day shall be substituted for such day.




          (d) The direct Obligations of CNU hereunder as to Facility A and under the Facility A Note are
several from the direct Obligations of MDHC hereunder as to Facility B and under the Facility B
Note.




     §2.10 Prepayment/Cancellation of Commitment.



          (a) CNU shall have the option to prepay Facility A in whole or in part without penalty. CNU
shall have the option to reduce the Facility A Commitment Amount in whole or in part without
penalty, provided that if CNU elects to terminate in full the Facility A Commitment hereunder, CNU
shall pay all monies owed to Bank under Facility A, including, without limitation, all Advances,
all accrued interest and late fees, and any unused commitment fee, and payment of all outstanding
Letters of Credit (or remittance of good funds to Bank equal to 100% of all outstanding Letters of
Credit).




          (b) MDHC shall have the option to prepay Facility B in whole or in part without penalty. MDHC
shall have the option to reduce the Facility B Commitment Amount in whole or in part without
penalty, provided that if MDHC elects to terminate in full the Facility B Commitment hereunder,
MDHC shall pay all monies owed to Bank under Facility B, including, without limitation, all
Advances, all accrued interest and late fees, and any unused commitment fee, and payment of all
outstanding Letters of Credit (or remittance of good funds to Bank equal to 100% of all outstanding
Letters of Credit).




     §2.11 Sale of Assets. Borrowers shall pay to Bank as a mandatory prepayment of
Facility A and Facility B, on a pro rata basis, but without any corresponding reduction of the
Facility A Commitment Amount or Facility B Commitment Amount, all net proceeds received by any
Obligor arising from any sale of assets by any Obligor in excess of $1,000,000 and which are not
reinvested in other assets useful in the business of the Obligors within one hundred eighty (180)
days of receipt thereof.



§3. CONDITIONS OF LENDING.




     §3.1 Conditions Precedent to Initial Advance. The obligation of Bank to make the
initial Advance is subject to the condition precedent that Bank shall have received, the following,
all in form and substance satisfactory to Bank:



          (a) The Notes, duly executed by the Borrower party thereto;




          (b) A Guaranty agreement in favor of Bank, duly executed by MDHC and each Subsidiary listed in
Schedule 3.1(b), as to the Obligations of CNU under the CNU Note,



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and by CNU and each Subsidiary listed on Schedule 3.1(b) as to the Obligations of MDHC under
the MDHC Note;




          (c) A Security Agreement executed by Obligors granting a first lien to Bank, as security for
all Obligations, in all Accounts, Inventory, FF&E, General Intangibles, Negotiable Collateral,
Deposits and Securities and other corporate assets of Obligors;




          (d) UCC-1 Financing Statements filed in the State of Florida and such other jurisdictions, if
any, as Bank’s counsel may deem appropriate to protect the Bank’s lien;




          (e) The Mortgage Modification duly executed by MDHC, with respect to the Mortgage granting a
first lien to Bank in the property encumbered thereby;




          (f) A title insurance policy in favor of Bank insuring the first lien of the Mortgage in an
amount acceptable to Bank.




          (g) A certified copy of the resolution of the board of directors (or equivalent) of each
Obligor approving each Loan Document to which it is a party and of all documents evidencing other
necessary corporate action and governmental approvals, if any, with respect to each such Loan
Document;




          (h) A certificate of the Secretary of each Obligor certifying the name and true signatures of
its officers authorized to sign each Loan Document to which it is a party and the other documents
to be delivered by it hereunder;




          (i) A certificate of good standing issued by the state of organization of each Obligor.




          (j) A certified copy of the organizational documents of each Obligor;




          (k) A favorable opinion of legal counsel for the Obligors, covering such matters as Bank may
reasonably request;




          (l) Certified UCC-11, lien, judgment and tax search reports for each jurisdiction in which
Obligors are located or doing business, showing no liens or financing statements of record against
the Obligors except equipment liens acceptable to Bank;




          (m) List of FF&E and Inventory showing locations;




          (n) Releases or assignments to Bank of all liens of Merrill Lynch Commercial Finance Corp. on
the assets of Obligors;




          (o) Payment of all fees and other amounts due and owing to the Bank in connection with this
Agreement including reimbursement of Bank’s legal counsel fees and costs;




          (p) Guaranties and security agreements executed by each Subsidiary (other than Excluded
Subsidiaries);




14









 








          (q) Copies of insurance policies, including liability and extended coverage casualty, covering
the assets of the Obligors in amounts and with companies reasonably acceptable to Bank.




          (r) Such other approvals, appraisals, opinions, consents and due diligence documents as Bank
may reasonably request.




     §3.2 Conditions Precedent to Each Advance. The following conditions, in addition to
any other requirements set forth in this Agreement, shall have been met or performed by the date
with respect to any Advance is to be made as requested by a Borrower (“Advance Request”)
and each Advance Request (whether or not a written Advance Request is required) shall be deemed to
be a representation that all such conditions have been satisfied:



          (a) Advance Request. A Borrower shall have delivered to Bank an Advance Request and
other information, as required under this Agreement.




          (b) No Default. No Default shall have occurred and be continuing or could occur upon
the making of the Advance in question and, if a Borrower is required to deliver a written Advance
Request, such Borrower shall have delivered to Bank an officer’s certificate (which, in the case of
MDHC, may be delivered by the Administrative Borrower) to such effect, which may be incorporated in
the Advance Request.




          (c) Correctness of Representations. All representations and warranties made by
Obligors herein or otherwise in writing in connection herewith shall be true and correct in all
material respects with the same effect as though the representations and warranties had been made
on and as of the proposed Advance Date, except if a representation is made as of a specific date,
the representation shall be true and correct in all material respects as of such date, and, if a
Borrower is required to deliver a written Advance Request, such Borrower shall have delivered to
Bank an officer’s certificate (which, in the case of MDHC, may be delivered by the Administrative
Borrower) to such effect, which may be incorporated in the Advance Request.




          (d) No Material Adverse Change. There shall have been no Material Adverse Change
since the date of the most recent financial statements delivered prior to June 30, 2009.




          (e) Limitations Not Exceeded. The proposed Advance shall not cause the outstanding
principal balance of the Facility pursuant to which the Advance is requested to exceed the
Commitment Amount with respect to such Facility.




§4. REPRESENTATIONS AND WARRANTIES.




     §4.1 Representations and Warranties. Borrowers each represent and warrant (and, as
long as this Agreement is in effect or any indebtedness of such Borrower to Bank remains
outstanding hereunder, shall be deemed continuously to represent and warrant) to Bank as follows:



          (a) CNU is a corporation organized under the laws of the State of Florida.




15









 








          (b) MDHC is a limited liability company organized under the laws of the State of Florida.




          (c) The execution, delivery and performance by each Obligor of the Loan Documents to which it
is a party are within their corporate powers; have been duly authorized by all necessary corporate
action; and do not contravene their (i) articles of incorporation or bylaws or the equivalent or
(ii) law, regulations, or any contractual restriction binding on them, or any order, judgment or
other ruling of any court or governmental authority, agency or instrumentality binding on or
affecting Obligors .




          (d) No authorization or approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for the due execution, delivery and
performance by Obligors of any Loan Document to which it is a party.




          (e) This Agreement and the other Loan Documents to which any Obligor is a party are and will
be legal, valid and binding obligations of such Obligor enforceable against such Obligor in
accordance with their respective terms.




          (f) Any balance sheets of any Obligor, and any related statements of income and retained
earnings of any Obligor, copies of which have been furnished to Bank, to the best of Borrowers’
knowledge fairly present the financial condition of such Obligor as of the dates indicated thereon
and the results of the operations of such Obligor for the periods ending on such dates. Since June
30, 2009 there has been no Material Adverse Change.




          (g) There is no pending, or to Borrowers’ knowledge, threatened action or proceeding against
any Obligor before any court, governmental agency or arbitrator, which could reasonably be expected
to materially and adversely affect the financial condition or operations of Obligors or the ability
of any Obligor to execute, deliver or perform any Loan Document.




          (h) Neither CNU nor MDHC is engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation U issued by the Board of
Governors of the Federal Reserve System), and no proceeds of any Loan will be used to purchase or
carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any
margin stock.




          (i) Obligors’ chief executive offices are in Miami-Dade County, Florida.




          (j) Obligors are in compliance with all applicable regulatory requirements except to the
extent the failure to so comply could not reasonably be expected to result in a Material Adverse
Change.




          (k) No Event of Default has occurred and is continuing.




          (l) The Collateral is free and clear of liens except for Permitted Liens.




          (m) No Obligor is in default under any obligation for borrowed money in excess of $1,000,000,
and no litigation asserting claims against any Obligor in excess of $1,000,000 as to which such
Obligor is not adequately covered by insurance is, in the reasonable



16









 






opinion of Borrower, pending or threatened in writing against such Obligor of which the Bank
has not been informed in writing.




          (n) A list of all existing Subsidiaries of Borrower is attached hereto as Schedule 4.1(h).




          (o) Attached hereto as Schedule 4.1(o) is a list of the Subsidiaries which in the aggregate
qualify as Excluded Subsidiaries per Section 5.1(m) of this Agreement. CNU represents that the
aggregate of the pro forma EBITDA of all such Excluded Subsidiaries listed in Schedule 4.1(o) does
not exceed 7.5% of the consolidated EBITDA of CNU and its Subsidiaries.




          (p) Taken as a whole, neither (a) this Agreement nor any other Loan Document or certificate or
document executed and delivered by any Obligor in accordance with or pursuant to any Loan Document
nor (b) any written statement of any Obligor, nor (c) any written representation or warranty
provided to the Bank by any Obligor in connection with the negotiation or preparation of the Loan
Documents, contains any misrepresentation or untrue statement of material fact or omits to state a
material fact necessary, in light of the circumstance under which it was made, in order to make any
such warranty, representation or statement contained therein not misleading as and when made.




          (q) No Obligor’s businesses or properties nor any relationship among them and any other
Person, nor any circumstance in connection with the execution, delivery and performance of the Loan
Documents and the transactions contemplated thereby, is such as to require a consent, approval or
authorization of, or filing, registration or qualification with, any governmental authority or any
other Person on its part as a condition to the execution, delivery and performance of, or
consummation of the transactions contemplated by the Loan Documents, which, if not obtained or
effected, would be reasonably likely to result in a Material Adverse Change, or if so, such
consent, approval, authorization, filing, registration or qualification has been duly obtained or
effected, as the case may be.




§5. COVENANTS.




     §5.1 Affirmative Covenants. At all times while this Agreement is in effect or any
indebtedness of any Borrower to Bank remains outstanding hereunder, each Obligor shall, unless Bank
otherwise expressly consents in writing:



          (a) Comply in all material respects with all laws, rules, regulations, orders and licenses
applicable to such Obligor, such compliance to include, without limitation, paying before they
become delinquent all material taxes, assessments and governmental charges imposed upon it or upon
its property except to the extent contested in good faith.




          (b) Maintain and preserve its existence in good standing, maintain and preserve any franchises
and licenses necessary in the proper conduct of its business and maintain and preserve all of its
properties necessary in the proper conduct of its business in good working order and condition,
ordinary wear and tear excepted.




17









 








          (c) Keep proper books of record and account, in which full and correct entries shall be made
of all financial transactions and of the assets and business of Obligors in accordance with
generally accepted accounting principles consistently applied.




          (d) Maintain insurance with responsible and reputable insurance companies acceptable to Bank
in such amounts and covering such risks as are customarily obtained by businesses engaging in
businesses similar to the Obligors’ business. Bank acknowledges that Obligors’ existing insurance
coverage is acceptable to Bank.




          (e) At any reasonable time and from time to time upon reasonable prior notice, permit Bank or
any agents or representatives thereof during normal business hours to examine and make copies of
and abstracts from any Obligor’s records and books of account and to visit the properties of any
Obligor and inspect the Collateral and to discuss the affairs, finances and accounts of any Obligor
with any of its officers or its accountants.




          (f) Conduct all its operations and maintain all its properties in substantial compliance with
all applicable laws, regulations and edicts, including, without limitation, State sales tax
requirements, the Occupational, Safety and Health Act, the Environmental Protection Act, the
Americans with Disabilities Act, the Employee Retirement, Income and Security Act, all Federal and
Medicare and other medical reimbursement acts, and all federal medical privacy acts, including
HIPAA, and all Federal and State pension, retirement, wage-hour, safety and other employee and
consumer protection laws, except to the extent the failure to so comply could not reasonably be
expected to result in a Material Adverse Change.




          (g) Furnish to Bank the following, all in form and substance, and with a degree of detail
reasonably satisfactory to Bank, the following financial statements (“Financial Statements”):




               (i) As soon as available, and in any event within ninety (90) days after the end of each
fiscal year of the CNU, a copy of the annual SEC Form 10-K filing of CNU containing the annual
consolidated financial statements of CNU and its Subsidiaries for such fiscal year containing a
consolidated balance sheet, statements of income and a cash flow statement, all in reasonable
detail and audited by an independent certified public accounting firm of recognized standing
reasonably satisfactory to the Bank (Bank acknowledges that Ernst & Young is acceptable to Bank),
stating that such financial statements fairly present the consolidated results of its operations
and changes in financial position for the period indicated in conformity with GAAP applied on a
consistent basis and that the audit by such accountants in connection with such financial
statements has been made in accordance with United States generally accepted auditing standards;
and



               (ii) As soon as available, and in any event within fifty (50) days after the end of each
quarterly accounting period in each fiscal year of CNU, a copy of the quarterly SEC Form 10-Q
filing of CNU including an unaudited consolidated financial report of CNU and its Subsidiaries as
at the end of such quarter and for the period then ended, containing a consolidated balance sheet,
statements of income and a cash flow statement, certified by the chief financial officer of CNU as
presenting fairly the consolidated financial position of CNU and its Subsidiaries as of the date
indicated and the results of its operations for the period



18









 




indicated in conformity with GAAP applied on a consistent basis, subject to changes resulting
from year-end adjustments; and




               (iii) Promptly upon receipt thereof, a copy of each other report or “management letter”
submitted to any Obligor by their independent accountants in connection with any annual, interim or
special audit made by them; and



               (iv) All financial statements specified in clauses (i) and (ii) above shall be furnished with
comparative figures for the corresponding period in the preceding year. Together with each delivery
of financial statements required by clauses (i) and (ii) above CNU and MDHC will deliver to the
Bank an officer’s certificate stating that there exists no Event of Default or Default, or, if any
such Event of Default or Default exists, stating the nature thereof, the period of existence
thereof and what action CNU and MDHC have taken or propose to take with respect thereto. The Bank
is authorized to deliver a copy of any financial statement delivered to it to any regulatory body
having jurisdiction over it.



               (v) Operating Budget. Not later than the date of delivery of the SEC Form 10-K to Bank, CNU
shall prepare and deliver to Bank a budget for CNU for the current fiscal year in reasonable detail
and, promptly when available, any significant revisions of any such budget. Bank acknowledges that
the form of Budget previously delivered to Bank is in a form acceptable to Bank.



               (vi) A written report to Bank of all pending litigation against any Obligor which Borrowers or
Borrowers’ counsel reasonably believes may result in a judgment not covered by insurance against
any Obligor in excess of $1,000,000.00, not less often than semi-annually, and a written report
promptly at any time that new litigation or new claims against any Obligor not covered by insurance
which Borrower or Borrowers’ counsel reasonably believes may result in a judgment against such
Obligor in excess of $1,000,000.00.



               (vii) From time to time promptly after Bank’s request, such additional information, reports
and statements as Bank may reasonably request.



     All Financial Statements shall contain or be attached to the signed and dated written
certification of the reporting party in form specified by Bank to certify that the Financial
Statements are furnished to Bank in connection with the extension of credit by Bank and fairly
present the consolidated financial condition of CNU as of the dates indicated thereon and the
consolidated results of operations of CNU for the periods ending on such dates. All required
Financial Statements must be accompanied by a certificate of compliance signed by a responsible
officer of CNU and MDHC, which includes CNU’s and MDHC’s computation of all financial covenants.
All certifications and signatures on behalf of corporations, partnerships or other entities shall
be by a representative of the reporting party satisfactory to Bank. Bank acknowledges that the
Financial Statements presented to Bank as of the date hereof are in acceptable format.



          (h) Pay all audit and inspection fees of Bank in connection with inspections and audits of
Obligor’s books and records and the Collateral; provided that for so long as no


19









 







Event of Default shall have occurred and is continuing hereunder, Obligors shall only be
required to pay for one audit per each year of the term of this Agreement.




          (i) (i) take all reasonable measures, in accordance with all applicable Anti-Terrorism and
Anti-Money Laundering Laws with respect to each holder of a direct or indirect interest in any
Obligor, to assure that funds invested by such holders are derived from legal sources; (ii) not
violate any Anti-Terrorism and Anti-Money Laundering Laws, and (iii) take reasonable steps,
consistent with industry practice for comparable organizations and in any event as required by law,
to ensure that Obligors are and shall be in compliance with all Anti-Terrorism and Anti-Money
Laundering Laws; provided however, Sections (i) and (ii) of this provision shall
not apply to the extent that such Person’s interest is in or through an entity whose securities are
traded on a national securities exchange.




          (j) Reimburse the Bank for any expenses it incurs in the preparation of this Agreement and any
agreement or instrument required by this Agreement. Expenses include, but are not limited to,
reasonable attorneys’ fees.




          (k) Promptly notify the Bank in writing of:




               (i) Any lawsuit not covered by insurance which Borrowers or Borrowers’ counsel reasonably
believes may result in a judgment against any Obligor in excess of $1,000,000.00.



               (ii) Any substantial dispute between any governmental authority and CNU, including without
limitation any dispute involving Medicare or other governmental medical reimbursements in excess of
$1,000,000.00 in the aggregate at any time.



               (iii) Any Event of Default under this Agreement, or any event which, with notice or lapse of
time or both, would constitute an Event of Default.



               (iv) Any termination or non renewal of a Managed Care Agreement which represents more than 25%
of the consolidated annual revenues of CNU and its Subsidiaries.



               (v) Any change in any Obligor’s name, legal structure, state of organization or chief
executive office.



          (l) Help the Bank perfect and protect its security interests and liens, and reimburse it for
related costs it incurs to protect its security interests and liens.



          (m) It is the intent of the parties that all Obligations shall be guaranteed by the
Subsidiaries, whether now existing or hereafter acquired or created, and shall be secured by, among
other things, substantially all the property and assets (whether now existing or hereafter
acquired) of all Subsidiaries now existing or hereafter acquired or created, including, without
limitation, all hereafter acquired properties and assets; provided, however that any Subsidiary
which has pro forma EBITDA less than 3% of the consolidated EBITDA of CNU and its Subsidiaries
(each, an “Excluded Subsidiary”) shall not be required to guarantee the Loan or pledge its assets,
provided that the aggregate of the pro forma EBITDA of all such Excluded



20









 




Subsidiaries shall not exceed 7.5% of the consolidated EBITDA of CNU and its Subsidiaries at
any time.




          (n) At its expense CNU shall execute, and shall cause its Subsidiaries (other than any
Excluded Subsidiary) to execute, joinder agreements to the Guaranty and to the Security Agreement,
and take all action (including, without limitation, filing Uniform Commercial Code and other
financing statements, mortgages and deeds of trust that may be required under applicable law, or
which the Bank may reasonably request, in order to grant, preserve, protect and perfect the
validity and first priority (except as otherwise permitted by this Agreement) of the security
interests and liens created or purported to be created by the Security Documents.




          (o) The property encumbered by the Mortgage is currently undergoing construction work pursuant
to a Notice of Commencement (the “NOC”). All invoices for work done to date have been paid in
full. Approximately, $1,200,000.00 of construction work remains to be done under the NOC.
Borrower hereby indemnifies and holds Bank harmless for any construction liens which may be filed
against the property arising from work done under the NOC, and Borrower agrees upon written request
from Bank to promptly transfer to bond any construction liens which may arise in the future.




          (p) CNU shall furnish documentation as reasonably requested by Bank to confirm that Bank has a
first perfected lien (subject to Permitted Liens) in the assets of each Subsidiary other than any
Excluded Subsidiary.




          (q) Take any action reasonably requested by the Bank to carry out the intent of this
Agreement.




     §5.2 Financial Covenants. So long as this Agreement remains in effect, CNU and its
Subsidiaries on a consolidated basis shall comply with the following:



          (a) Minimum Fixed Charge Coverage Ratio. Maintain on a consolidated basis a Fixed
Charge Coverage Ratio of not less than 1.50:1.00.




          (b) Minimum Tangible Net Worth. Maintain a consolidated “Adjusted Tangible Net Worth”
of at least $25,000,000.00.



All Financial Covenants will be determined as of the last day of each fiscal quarter of CNU. The
Fixed Charge Coverage Ratio shall be calculated using the results of the most recent four quarter
period ending on the date of determination. The current portion of long-term liabilities will be
measured as of the date which is 12 months prior to the date of determination.




     §5.3 Negative Covenants. At all times while this Agreement is in effect or any
indebtedness of any Borrower to Bank remains outstanding hereunder, no Obligor shall, unless Bank
otherwise expressly consents in writing:



          (a) Dissolve, liquidate, merge into or consolidate with any entity, or cease or suspend its
business operations, or sell, mortgage, merge, pool, transfer or otherwise dispose of all or
substantially all of its assets or properties, except that (i) CNU may merge with any


21









 







Subsidiary of CNU, provided that CNU or MDHC survives such merger, (ii) any Obligor may sell
to CNU or to MDHC all or substantially all of its assets, and (iii) any Subsidiary of CNU (other
than MDHC) may merge with or sell all or substantially all of its assets to any other Subsidiary of
CNU, provided that the surviving entity, if not otherwise an Obligor, guarantees the Loan and
executes a joinder to the Security Agreement.




          (b) Create, incur, assume or permit to exist any Debt except Permitted Debt.




          (c) Permit any lien, security interest or other charge or encumbrance upon or with respect to
any of the Collateral, now owned or hereafter acquired, in each case to secure any indebtedness
(including any contingent indebtedness) of any person or entity, including Borrower, except for
Permitted Liens.




          (d) Make capital expenditures in any fiscal year in excess of $5,000,000.00 in the aggregate
for all Obligors.




          (e) Except for transactions with CNU or any Subsidiary of CNU, engage in any business
transaction with any of their respective Affiliates or any shareholder, officer or director of the
such Obligor, including, without limitation, the purchase, sale or exchange of assets or the
rendering of any service, except upon fair and reasonable terms that are not less favorable to such
Obligor, as applicable, than those which might be obtained in an arm’s-length transaction at the
time from wholly independent and unrelated sources.




          (f) Directly or indirectly make any loans to, or purchase, assume or guarantee any note to or
from, any of its officers, directors, shareholders or Affiliates, or to or from any member of the
immediate family of any of its officers, directors, shareholders or Affiliates.




§6. EVENTS OF DEFAULT.




     §6.1 Events of Default. Each or any of the following events or conditions shall
constitute an “Event of Default” for purposes of this Agreement:



          (a) Either Borrower shall fail to pay when due any principal or interest owing by such
Borrower under or in connection with its respective Note and/or any other Loan Document on the date
when due; or




          (b) Either Borrower shall fail to pay when due any other amount (other than interest or
principal) owing by such Borrower under or in connection with its respective Note and/or any other
Loan Document within three Business Days after receipt of the invoice or written notice of amount
due; or




          (c) Any Obligor shall fail to perform or abide by any agreement contained in any Loan Document
(except a failure described in clause (a) above) and such failure shall continue for thirty (30)
days after notice thereof by Bank to the Obligor committing the failure; or




          (d) Any representation or warranty made by any Obligor (or any officer of any Obligor) in or
in connection with any Loan Document or any financial information furnished




22









 




to Bank under or in connection with any Loan Document, shall, taken as a whole, prove to have
been incorrect or misleading in any material respect when made or furnished; or




          (e) Any Obligor shall admit in writing its inability to pay its debts generally, or shall make
a general assignment for the benefit of creditors; or




          (f) Any proceeding shall be instituted by or with respect to any Obligor under the Federal
Bankruptcy Code or seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its
debts under any other law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, or
other similar official for it or for any substantial part of its property, and in the case of any
such proceeding instituted with respect to it (but not instituted by it), either such proceeding
shall remain undiminished or unstayed for a period of 60 days or any of the actions sought in such
proceeding (including without limitation the entry of an order for relief against it or the
appointment of a receiver, trustee, custodian or other similar official for it or for any
substantial part of its property) shall occur; or such Obligor shall take any corporate action to
authorize any of the actions set forth in this §6.1(e); or




          (g) Any judgment or order (or more than one judgment or order) for the payment of an aggregate
uninsured amount of $1,000,000 or more shall have been rendered against any Obligor and that same
shall not have been vacated, satisfied or stayed for a period of thirty (30) consecutive days; or




          (h) Any Loan Document or any provision thereof shall for any reason cease to be valid and
binding on any of the Obligors, or any of the Obligors shall so state or contend in writing; or




          (i) Bank becomes aware that any Obligor has been convicted of a felony; or




          (j) Bank fails to have an enforceable first lien (subject to Permitted Liens) on any of the
Collateral; or




          (k) The cancellation, termination or non renewal of any Managed Care Agreement representing
revenues in excess of 25% of the annual consolidated revenues of CNU based upon the immediately
trailing 12 months consolidated revenues; or




          (l) Bank shall conclude in good faith that a Material Adverse Change has occurred; or




          (m) A Change of Control shall have occurred; or




          (n) A default by any Obligor under and acceleration of any other Indebtedness in excess of
$1,000,000, including without limitation any other obligations to Bank, whether now existing or
hereafter created; or




          (o) Any Obligor (a) is assessed civil penalties under any Anti-Terrorism and Anti-Money Laundering
Laws, (b) has any of its funds seized or forfeited in any action under





23











 




any Anti-Terrorism and Anti-Money Laundering Laws, or (c) is identified as a person with whom a
citizen of the United States is prohibited to engage in transactions by any Anti-Terrorism and
Anti-Money laundering laws; (ii) any representation or warranty made by any Obligor in this
Agreement or any of the other Loan Documents with respect to any Anti-Terrorism and Anti-Money
Laundering Laws shall at any time prove to have been incorrect when made or (ii) any Obligor shall
default in the performance or observance of any covenant or agreement related to any Anti-Terrorism
and Anti-Money Laundering Laws contained in any of the Loan Documents.




     §6.2 Remedies.



          (a) If and at any time after an event or condition which with notice, the passage of time, or
both, would constitute an Event of Default occurs, Bank’s obligation to make Advances hereunder and
issue Letters of Credit shall, at Bank’s sole option, be suspended; provided, however, if such
event or condition is cured to Bank’s satisfaction prior to its becoming an Event of Default, such
obligation shall be reinstated. Upon the occurrence of an Event of Default, Bank’s obligation to
make Advances and issue Letters of Credit hereunder shall, at Bank’s option, terminate.




          (b) If and at any time after an Event of Default occurs, Bank may, at its sole option, declare
the principal of the Loan and all interest thereon and all other amounts owing in connection
therewith to be forthwith due and payable (including contingent obligations stemming from then
outstanding Letters of Credit), whereupon all such principal, interest and other amounts shall
become and be forthwith due and payable, without presentment, demand, protest, notice of nonpayment
or other notice of any kind, all of which are hereby expressly waived by Obligors, and Bank may at
its option proceed to enforce its remedies under the Security Agreement and Guaranty and Mortgage
and other Loan Documents.




          (c) If and at any time after an Event of Default occurs, without limiting Bank’s rights under
clauses (a) and (b) above, each Borrower shall, upon Bank’s demand, deliver to Bank good funds
equal to 100% of Bank’s maximum liability under all then outstanding Letters of Credit issued for
such Borrower’s account, to be held as cash collateral for such Borrower’s reimbursement
obligations with respect thereto as well as such Borrower’s other obligations hereunder or under
any other Loan Document.




          (d) Without waiving any of its other rights hereunder or under any other Loan Document, Bank
shall have all rights and remedies of a secured party under the Uniform Commercial Code and such
other rights and remedies as may be available hereunder, under other applicable law or pursuant to
contract. If requested by Bank, each Borrower will promptly assemble the Collateral and make it
available to Bank at a place to be designated by Bank. Each Borrower agrees that any notice by Bank
of the sale or disposition of the Collateral or any other intended action hereunder, whether
required by the Uniform Commercial Code or otherwise, shall constitute reasonable notice to
Borrower if the notice is mailed to Borrower by regular or certified mail, postage prepaid, at
least ten days before the action to be taken. Each Borrower shall be liable for any deficiencies in
the event the proceeds of the disposition of the Collateral do not satisfy the Indebtedness of such
Borrower in full.




24









 








     §6.3 Receiver. In addition to any other remedy available to it, Bank shall have the
absolute right, upon the occurrence of an Event of Default, to seek and obtain the appointment of a
receiver to take possession of and operate and/or dispose of the business and assets of any Obligor
and any costs and expenses incurred by Bank in connection with such receivership shall bear
interest at the Default Rate, at Bank’s option, and shall be secured by all Collateral.



     §6.4 Deposits; Insurance. After the occurrence of an Event of Default, each Borrower
authorizes Bank to collect and apply against the Loan any cash or deposit accounts in its
possession, and any refund of insurance premiums or any insurance proceeds payable on account of
the loss or damage to any of the Collateral and irrevocably appoints Bank as its attorney in fact
to endorse any check or draft or take other action necessary to obtain such funds.



     §6.5 No Waiver; Remedies Cumulative. No failure on the part of Bank to exercise, and
no delay in exercising, any right under any Loan Document shall operate as a waiver thereof; nor
shall any single or partial exercise of any right under any Loan Document preclude any other or
further exercise thereof or the exercise of any other right. The remedies provided in the Loan
Documents are cumulative and not exclusive of any remedies provided by law or contract.


§7. MISCELLANEOUS.




     §7.1 Amendments, Etc. No amendment or waiver of any provision of this Agreement or
other Loan Document, nor consent to any departure by any Obligor therefrom, shall in any event be
effective unless the amendment or waiver is in writing and signed by Bank and then such waiver or
consent shall be effective only in the specific instance and for the specific purpose for which
given.



     §7.2 Costs, Expenses and Taxes. Borrowers shall pay (or, if already paid by Bank,
shall reimburse Bank for) on demand all costs and expenses in connection with the negotiation,
preparation, execution, delivery, filing, recording, administration and enforcement of the Loan
Documents and any other documents to be delivered under the Loan Documents (including, without
limitation, the reasonable fees and out-of-pocket expenses of legal counsel for Bank) with respect
thereto and with respect to advising Bank as to its rights and responsibilities under the Loan
Documents after an Event of Default, and all costs and expenses (including reasonable counsel fees
and expenses, including those incurred at the appellate level and in any bankruptcy proceedings) in
connection with the enforcement of any of the Loan Documents and any other documents to be
delivered thereunder. In addition, Borrowers shall pay on demand any and all documentary stamp,
intangible and other taxes, fees, surcharges and other amounts payable or determined to be payable
to any government or governmental subdivision, agency, agent, officer or instrumentality in
connection with any of the Loan Documents and agree to hold Bank harmless from and against any and
all liabilities (including any interest and penalties) with respect to or resulting from any delay
in paying or omission to pay such taxes, fees, surcharges and other amounts. Borrowers hereby
authorize Bank to deduct from the proceeds of any Advance disbursed the amount of any costs and
expenses then owing pursuant to this §7.2 and to deduct any such amount from any account of any
Borrower with Bank.



     §7.3 Set-off Rights. As security for all of Obligor’s obligations to Bank under the
Loan Documents, each Borrower hereby grants to Bank a continuing lien on and security interest in
all



25









 







deposit accounts (whether now existing or hereafter established) of Borrowers with Bank or any
affiliate thereof and all other property of Borrowers that is now or hereafter owed by or in the
possession or control of any branch or affiliate of Bank. At any time after an Event of Default,
Bank may set off and apply any such deposit accounts against any and all obligations of Obligors
under the Loan Documents, irrespective of whether or not Bank shall have made demand under any Loan
Document and although such obligations may be unmatured.



     §7.4 Severability, Etc. Any provision of any Loan Document, which is prohibited or
unenforceable in any jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other jurisdiction. It is the
intention of the parties to this Agreement that if any provision of any Loan Document were capable
of two constructions, one of which would render the provision void and the other of which would
render the provision valid; the provision shall have the meaning, which renders it valid. No Loan
Document shall be construed less favorably to Bank because Bank or its counsel drafted it. In the
event of any inconsistency or conflict between any two Loan Documents, the one affording Bank
greater rights shall control.



     §7.5 Captions. Captions in this Agreement are included herein for convenience of
reference only and shall not in any way amplify, limit or otherwise constitute a part of this
Agreement for any other purpose.



     §7.6 No Joint Venture. Nothing contained in any Loan Document shall be deemed or
construed by the parties hereto or by any third person to create the relationship of principal and
agent or of partnership or joint venture or of any association between Bank and Obligors other
than the relationship of creditor and debtor.



     §7.7 Survival. All covenants, agreements, representations and warranties made by
Obligors in this Agreement shall, notwithstanding any investigation by Bank, be deemed material
and be deemed to have been relied upon by Bank and shall survive the execution and delivery to Bank
of this Agreement.



     §7.8 Counterparts. This Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be deemed to be an original and all of which taken
together shall constitute but one and the same instrument.



     §7.9 Further Assurances. Borrowers agree, upon the request of Bank, to execute and
deliver such further documents and do such further acts as Bank may reasonably request in order to
fully effectuate the purposes of any Loan Document.



     §7.10 Assignment. Borrowers may not assign this Agreement without Bank’s prior written
consent and any such assignment or attempted assignment without such prior written consent shall be
null and void. Bank, without either Borrower’s consent, may assign in whole or in part, and may
issue participating interests in and to, this Agreement, any other Loan Document and any Loan and,
in connection therewith, may make whatever disclosures regarding any Obligor or collateral it
considers desirable. This Agreement shall be binding upon Bank and



26









 







Borrowers’ respective successors and assigns and shall inure to the benefit of Bank’s and
Borrowers’ respective successors and assigns.



     §7.11 Notices. Unless otherwise expressly provided herein, all notices and orders
given in writing (including facsimile transmission or telex) under this Agreement shall be deemed
given when received at the addresses set forth below:



	 	 	 
	Bank:

	 	Bank of America N.A.
	 

	 	9000 Southside Boulevard
	 

	 	Mail Code FL9-100-03-17
	 

	 	Jacksonville, Florida 32256
	 
	 	 
	Borrower:

	 	Continucare Corporation
	 

	 	7200 Corporate Center Drive
	 

	 	Suite 600
	 

	 	Miami, Florida 33126
	 

	 	Attn: Fernando Fernandez
	 
	 	 
	 

	 	Continucare MDHC, LLC
	 

	 	7200 Corporate Center Drive
	 

	 	Suite 600
	 

	 	Miami, Florida 33126
	 

	 	Attn: Fernando Fernandez





and if given by telephonic communication shall be deemed given when stated. With the exception of
default or acceleration notices, notices and orders under this Agreement may be by telephonic
communication (unless Bank at any time, by means of a written notice to Borrower, declines to
accept telephonic notices and orders thereafter), or by other written communication, including
facsimile transmission. Any notice from a Borrower to Bank (including a notice requesting an
Advance) by telephonic communication, or facsimile transmission shall be confirmed by such Borrower
in a writing, signed in the original, placed in the mail (for air mail) within 24 hours. In the
case of a discrepancy between the original notice, as understood by Bank, and such confirmation
thereof, the original notice as understood by Bank shall control, and shall bind Borrowers, as to
any action taken by Bank before its receipt of such confirmation, even if such action is in error
(provided that any such error is made in good faith).




     §7.12 Taxes. All payments provided for herein or in any other Loan Documents shall be
made free and clear of any deductions for any present or future taxes or other charges imposed at
any time by any government or political subdivision or taxing authority thereof or therein, other
than income and franchise taxes (such charges being hereinafter referred to as “Taxes”). If any
Taxes are imposed or required to be withheld from any payment, the Borrower making such payment
shall (a) increase the amount of such payment so that Bank will receive a net amount (after
deduction of all Taxes) equal to the amount due hereunder and (b) promptly pay all Taxes to the
appropriate taxing authority for the account of Bank and, as promptly as possible thereafter, send
Bank an original receipt showing payment thereof, together with such additional documentary
evidence as Bank may from time to time require. Each Borrower shall indemnify Bank from and against
any and all Taxes (irrespective of when imposed) and any related interest



27









 







and penalties that may become payable by Bank as a consequence of such Borrower’s failure to
perform any of its obligations under the preceding sentence.



     §7.13 Usury Savings Clause. Should any interest or other charges paid hereunder result
in the computation or earning of interest in excess of the maximum rate or amount of interest
permitted by applicable law such excess interest and charges shall be (and the same hereby are)
waived by Bank, and the amount of such excess shall be automatically credited against, and be
deemed to have been payments in reduction of, the principal then due hereunder, and any portion of
such excess which exceeds the principal then due hereunder shall be paid by Bank to Borrower.



     §7.14 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Florida, U.S.A. without regard to any conflicts-of-law rule or
principle that would give effect to the laws of another jurisdiction.



     §7.15 Jurisdiction. Borrowers hereby irrevocably agree that the courts of the State of
Florida sitting in Miami-Dade County, Florida, U.S.A. or the United States district courts sitting
there shall try any action or proceeding relating to any Loan Document that is brought by any
Borrower excepting only enforcement actions by Bank against Collateral located in other
jurisdictions. Borrowers hereby irrevocably submit, in any such action or proceeding that is
brought by Bank, to the non-exclusive jurisdiction of each such court and irrevocably waives the
defense of an inconvenient forum with respect to any such action or proceeding.



     §7.16 Illegality. Bank shall have no obligation to make or issue any Loan if doing so
would or might violate any law or regulation.



     §7.17 No Representations Regarding Renewal, Etc. Borrowers acknowledge that Bank has
not agreed with or represented to Borrowers that the Loan Facilities created hereby will be renewed
or extended past the Termination Date or that any Advances will be made after the Termination Date.



     §7.18 No Third-Party Reliance. This Agreement is solely for the benefit of Bank and
Borrowers and may not be relied on by any third party.



     §7.19 One Agreement. This Agreement and any related security or other agreements
required by this Agreement, collectively:



          (a) represent the sum of the understandings and agreements between the Bank and the Obligors
concerning this credit;




          (b) replace any prior oral or written agreements between the Bank and the Obligors concerning
this credit; and




          (c) are intended by the Bank and the Obligors as the final, complete and exclusive statement
of the terms agreed to by them.




          (d) In the event of any conflict between this Agreement and any other Loan Document, this
Agreement will prevail.




28









 








     §7.20 USA Patriot Act Notice. Federal law requires all financial institutions to
obtain, verify and record information that identifies each person who opens an account or obtains a
loan. The Bank will ask for each Obligor’s legal name, address, tax ID number or social security
number and other identifying information. The Bank may also ask for additional information or
documentation or take other actions reasonably necessary to verify the identity of the Obligors.



     §7.21 Limitation of Liability; Indemnity. Neither Bank nor any assignee, participant
or affiliate of Bank shall have any liability with respect to, and Borrowers hereby waive, release
and agree not to sue upon, any claim (except for any claims for any damages to the extent resulting
from Bank’s gross negligence, willful misconduct or bad faith) for any punitive, consequential or
indirect damages suffered by Borrowers in connection with, arising out of, or in any way related
to, (i) this Agreement or the other Loan Documents or the transactions contemplated herein or
therein; (ii) the relationship established by this Agreement or the other Loan Documents; or (iii)
any act, omission or event occurring in connection therewith. In no event shall Bank be liable to
any Obligor for any consequential, punitive or indirect damages, and Borrowers hereby expressly
waive any and all claims and actions for any such damages. Borrowers hereby agree to indemnify and
hold harmless Bank from and against any and all claims, damages, losses and liabilities (including
without limitation legal fees and expenses) of any nature whatsoever which may be suffered or
incurred by Bank or which may be claimed against it by any other person or entity by reason of or
in connection with any of the transactions contemplated in the Loan Documents, the occurrence of an
Event of Default, or the exercise by Bank of any of its rights and remedies in connection with an
Event of Default; provided, however, that Borrowers shall not be required to indemnify Bank for any
such claims, damages, losses and liabilities to the extent cause by the gross negligence, willful
misconduct or bad faith of Bank as determined by a court of competent jurisdiction in a final
non-appealable judgment.



     §7.22 Governing Law; Arbitration.



          (a) This paragraph concerns the resolution of any controversies or claims between the parties,
whether arising in contract, tort or by statute, including but not limited to controversies or
claims that arise out of or relate to: (i) this agreement (including any renewals, extensions or
modifications); or (ii) any document related to this agreement (collectively a “Claim”). For the
purposes of this arbitration provision only, the term “parties” shall include any parent
corporation, subsidiary or affiliate of Bank involved in the servicing, management or
administration of any obligation described or evidenced by this agreement.




          (b) At the request of any party to this agreement, any Claim shall be resolved by binding
arbitration in accordance with the Federal Arbitration Act (Title 9, U.S. Code) (the “Act”). The
Act will apply even though this agreement provides that it is governed by the law of a specified
state. The arbitration will take place on an individual basis without resort to any form of class
action.




          (c) Arbitration proceedings will be determined in accordance with the Act, the then-current
rules and procedures for the arbitration of financial services disputes of the American Arbitration
Association or any successor thereof (“AAA”), and the terms of this paragraph. In the event of any
inconsistency, the terms of this paragraph shall control. If AAA is unwilling or unable to (i)
serve as the provider of arbitration or (ii) enforce any provision of this




29









 







arbitration clause, any party to this agreement may substitute another arbitration
organization with similar procedures to serve as the provider of arbitration.




          (d) The arbitration shall be administered by AAA and conducted, unless otherwise required by
law, in any U.S. state where real or tangible personal property collateral for this credit is
located or if there is no such collateral, in the state specified in the governing law section of
this agreement. All Claims shall be determined by one arbitrator; however, if Claims exceed Five
Million Dollars ($5,000,000.00), upon the request of any party, the Claims shall be decided by
three arbitrators. All arbitration hearings shall commence within ninety (90) days of the demand
for arbitration and close within ninety (90) days of commencement and the award of the
arbitrator(s) shall be issued within thirty (30) days of the close of the hearing. However, the
arbitrator(s), upon a showing of good cause, may extend the commencement of the hearing for up to
an additional sixty (60) days. The arbitrator(s) shall provide a concise written statement of
reasons for the award. The arbitration award may be submitted to any court having jurisdiction to
be confirmed, judgment entered and enforced.




          (e) The arbitrator(s) will give effect to statutes of limitation in determining any Claim and
may dismiss the arbitration on the basis that the Claim is barred. For purposes of the application
of the statute of limitations, the service on AAA under applicable AAA rules of a notice of Claim
is the equivalent of the filing of a lawsuit. Any dispute concerning this arbitration provision or
whether a Claim is arbitrable shall be determined by the arbitrator(s). The arbitrator(s) shall
have the power to award legal fees pursuant to the terms of this agreement.




          (f) This paragraph does not limit the right of any party to: (i) exercise self-help remedies,
such as but not limited to, setoff; (ii) initiate judicial or non-judicial foreclosure against any
real or personal property collateral; (iii) exercise any judicial or power of sale rights, or (iv)
act in a court of law to obtain an interim remedy, such as but not limited to, injunctive relief,
writ of possession or appointment of a receiver, or additional or supplementary remedies.




          (g) The filing of a court action is not intended to constitute a waiver of the right of any
party, including the suing party, thereafter to require submittal of the Claim to arbitration.




     THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS (OTHER THAN THOSE SECURITY INSTRUMENTS WHICH
EXPRESSLY PROVIDE THAT THEY SHALL BE GOVERNED BY THE LAWS OF ANOTHER JURISDICTION) SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA APPLICABLE TO
CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE. ANY ARBITRATION COMMENCED UNDER THIS
AGREEMENT SHALL BE BROUGHT EXCLUSIVELY IN MIAMI-DADE COUNTY, FLORIDA.



     ANY CLAIM OR CONTROVERSY BETWEEN ANY BORROWER AND THE BANK INCLUDING, BUT NOT LIMITED TO,
THOSE ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENTS (EXCLUDING THE
MORTGAGE AND THE ASSIGNMENT OF RENTS AND LEASES) AND INCLUDING, BUT NOT LIMITED TO, CLAIMS BASED ON
OR ARISING FROM AN ALLEGED TORT,



30









 







SHALL BE DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR
IF NOT APPLICABLE, THE APPLICABLE STATE LAW DEALING WITH ARBITRATION), AND THE RULES OF PRACTICE
AND PROCEDURE FOR THE ARBITRATION OF COMMERCIAL DISPUTES OF THE AMERICAN ARBITRATION ASSOCIATION,
OR ANY SUCCESSOR THERETO, AS SUPPLEMENTED BY ANY SPECIAL RULES SET FORTH IN ANY RELATED DOCUMENT.
JUDGMENT UPON ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. EITHER
BORROWER OR THE BANK MAY BRING AN ACTION, INCLUDING A SUMMARY OF EXPEDITED PROCEEDING, TO COMPEL
ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS AGREEMENT OR ANY OR OTHER CREDIT DOCUMENTS
(EXCLUDING THE MORTGAGE AND THE ASSIGNMENT OF RENTS AND LEASES) APPLY IN ANY COURT HAVING
JURISDICTION OVER SUCH ACTION. BORROWERS AND THE BANK WILL BEAR THEIR OWN FEES AND EXPENSES
(INCLUDING THEIR OWN LEGAL EXPENSES AND COSTS) INCURRED AS A RESULT OF ANY ARBITRATION HEREUNDER.



     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective officers thereunto duly authorized, as of the date hereof.



	 	 	 	 	 
	 	CONTINUCARE CORPORATION

 	 
	 	By:  	/s/ Fernando Fernandez	 
	 	 	Fernando Fernandez, Senior Vice President 	 
	 
	 	CONTINUCARE MDHC, LLC

 	 
	 	By:  	CONTINUCARE CORPORATION, its sole member 	 
	 
	 	By:  	/s/ Fernando Fernandez	 
	 	 	Fernando Fernandez, Senior Vice President 	 
	 
	 	BANK OF AMERICA, N.A.

 	 
	 	By:  	/s/ Dave Gutierrez	 
	 	 	Dave Gutierrez, Senior Vice President 	 
	 	 	 	 



31









 






	 	 	 	 	 



EXHIBIT A









	 	 	 	 	 
	 

	 	BORROWERS:
	 	CONTINUCARE CORPORATION
AND CONTINUCARE MDHC, LLC
	 
	 	 	 	 
	 

	 	GUARANTOR:	 	 
	 

	 	 	 	 





CONTINUING AND UNCONDITIONAL GUARANTY




To: Bank of America, N.A.




          1. The Guaranty. For valuable consideration, the undersigned (“Guarantor”) hereby
unconditionally guarantees and promises to pay promptly to Bank of America, N.A., its subsidiaries
and affiliates (collectively, “Bank”), or order, in lawful money of the United States, any and all
Indebtedness of CONTINUCARE CORPORATION, a Florida corporation and CONTINUCARE MDHC, LLC, a Florida
limited liability company (collectively, “Borrower”), to Bank when due, whether at stated maturity,
upon acceleration or otherwise, and at all times thereafter. The liability of Guarantor under this
Guaranty is not limited as to the principal amount of the Indebtedness guaranteed and includes,
without limitation, liability for all interest, fees, indemnities (including, without limitation,
hazardous waste indemnities), and other costs and expenses relating to or arising out of the
Indebtedness and for all Swap Obligations now or hereafter owing from Borrower to Bank. The
liability of Guarantor is continuing and relates to any Indebtedness, including that arising under
successive transactions which shall either continue the Indebtedness or from time to time renew it
after it has been satisfied. This Guaranty is cumulative and does not supersede any other
outstanding guaranties, and the liability of Guarantor under this Guaranty is exclusive of
Guarantor’s liability under any other guaranties signed by Guarantor. If multiple individuals or
entities sign this Guaranty, their obligations under this Guaranty shall be joint and several. If
Guarantor is a subsidiary or affiliate of Borrower, Guarantor’s liability hereunder shall not
exceed at any one time the largest amount during the period commencing with Guarantor’s execution
of this Guaranty and thereafter that would not render Guarantor’s obligations hereunder subject to
avoidance under Section 548 of the Bankruptcy Code (Title 11, United States Code) or any comparable
provisions of any applicable state law.




          2. Definitions.




               (a) “Bank Agreements” shall mean all agreements, documents, and instruments evidencing any of
the Indebtedness, including but not limited to all loan agreements between Borrower and Bank and
promissory notes from Borrower in favor of Bank, and all deeds of trust, mortgages, security
agreements, and other agreements, documents, and



32









 







instruments executed by Borrower in connection with the Indebtedness, all as now in effect and as
hereafter amended, restated, renewed, or superseded.



               (b) “Borrower” shall mean the individual or the entity named in Paragraph 1 of this Guaranty
and, if more than one, then any one or more of them.



               (c) “Guarantor” shall mean the individual or the entity signing this Guaranty and, if more
than one, then any one or more of them.



               (d) “Indebtedness” shall mean any and all debts, liabilities, and obligations of Borrower to
Bank, now or hereafter existing, whether voluntary or involuntary and however arising, whether
direct or indirect or acquired by Bank by assignment, succession, or otherwise, whether due or not
due, absolute or contingent, liquidated or unliquidated, determined or undetermined, held or to be
held by Bank for its own account or as agent for another or others, whether Borrower may be liable
individually or jointly with others, whether recovery upon such debts, liabilities, and obligations
may be or hereafter become barred by any statute of limitations, and whether such debts,
liabilities, and obligations may be or hereafter become otherwise unenforceable. Indebtedness
includes, without limitation, any and all Swap Obligations and any and all obligations of Borrower
to Bank for reasonable attorneys’ fees and all other costs and expenses incurred by Bank in the
collection or enforcement of any debts, liabilities, and obligations of Borrower to Bank.



               (e) “Swap Obligations” shall mean all obligations of Borrower arising under any interest
rate, credit, commodity or equity swap, cap, floor, collar, forward foreign exchange transaction,
currency swap, cross currency rate swap, currency option, securities puts, calls, collars, options
or forwards or any combination of, or option with respect to, these or similar transactions now or
hereafter entered into between Borrower and Bank.



          3. Obligations Independent. The obligations hereunder are independent of the
obligations of Borrower or any other guarantor, and a separate action or actions may be brought and
prosecuted against Guarantor whether action is brought against Borrower or any other guarantor or
whether Borrower or any other guarantor be joined in any such action or actions. Anyone executing
this Guaranty shall be bound by its terms without regard to execution by anyone else.




          4. Rights of Bank. Guarantor authorizes Bank, without notice or demand and without
affecting its liability hereunder, from time to time to:




               (a) renew, compromise, extend, accelerate, or otherwise change the time for payment, or
otherwise change the terms, of the Indebtedness or any part thereof, including increase or decrease
of the rate of interest thereon, or otherwise change the terms of any Bank Agreements;



               (b) receive and hold security for the payment of this Guaranty or any Indebtedness and
exchange, enforce, waive, release, fail to perfect, sell, or otherwise dispose of any such
security;



33









 





               (c) apply such security and direct the order or manner of sale thereof as Bank in its
discretion may determine;



               (d) release or substitute any Guarantor or any one or more of any endorsers or other
guarantors of any of the Indebtedness; and



               (e) permit the Indebtedness to exceed Guarantor’s liability under this Guaranty, and
Guarantor agrees that any amounts received by Bank from any source other than Guarantor shall be
deemed to be applied first to any portion of the Indebtedness not guaranteed by Guarantor.



          5. Guaranty to be Absolute. Guarantor agrees that until the Indebtedness has been
paid in full and any commitments of Bank or facilities provided by Bank with respect to the
Indebtedness have been terminated, Guarantor shall not be released by or because of the taking, or
failure to take, any action that might in any manner or to any extent vary the risks of Guarantor
under this Guaranty or that, but for this paragraph, might discharge or otherwise reduce, limit, or
modify Guarantor’s obligations under this Guaranty. Guarantor waives and surrenders any defense to
any liability under this Guaranty based upon any such action, including but not limited to any
action of Bank described in the immediately preceding paragraph of this Guaranty. It is the
express intent of Guarantor that Guarantor’s obligations under this Guaranty are and shall be
absolute and unconditional.



          6. Guarantor’s Waivers of Certain Rights and Certain Defenses. Guarantor waives:




               (a) any right to require Bank to proceed against Borrower, proceed against or exhaust any
security for the Indebtedness, or pursue any other remedy in Bank’s power whatsoever;



               (b) any defense arising by reason of any disability or other defense of Borrower, or the
cessation from any cause whatsoever of the liability of Borrower;



               (c) any defense based on any claim that Guarantor’s obligations exceed or are more burdensome
than those of Borrower; and



               (d) the benefit of any statute of limitations affecting Guarantor’s liability hereunder.


No provision or waiver in this Guaranty shall be construed as limiting the generality of any other
waiver contained in this Guaranty.




          7. Waiver of Subrogation. Until the Indebtedness has been paid in full and any
commitments of Bank or facilities provided by Bank with respect to the Indebtedness have been
terminated, even though the Indebtedness may be in excess of Guarantor’s liability hereunder,
Guarantor waives to the extent permitted by applicable law any right of subrogation, reimbursement,
indemnification, and contribution (contractual, statutory, or otherwise)




34









 







including, without limitation, any claim or right of subrogation under the Bankruptcy Code (Title
11, United States Code) or any successor statute, arising from the existence or performance of this
Guaranty, and Guarantor waives to the extent permitted by applicable law any right to enforce any
remedy that Bank now has or may hereafter have against Borrower, and waives any benefit of, and any
right to participate in, any security now or hereafter held by Bank.




          8. Waiver of Notices. Guarantor waives all presentments, demands for performance,
notices of nonperformance, protests, notices of protest, notices of dishonor, notices of intent to
accelerate, notices of acceleration, notices of any suit or any other action against Borrower or
any other person, any other notices to any party liable on any Bank Agreement (including
Guarantor), notices of acceptance of this Guaranty, notices of the existence, creation, or
incurring of new or additional Indebtedness to which this Guaranty applies or any other
Indebtedness of Borrower to Bank, and notices of any fact that might increase Guarantor’s risk.




          9. Security. To secure all of Guarantor’s obligations hereunder, Guarantor assigns
and grants to Bank a security interest in all moneys, securities, and other property of Guarantor
now or hereafter in the possession of Bank, all deposit accounts of Guarantor maintained with Bank,
and all proceeds thereof. Upon default or breach of any of Guarantor’s obligations to Bank, Bank
may apply any deposit account to reduce the Indebtedness, and may foreclose any collateral as
provided in the Uniform Commercial Code and in any security agreements between Bank and Guarantor.




          10. Subordination. Any obligations of Borrower to Guarantor, now or hereafter
existing, including but not limited to any obligations to Guarantor as subrogee of Bank or
resulting from Guarantor’s performance under this Guaranty, are hereby subordinated to the
Indebtedness. In addition to Guarantor’s waiver of any right of subrogation as set forth in this
Guaranty with respect to any obligations of Borrower to Guarantor as subrogee of Bank, Guarantor
agrees that, if Bank so requests, upon the occurrence and continuance of an Event of Default under
the Credit Facility Agreement of even date herewith among Bank and Borrower (“Credit Agreement”),
Guarantor shall not demand, take, or receive from Borrower, by setoff or in any other manner,
payment of any other obligations of Borrower to Guarantor until the Indebtedness has been paid in
full and any commitments of Bank or facilities provided by Bank with respect to the Indebtedness
have been terminated. If any payments are received by Guarantor in violation of such waiver or
agreement, such payments shall be received by Guarantor as trustee for Bank and shall be paid over
to Bank on account of the Indebtedness, but without reducing or affecting in any manner the
liability of Guarantor under the other provisions of this Guaranty. Any security interest, lien,
or other encumbrance that Guarantor may now or hereafter have on any property of Borrower is hereby
subordinated to any security interest, lien, or other encumbrance that Bank may have on any such
property.




          11. Revocation of Guaranty.




               (a) This Guaranty may be revoked at any time by Guarantor in respect to future transactions.
Such revocation shall be effective upon actual receipt by Bank, at the address shown below or at
such other address as may have been provided to Guarantor by Bank, of written notice of revocation.
Revocation shall not affect any of Guarantor’s obligations or



35









 




Bank’s rights with respect to transactions committed or entered into prior to Bank’s receipt of
such notice, regardless of whether or not the Indebtedness related to such transactions, before or
after revocation, has been incurred, renewed, compromised, extended, accelerated, or otherwise
changed as to any of its terms, including time for payment or increase or decrease of the rate of
interest thereon, and regardless of any other act or omission of Bank authorized hereunder.
Revocation by Guarantor shall not affect any obligations of any other guarantor.




               (b) In the event of the death of a Guarantor, the liability of the estate of the deceased
Guarantor shall continue in full force and effect as to (i) the Indebtedness existing at the date
of death, and any renewals or extensions thereof, and (ii) loans or advances made to or for the
account of Borrower after the date of the death of the deceased Guarantor pursuant to a commitment
made by Bank to Borrower prior to the date of such death. As to all surviving Guarantors, this
Guaranty shall continue in full force and effect after the death of a Guarantor, not only as to the
Indebtedness existing at that time, but also as to the Indebtedness thereafter incurred by Borrower
to Bank.



               (c) Guarantor acknowledges and agrees that this Guaranty may be revoked only in accordance
with the foregoing provisions of this paragraph and shall not be revoked simply as a result of any
change in name, location, or composition or structure of Borrower, the dissolution of Borrower, or
the termination, increase, decrease, or other change of any personnel or owners of Borrower.



          12. Termination; Reinstatement of Guaranty. This Guaranty shall automatically
terminate and be of no further force and effect at such time as all obligations of Borrower under
the Credit Agreement are repaid in full and Bank has no further obligations to make any Advances
under the Credit Agreement. If this Guaranty is terminated, revoked, returned, or canceled, and
subsequently any payment or transfer of any interest in property by Borrower to Bank is rescinded
or must be returned by Bank to Borrower, this Guaranty shall be reinstated with respect to any such
payment or transfer, regardless of any such prior termination, revocation, return, or cancellation.




          13. Stay of Acceleration. In the event that acceleration of the time for payment of
any of the Indebtedness is stayed upon the insolvency, bankruptcy, or reorganization of Borrower or
otherwise, all such Indebtedness guaranteed by Guarantor shall nonetheless be payable by Guarantor
immediately if requested by Bank.




          14. No Setoff or Deductions; Taxes.




               (a) Guarantor represents and warrants that it is organized and resident in the United States
of America. All payments by Guarantor hereunder shall be paid in full, without setoff or
counterclaim or any deduction or withholding whatsoever, including, without limitation, for any and
all present and future taxes. If Guarantor must make a payment under this Guaranty, Guarantor
represents and warrants that it will make the payment from one of its U.S. resident offices to Bank
so that no withholding tax is imposed on the payment. Notwithstanding the foregoing, if Guarantor
makes a payment under this Guaranty to which withholding tax applies or if any taxes (other than
taxes on net income (i) imposed by the country or any



36









 




subdivision of the country in which Bank’s principal office or actual lending office is located and
(ii) measured by the United States taxable income Bank would have received if all payments under or
in respect of this Guaranty were exempt from taxes levied by Guarantor’s country) are at any time
imposed on any payments under or in respect of this Guaranty including, but not limited to,
payments made pursuant to this paragraph, Guarantor (i) shall pay all such taxes to the relevant
authority in accordance with applicable law such that Bank receives the sum it would have received
had no such deduction or withholding been made (or, if Guarantor cannot legally comply with the
foregoing, Guarantor shall pay to Bank such additional amounts as will result in Bank receiving the
sum it would have received had no such deduction or withholding been made), and (ii) shall pay to
Bank, on demand, all additional amounts that Bank specifies as necessary to preserve the after-tax
yield Bank would have received if such taxes had not been imposed.




               (b) Guarantor shall promptly provide Bank with an original receipt or certified copy issued
by the relevant authority evidencing the payment of any such amount required to be deducted or
withheld.



          15. Information Relating to Borrower. Guarantor acknowledges and agrees that it has
made such independent examination, review, and investigation of the Bank Agreements as Guarantor
deems necessary and appropriate, including, without limitation, any covenants pertaining to
Guarantor contained therein, and shall have sole responsibility to obtain from Borrower any
information required by Guarantor about any modifications thereto. Guarantor further acknowledges
and agrees that it shall have the sole responsibility for, and has adequate means of, obtaining
from Borrower such information concerning Borrower’s financial condition or business operations as
Guarantor may require, and that Bank has no duty, and Guarantor is not relying on Bank, at any time
to disclose to Guarantor any information relating to the business operations or financial condition
of Borrower.




          16. Borrower’s Authorization. Where Borrower is a corporation, partnership, or
limited liability company, it is not necessary for Bank to inquire into the powers of Borrower or
of the officers, directors, partners, members, managers, or agents acting or purporting to act on
its behalf, and any Indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder, subject to any limitations on Guarantor’s liability set forth
herein.




          17. Guarantor Information; Reporting to Credit Bureaus. Guarantor authorizes Bank to
verify or check any information given by Guarantor to Bank, check Guarantor’s credit references,
verify employment, and obtain credit reports. Guarantor agrees that Bank shall have the right at
all times to disclose and report to credit reporting agencies and credit rating agencies such
information pertaining to the Indebtedness and/or Guarantor as is consistent with Bank’s policies
and practices from time to time in effect. Guarantor acknowledges and agrees that the
authorizations provided in this paragraph apply to any individual general partner of Guarantor and
to Guarantor’s spouse and any such general partner’s spouse if Guarantor or such general partner is
married and lives in a community property state.




37









 








          18. Foreign Currency.




               (a) If any claim arising under or related to this Guaranty is reduced to judgment denominated
in a currency (the “Judgment Currency”) other than the currency or currencies in which the
guaranteed Indebtedness is denominated (individually, an “Obligation Currency”), the judgment shall
be for the equivalent in the Judgment Currency of the amount of the claim denominated in each
Obligation Currency included in the judgment, determined as of the date of judgment. The
equivalent of any Obligation Currency amount in any Judgment Currency shall be calculated at the
spot rate for the purchase of the Obligation Currency with the Judgment Currency quoted by Bank in
the place of Bank’s choice at or about 8:00 a.m. on the date for determination specified above.
Guarantor shall indemnify Bank and hold Bank harmless from and against all loss or damage resulting
from any change in exchange rates between the date any claim is reduced to judgment and the date of
payment thereof by Guarantor.



               (b) The obligations hereunder shall not be affected by any acts of any governmental authority
affecting Borrower including, without limitation, any restrictions on the conversion of currency or
repatriation or control of funds or any total or partial expropriation of Borrower’s property, or
by economic, political, regulatory, or other events in the countries where Borrower is located. If
Bank so notifies Guarantor in writing, at Bank’s sole and absolute discretion, payments under this
Guaranty shall be made in the U.S. Dollar equivalent of any guaranteed Indebtedness that is
denominated in an Obligation Currency, determined as of the date payment is made.



          19. Change of Status. Any Guarantor that is a business entity shall not enter into
any consolidation, merger, or other combination unless Guarantor or another “Guarantor” as defined
under the Credit Agreement is the surviving business entity. Further, Guarantor shall not change
its legal structure unless (a) Guarantor obtains the prior written consent of Bank and (b) all
Guarantor’s obligations under this Guaranty are assumed by the new business entity.




          20. Remedies. Subject to any applicable grace, cure or notice periods under the
Credit Agreement, if Guarantor fails to fulfill its duty to pay all Indebtedness guaranteed
hereunder, Bank shall have all of the remedies of a creditor and, to the extent applicable, of a
secured party, under all applicable law. Without limiting the foregoing to the extent permitted by
law, Bank may, at its option and without notice or demand:




               (a) declare any Indebtedness due and payable at once;



               (b) take possession of any collateral pledged by Borrower or Guarantor, wherever located, and
sell, resell, assign, transfer, and deliver all or any part of the collateral at any public or
private sale or otherwise dispose of any or all of the collateral in its then condition, for cash
or on credit or for future delivery, and in connection therewith Bank may impose reasonable
conditions upon any such sale. Further, Bank, unless prohibited by law the provisions of which
cannot be waived, may purchase all or any part of the collateral to be sold, free from and
discharged of all trusts, claims, rights of redemption and equities of Borrower or Guarantor
whatsoever. Guarantor acknowledges and agrees that the sale of any collateral through any
nationally recognized broker-dealer, investment banker, or any other method



38









 




common in the securities industry shall be deemed a commercially reasonable sale under the Uniform
Commercial Code or any other equivalent statute or federal law, and expressly waives notice thereof
except as provided herein; and




               (c) set off against any or all liabilities of Guarantor all money owed by Bank or any of its
agents or affiliates in any capacity to Guarantor, whether or not due, and also set off against all
other liabilities of Guarantor to Bank all money owed by Bank in any capacity to Guarantor. If
exercised by Bank, Bank shall be deemed to have exercised such right of setoff and to have made a
charge against any such money immediately upon the occurrence of such default although made or
entered on the books subsequent thereto.



          21. Notices. All notices required under this Guaranty shall be personally delivered
or sent by first class mail, postage prepaid, or by overnight courier, to the addresses on the
signature page of this Guaranty, or sent by facsimile to the fax numbers listed on the signature
page, or to such other addresses as Bank and Guarantor may specify from time to time in writing.
Notices shall be deemed delivered on the date of actual receipt.




          22. Successors and Assigns. This Guaranty (a) binds Guarantor and Guarantor’s
executors, administrators, successors, and assigns, provided that Guarantor may not assign its
rights or obligations under this Guaranty without the prior written consent of Bank, and (b) inures
to the benefit of Bank and Bank’s indorsees, successors, and assigns. Bank may, without notice to
Guarantor and without affecting Guarantor’s obligations hereunder, sell, assign, grant
participations in, or otherwise transfer to any other person, firm, or corporation the Indebtedness
and this Guaranty, in whole or in part. Guarantor agrees that Bank may disclose to any assignee or
purchaser, or any prospective assignee or purchaser, of all or part of the Indebtedness any and all
information in Bank’s possession concerning Guarantor, this Guaranty, and any security for this
Guaranty.




          23. Amendments, Waivers, and Severability. No provision of this Guaranty may be
amended or waived except in writing. No failure by Bank to exercise, and no delay in exercising,
any of its rights, remedies, or powers shall operate as a waiver thereof, and no single or partial
exercise of any such right, remedy, or power shall preclude any other or further exercise thereof
or the exercise of any other right, remedy, or power. The unenforceability or invalidity of any
provision of this Guaranty shall not affect the enforceability or validity of any other provision
of this Guaranty.




          24. Costs and Expenses. Guarantor agrees to pay all reasonable attorneys’ fees, and
all other costs and expenses that may be incurred by Bank (a) in the enforcement of this Guaranty
or (b) in the preservation, protection, or enforcement of any rights of Bank in any case commenced
by or against Guarantor or Borrower under the Bankruptcy Code (Title 11, United States Code) or any
similar or successor statute.




          25. Governing Law and Jurisdiction. This Guaranty shall be governed by and construed
and enforced in accordance with the law of the State of Florida. To the extent that Bank has
greater rights or remedies under federal law, whether as a national bank or otherwise, this
paragraph shall not be deemed to deprive Bank of such rights and remedies as may be



39









 






available under federal law. Jurisdiction and venue for any action or proceeding to enforce this
Guaranty shall be the forum appropriate for such action or proceeding against Borrower, to which
jurisdiction Guarantor irrevocably submits and to which venue Guarantor waives to the fullest
extent permitted by law any defense asserting an inconvenient forum in connection therewith. It is
provided, however, that if Guarantor owns property in another state, notwithstanding that the forum
for enforcement action is elsewhere, Bank may commence a collection proceeding in any state in
which Guarantor owns property for the purpose of enforcing provisional remedies against such
property. Service of process by Bank in connection with such action or proceeding shall be binding
on Guarantor if sent to Guarantor by registered or certified mail at its address specified below.




          26. Dispute Resolution Provision. This paragraph, including the subparagraphs below,
is referred to as the “Dispute Resolution Provision.” This Dispute Resolution Provision is a
material inducement for the parties entering into this agreement.




          (a) This Dispute Resolution Provision concerns the resolution of any controversies or claims
between the parties, whether arising in contract, tort or by statute, including but not limited to
controversies or claims that arise out of or relate to: (i) this agreement (including any renewals,
extensions or modifications); or (ii) any document related to this agreement (collectively a
“Claim”). For the purposes of this Dispute Resolution Provision only, the term “parties” shall
include any parent corporation, subsidiary or affiliate of the Bank involved in the servicing,
management or administration of any obligation described or evidenced by this agreement.




          (b) At the request of any party to this agreement, any Claim shall be resolved by binding
arbitration in accordance with the Federal Arbitration Act (Title 9, U.S. Code) (the “Act”). The
Act will apply even though this agreement provides that it is governed by the law of a specified
state.




          (c) Arbitration proceedings will be determined in accordance with the Act, the then-current
rules and procedures for the arbitration of financial services disputes of the American Arbitration
Association or any successor thereof (“AAA”), and the terms of this Dispute Resolution Provision.
In the event of any inconsistency, the terms of this Dispute Resolution Provision shall control.
If AAA is unwilling or unable to (i) serve as the provider of arbitration or (ii) enforce any
provision of this arbitration clause, the Bank may designate another arbitration organization with
similar procedures to serve as the provider of arbitration.




          (d) The arbitration shall be administered by AAA and conducted, unless otherwise required by
law, in any U.S. state where real or tangible personal property collateral for this credit is
located or if there is no such collateral, in the state specified in the governing law section of
this agreement. All Claims shall be determined by one arbitrator; however, if Claims exceed Five
Million Dollars ($5,000,000), upon the request of any party, the Claims shall be decided by three
arbitrators. All arbitration hearings shall commence within ninety (90) days of the demand for
arbitration and close within ninety (90) days of commencement and the award of the arbitrator(s)
shall be issued within thirty (30) days of the close of the hearing. However, the arbitrator(s),
upon a showing of good cause, may extend the commencement of the hearing



40









 






for up to an additional sixty (60) days. The arbitrator(s) shall provide a concise written
statement of reasons for the award. The arbitration award may be submitted to any court having
jurisdiction to be confirmed and have judgment entered and enforced.




          (e) Except as waived by Guarantor in this Guaranty, the arbitrator(s) will give effect to
statutes of limitation in determining any Claim and may dismiss the arbitration on the basis that
the Claim is barred. For purposes of the application of any statutes of limitation, the service on
AAA under applicable AAA rules of a notice of Claim is the equivalent of the filing of a lawsuit.
Any dispute concerning this arbitration provision or whether a Claim is arbitrable shall be
determined by the arbitrator(s), except as set forth at subparagraph (h) of this Dispute Resolution
Provision. The arbitrator(s) shall have the power to award legal fees pursuant to the terms of
this agreement.




          (f) This paragraph does not limit the right of any party to: (i) exercise self-help remedies,
such as but not limited to, setoff; (ii) initiate judicial or non-judicial foreclosure against any
real or personal property collateral; (iii) exercise any judicial or power of sale rights, or (iv)
act in a court of law to obtain an interim remedy, such as but not limited to, injunctive relief,
writ of possession or appointment of a receiver, or additional or supplementary remedies.




          (g) The filing of a court action is not intended to constitute a waiver of the right of any
party, including the suing party, thereafter to require submittal of the Claim to arbitration.




          (h) Any arbitration or trial by a judge of any Claim will take place on an individual basis
without resort to any form of class or representative action (the “Class Action Waiver”).
Regardless of anything else in this Dispute Resolution Provision, the validity and effect of the
Class Action Waiver may be determined only by a court and not by an arbitrator. The parties to
this Agreement acknowledge that the Class Action Waiver is material and essential to the
arbitration of any disputes between the parties and is nonseverable from the agreement to arbitrate
Claims. If the Class Action Waiver is limited, voided or found unenforceable, then the parties’
agreement to arbitrate shall be null and void with respect to such proceeding, subject to the right
to appeal the limitation or invalidation of the Class Action Waiver. The Parties acknowledge and
agree that under no circumstances will a class action be arbitrated.




          (i) By agreeing to binding arbitration, the parties irrevocably and voluntarily waive any
right they may have to a trial by jury in respect of any Claim. Furthermore, without intending in
any way to limit this agreement to arbitrate, to the extent any Claim is not arbitrated, the
parties irrevocably and voluntarily waive any right they may have to a trial by jury in respect of
such Claim. This waiver of jury trial shall remain in effect even if the Class Action Waiver is
limited, voided or found unenforceable. WHETHER THE CLAIM IS DECIDED BY ARBITRATION OR BY TRIAL BY
A JUDGE, THE PARTIES AGREE AND UNDERSTAND THAT THE EFFECT OF THIS AGREEMENT IS THAT THEY ARE GIVING
UP THE RIGHT TO TRIAL BY JURY TO THE EXTENT PERMITTED BY LAW.




41









 








          27. FINAL AGREEMENT. BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT:
(A) THIS DOCUMENT REPRESENTS THE FINAL AGREEMENT BETWEEN PARTIES WITH RESPECT TO THE SUBJECT
MATTER HEREOF, (B) THIS DOCUMENT SUPERSEDES ANY COMMITMENT LETTER, TERM SHEET, OR OTHER WRITTEN
OUTLINE OF TERMS AND CONDITIONS RELATING TO THE SUBJECT MATTER HEREOF, UNLESS SUCH COMMITMENT
LETTER, TERM SHEET, OR OTHER WRITTEN OUTLINE OF TERMS AND CONDITIONS EXPRESSLY PROVIDES TO THE
CONTRARY, (C) THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (D) THIS DOCUMENT MAY
NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR
UNDERSTANDINGS OF THE PARTIES.




	 	 	 
	 

	 	Business Entity Guarantor:
	 
	 	 
	Witness:
	 	 
	 

	 	 
	 
	 	 
	 

	 	By:
	 

	 	 


	Printed Name:

	 	Printed Name:
	 

	 	 


	 

	 	Title:
	 

	 	 


	 
	 	 
	Address for notices to Bank:

	 	Address for notices to Guarantor:
	9000 Southside Blvd., Suite 100, 3rd Floor

	 	                              7200 Corporate Center Drive
	Jacksonville, FL 32256

	 	Miami, FL 33126
	Facsimile:

	 	Facsimile:
	 

	 	 







42









 






Schedule 3.1(b)




“Non Excluded Subsidiaries”




Continucare Medical Management, Inc.




Continucare MSO, Inc.




Continucare MDHC, LLC




43









 





Schedule 4.1(n)




“All Subsidiaries”




	 	 	 
	Continucare Managed Care, Inc.

	 	Florida
	 
	 	 
	Continucare Medical Management, Inc.

	 	Florida
	 
	 	 
	Continucare Payment Corporation

	 	Florida
	 
	 	 
	Continucare Physician Practice Management, Inc.

	 	Florida
	 
	 	 
	Sunset Harbor Home Health, Inc.

	 	Florida
	 
	 	 
	Continucare Clinics, Inc.

	 	Florida
	 
	 	 
	Continucare MSO, Inc.

	 	 
	 
	 	 
	Continucare MDHC, LLC
	 	 
	 
	 	 
	CNU Blue 2, LLC

	 	Florida
	 
	 	 
	Seredor Corporation

	 	Florida






44









 






Schedule 4.1(o)




“Excluded Subsidiaries”




	 	 	 
	Continucare Managed Care, Inc.

	 	Florida
	 
	 	 
	Continucare Payment Corporation

	 	Florida
	 
	 	 
	Continucare Physician Practice Management, Inc.

	 	Florida
	 
	 	 
	Sunset Harbor Home Health, Inc.

	 	Florida
	 
	 	 
	Continucare Clinics, Inc.

	 	Florida
	 
	 	 
	CNU Blue 2, LLC

	 	Florida
	 
	 	 
	Seredor Corporation

	 	Florida







45