Document:

LETTER AGREEMENT

 

Exhibit 10.1

	 	 	 
	

	 	 Private Client Group

Merrill Lynch Business

Financial Services Inc.

222 North LaSalle Street

Chicago, Illinois 60601

(312) 499-3280

FAX: (312) 368-1387

March 18, 2005

Continucare Corporation

7200 Corporate Center Drive, Suite 600

Miami, FL 33126

     Re: WCMA Line of Credit Extension

Ladies & Gentlemen:

This Letter Agreement will serve to confirm certain agreements of Merrill Lynch Business Financial
Services Inc. (“MLBFS”) and Continucare Corporation (“Customer”) with respect to: (i) that certain
WCMA LOAN AND SECURITY AGREEMENT NO. 81V-07064 between MLBFS and Customer (including any previous
amendments and extensions thereof), and (ii) all other agreements between MLBFS and Customer in
connection therewith (collectively, the “Loan Documents”). Capitalized terms used herein and not
defined herein shall have the meaning set forth in the Loan

Documents.

Subject to the terms hereof, effective as of the “Effective Date” (as defined below) the Loan
Documents are hereby amended as follows:

	 	(a)  	The “Maturity Date” of the WCMA Line of Credit is hereby extended to March 31, 2006.
	 
	 	(b)  	The “Line Fee” for the period ending March 31, 2006, shall be $15,000.00. Customer hereby
authorizes and directs MLBFS to charge said amount to WCMA Account No. 81V-07064 on or at any time
after the Effective Date. Once paid, Line Fees are non-refundable.
	 
	 	(c)  	So long as there are any Obligations, the aggregate cash and unencumbered marketable securities
and other financial assets directly owned and controlled by Continucare Corporation shall at all
times exceed $1,000,000.00.
	 
	 	(d)  	The “Unconditional Guaranty” dated March 18, 2003 between Phillip Frost and MLBFS shall be
deemed released and terminated.

Except as expressly amended hereby, the Loan Documents shall continue in full force and effect upon
all of their terms and conditions.

Customer acknowledges, warrants and agrees, as a primary inducement to MLBFS to enter into this
Agreement, that: (a) no Default or Event of Default has occurred and is continuing under the Loan
Documents; (b) each of the warranties of Customer in the Loan Documents are true and correct as of
the date hereof and shall be deemed remade as of the date hereof; (c) Customer does not have any
claim against MLBFS or any of its affiliates arising out of or in connection with the Loan
Documents or any other matter whatsoever; and (d) Customer does not have any defense to payment of
any amounts owing, or any right of counterclaim for any reason under, the Loan Documents.

 

 

MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC.

Continucare Corporation

March 18, 2005

Page No. 2

Provided that no Event of Default, or event which with the giving of notice, passage of time, or
both, would constitute an Event of Default, shall then have occurred and be continuing under the
terms of the Loan Documents, the amendments and agreements in this Letter Agreement will become
effective on the date (the “Effective Date”) upon which: (a) Customer shall have executed and
returned the duplicate copy of this Letter Agreement enclosed herewith; and (b) an officer of MLBFS
shall have reviewed and approved this Letter Agreement as being consistent in all respects with the
original internal authorization hereof.

Notwithstanding the foregoing, if Customer does not execute and return the duplicate copy of this
Letter Agreement within 14 days from the date hereof, or if for any other reason (other than the
sole fault of MLBFS) the Effective Date shall not occur within said 14-day period, then all of said
amendments and agreements will, at the sole option of MLBFS, be void.

Very truly yours,

Merrill Lynch Business Financial Services Inc.

	 	 	 	 	 
	 	 
	 	By:  	/s/ Thomas Lee
 	 
	 	Thomas Lee 	 
	 	Team Leader 	 
	 

Accepted:

Continucare Corporation

By: /s/ Fernando L. Fernandez

Printed Name: Fernando L. Fernandez

		
	Title: 	Senior Vice President – Finance, Chief Financial

Officer and TreasurerCONSULTING AGREEMENT

 

Exhibit 10.2

CONSULTING AGREEMENT

     THIS CONSULTING AGREEMENT is entered into as of May 4, 2005, by and between CONTINUCARE
CORPORATION (the “Company”) and PATRICK M. HEALY (“Healy”).

     WHEREAS, Healy is employed by the Company as its Executive Vice President of Operations and
serves on the Board of Directors of the Company; and

     WHEREAS, Healy is, with the Company’s consent, voluntarily resigning his position as Executive
Vice President of Operations and a director of the Company, effective as of the date hereof (the
“Separation Date”); and

     WHEREAS, Healy and the Company desire to enter into this Consulting Agreement to set forth
their agreement with respect to such termination and certain other matters.

     NOW, THEREFORE, in consideration of the agreements and covenants hereinafter set forth, the
parties agree as follows:

1. Termination. Effective as of the Separation Date, Healy hereby voluntarily resigns his
employment with the Company. From and after the Separation Date, except as provided in this
Agreement, Healy will not have any further rights, whether to employment, compensation or benefits
from the Company or any of its subsidiaries. Effective as of the Separation Date, Healy also
hereby resigns from the Company’s Board of Directors and from all other positions and directorships
that Healy may hold with the Company or any of its subsidiaries. For a period of twelve (12) months
after the Separation Date (the “Consulting Period”), Healy (the “Consultant”) will remain available
to the Company to provide and will provide on a consulting basis such transition and other
assistance as the Company may reasonably request (the “Consulting Services”). The Company and
Healy will work together in good faith to ensure that any Consulting Services that the Company may
request Healy to perform do not unreasonably hinder his ability to seek other employment or
interfere with any other employment that he may undertake.

2. Compensation. In consideration for Healy’s compliance with all of the other terms and
conditions of this Agreement, the Company will pay to Healy the following compensation:

     2.1. Base Compensation. The Company will pay to Healy: (a) a lump-sum cash payment
equal to any salary and vacation time that has accrued through the Separation Date payable within
fourteen (14) days after the Separation Date and (b) an aggregate amount of $225,000 payable in
installments during the Consulting Period. All such payments shall be payable in accordance with
the Company’s normal payroll practices and net of any applicable withholding taxes.

     2.2. Benefits. As a result of the termination of his employment, Healy will lose
eligibility to participate in the Company’s employee benefit plans. Further, Healy will lose
eligibility, for himself and his dependents, for coverage under the group health plan available to

 

 

the Company’s full-time employees (the “Group Health Plan”). However, the Company and Healy
acknowledge that Healy may elect to continue coverage under the Group Health Plan for himself and
his dependents under the federal health continuation requirements in Title X of the Consolidated
Omnibus Budget Reconciliation Act of 1985 (“COBRA”). Healy acknowledges receipt of the customary
notice from the Group Health Plan’s COBRA Administrator regarding (a) Healy’s change in employment
status, (b) his right to continue coverage under the Group Health Plan and (c) the procedure for
this election. If Healy desires to elect COBRA coverage, Healy will promptly after the Separation
Date take all action necessary to effectuate his election to continue coverage under COBRA. After
receiving Healy’s properly completed election form, the Group Health Plan’s COBRA Administrator
will enroll Healy and his dependents under “COBRA coverage” and will send Healy a statement on a
monthly basis showing the amount due for such coverage. For a period of twelve (12) months after
the date hereof, upon submission of appropriate supporting documentation to the Company in
accordance with the Company’s policies, the Company shall reimburse Healy for all applicable COBRA
premium payments for the continued coverage effective as of the Separation Date.

     2.3. Reimbursement of Expenses. Upon the submission of appropriate supporting
documentation to the Company in accordance with the Company’s policies, the Company shall reimburse
Healy for all business expenses reasonably and necessarily incurred by Healy in connection with his
employment by the Company prior to the Separation Date.

     2.4. Stock Options. Healy acknowledges that he holds currently vested stock options
(the “Vested Options”) to purchase 366,667 shares of the Common Stock, par value $.0001 per share
(the “Common Stock”), of the Company, which options were granted to him pursuant to the Company’s
1995 and 2000 Amended and Restated Stock Option Plans (each a “Stock Option Plan”). In accordance
with the terms of the Stock Option Plans, for a period of ninety (90) days following the Separation
Date, Healy will be permitted to exercise any Vested Options, but subject to and only to the extent
permitted by the terms of the Stock Option Plan under which such Vested Option was granted and, in
any case, subject to all of the terms of the applicable grant. Any stock options to purchase
shares of Common Stock held by Healy that are not Vested Options as of the Separation Date, will
terminate effective as of the Separation Date pursuant to the terms of the Stock Option Plans under
which such options were granted and from and after the Separation Date Healy will have no right to
exercise any such unvested options.

3. Restrictive Covenants.

     3.1. Confidentiality. Healy acknowledges that during his employment with the Company
he has had and, as a result of his provision of consulting services to the Company, may continue to
have, access to confidential information, trade secrets, confidential processes and confidential
“know-how” relating to, or concerned with, the past, present, or future business, finances,
services, programs, patients, employees, suppliers, and policies of the Company and its affiliates
(“Proprietary Information”). Healy agrees that he will not, directly or indirectly use, divulge,
furnish or make accessible any Proprietary Information to any other person or entity without the
prior written consent of the Company.

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     3.2. Return of Company Property. Healy covenants and agrees that he has returned to
the Company all software, computers, equipment, reports, affidavits, analyses, evaluations, patient
records and information, agreements, manuals, industry lists, statistical records, computer
printouts, books of account, records, invoices and other documents in whatever form (whether in
human readable or machine readable form) owned by the Company or any of its subsidiaries or
reflecting the Company’s or its subsidiaries’ business operations including, without limitation,
any of the foregoing embodying or summarizing any Proprietary Information (collectively, “Company
Property”). Healy represents that he has not copied, printed, summarized or compiled, and that
after the date hereof he will not copy, print, summarize or compile, any Company Property and will
not after the Separation Date retain in his possession any Company Property.

     3.3. Non-Disparagement And Future Conduct. Healy and the Company each agree that from
and after the Separation Date they each will not make any comments, either written or oral, which
could be construed as negative concerning the other or, with respect to the Company, any of the
Company’s subsidiaries or any of the Company’s or its subsidiaries’ respective directors, officers,
personnel, shareholders, facilities, services or programs. The Company and Healy will work together
in good faith in connection with any statements concerning the termination of Healy’s employment to
present a united view of an amicable parting of their ways in connection with Healy’s voluntary
resignation.

     3.4. Injunction. It is recognized and hereby acknowledged by the parties that a
breach of the above paragraph 3 will cause irreparable harm and damage to the Company, the monetary
amount of which may be virtually impossible to ascertain. As a result, the parties recognize and
hereby acknowledge that Company shall be entitled to an injunction from any court of competent
jurisdiction enjoining and restraining any violation of any or all of the covenants contained in
paragraph 3 of this Agreement by Healy. The imposition of an injunction pursuant to this paragraph
3.4 does not in any way limit a damage claim or any other claim that the Company may have against
Healy.

4. General Release.

     4.1. Release. Healy does hereby release and discharge the Company and each of its
subsidiaries and each of their respective directors, officers, personnel, and agents (the “Released
Parties”) from any and all claims, demands or liabilities whatsoever, whether known or unknown,
which Healy ever had or may now have against any Released Party, from the beginning of time to the
Separation Date, including, without limitation, any claims, demands or liabilities in connection
with Healy’s employment or service as a director of the Company, including wrongful discharge,
breach of express or implied contract, unpaid wages, breach of a covenant of good faith and fair
dealing, constructive discharge or pursuant to any federal, state, or local employment laws,
regulations, or executive orders prohibiting inter alia, age, race, sex, national
origin, religion, handicap, and disability discrimination or retaliation, such as Title VII of the
Civil Rights Act of 1964, the Civil Rights Act of 1866, Employee Retirement Income Security Act of
1974, the Americans with Disabilities Act of 1990, the Rehabilitation Act of 1973, the Worker
Adjustment Retraining Notification Act, the Immigration Reform and Control Act, the Family and
Medical Leave Act, the Federal Constitution; and any and all other federal,

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state, and local laws and regulations prohibiting, without limitation, conspiracy, intentional
and/or negligent infliction of emotional distress, defamation, misrepresentation or fraud,
negligence, negligent supervision, hiring, or retention, assault, battery, detrimental reliance, or
any other offense. The foregoing release will not waive rights or claims that may arise under this
Agreement. Healy has not assigned or otherwise conveyed any of his right in and to any claims of
the types set forth above.

     4.2. OWBPA Provisions. Pursuant to the provisions of the Older Workers Benefit
Protection Act (“OWBPA”), which applies to Healy’s waiver of rights under the Age Discrimination in
Employment Act, Healy has had a period of at least twenty-one (21) days within which to consider
whether to execute this release. Also pursuant to the OWBPA, Healy may revoke this release within
seven (7) days of its execution; provided that any revocation of this release by Healy shall
constitute a revocation of this Agreement in its entirety and this Agreement shall thereafter be of
no force or effect whatsoever and Healy shall have no right to any payment or compensation
hereunder. It is specifically understood that this release shall not become effective or
enforceable until the seven-day revocation period has expired. Consideration for this release will
not begin to be paid until the end of the Company’s next regular payroll cycle following the end of
the seven-day revocation period.

     4.3. Release Acknowledgements. Healy acknowledges that: (i) no consideration other
than as provided for by this Agreement has been or will be provided by the Released Parties, (ii)
he will make no claim and hereby waives any right he may now have or may hereafter have, based upon
any alleged oral modification of the foregoing release, and (iii) the foregoing release does not
constitute an admission of a violation of any law, order, regulation, or enactment, or of
wrongdoing of any kind by any Released Party.

5. Indemnification. The Company agrees to indemnify Healy in accordance with the Articles
of Incorporation and Bylaws of the Company from any and all costs, claims, judgment and litigation
costs of any kind or nature related to any matter that may be brought against Healy in connection
with his employment with the Company or his service on the Board of Directors of the Company.

6. Miscellaneous.

     6.1. This Agreement contains the entire understanding and agreement of the parties relating to
the subject matter hereof and supersedes all prior communications, commitments and understandings
and this Agreement may not be amended or modified except in a writing signed by both parties
hereto.

     6.2. This Agreement will be governed by the laws of the State of Florida without regard to the
conflicts of laws principles thereunder.

     6.3. If any action or proceeding is brought in any court by any party to enforce any provision
of this Agreement, the prevailing party shall be entitled to recover from the non-prevailing party
all of its reasonable costs and expenses incurred in connection with such action, including
reasonable attorneys’ fees and disbursements through and including all appeals.

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     6.4. This Agreement may be executed in counterparts, each of which will be considered an
original but which will constitute one and the same agreement.

     6.5. Each provision of this Agreement will be construed simply according to its fair meaning
and not strictly against the party causing it to have been drafted.

     6.6. In the event that any provision or portion of this Agreement is determined to be invalid
or unenforceable for any reason, the remaining provisions of this Agreement will be unaffected
thereby and will remain in full force and effect.

HEALY STATES THAT HE HAS CAREFULLY READ ALL THE PROVISIONS OF THIS AGREEMENT, THAT THEY HAVE BEEN
FULLY EXPLAINED TO HIM, THAT HE HAS HAD THE OPPORTUNITY TO HAVE THIS AGREEMENT REVIEWED BY AN
ATTORNEY, AND THAT HE FULLY UNDERSTANDS ITS FINAL AND BINDING EFFECT, AND THAT THE ONLY PROMISES
MADE TO HIM ARE THOSE STATED HEREIN, AND THAT HE IS SIGNING THIS AGREEMENT WITH THE FULL INTENT OF
RELEASING THE RELEASED PARTIES OF AND FROM ALL CLAIMS.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.

	 	 	 	 	 
	 	COMPANY:

CONTINUCARE CORPORATION

 	 
	 	By:  	/s/ Richard C. Pfenniger, Jr.
 	 
	 	 	Richard C. Pfenniger, Jr. 	 
	 	 	Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	 	 
	 	     /s/Patrick M. Healy
 	 
	 	Patrick M. Healy 	 
	 	 	 
	 

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