Document:

EXHIBIT
10.7

 

AMENDED
AND RESTATED EMPLOYMENT AGREEMENT

 

THIS
EMPLOYMENT AGREEMENT (the
“Agreement”) is
made and entered into on this 3rd day of
January 2005, by and between METROPOLITAN HEALTH NETWORKS, INC., a Florida
corporation (the “Company”), and
ROBERTO L. PALENZUELA (hereinafter called the “Executive”).

 

R
E C I T A L S

 

A.  The
Company and the Executive are parties to that certain employment agreement dated
March 8, 2004 (the “Original
Employment Agreement”).

 

B.  The
Company and the Executive desire to amend and restate the Original Employment
Agreement, in its entirety, as set forth herein.

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the premises and mutual covenants set forth
herein, the parties agree as follows:

 

1.    Employment.

 

1.1   Employment
and Term. The
Company hereby agrees to employ the Executive and the Executive hereby agrees to
serve the Company on the terms and conditions set forth herein.

 

1.2   Duties
of Executive. During
the Term of Employment (as defined herein) under this Agreement, the Executive
shall serve as the Chairman & Chief Executive Officer of the Company, shall
diligently perform all services as may be assigned to her by the Board of
Directors of the Company (the “Board”)
(provided that, such services shall not materially differ from the services
currently provided by the Executive), and shall exercise such power and
authority as may from time to time be delegated to him by the Board. The
Executive shall devote his full time and attention to the business and affairs
of the Company, render such services to the best of his ability, and use his
best efforts to promote the interests of the Company. It shall not be a
violation of this Agreement for the Executive to (i) serve on corporate, civic
or charitable boards or committees, (ii) deliver lectures, fulfill speaking
engagements or teach at educational institutions, or (iii) manage personal
investments, so long as such activities do not significantly interfere with the
performance of the Executive’s responsibilities to the Company in accordance
with this Agreement.

 

2.    Term.

 

2.1   Initial
Term. The
initial Term of Employment under this Agreement, and the employment of the
Executive hereunder, shall commence on the date set forth above (the
“Commencement
Date”) and
shall expire on the date that is one (1) year after the
Commencement Date, unless sooner terminated in accordance with Section 5 hereof
(the “Initial
Term”).

 

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2.2   Renewal
Terms. At the
end of the Initial Term, the Term of Employment shall automatically renew for
successive one (1) year terms, unless earlier terminated as provided in Section
5 hereof.

 

2.3   Term
of Employment and Expiration Date. The
period during which the Executive shall be employed by the Company pursuant to
the terms of this Agreement is sometimes referred to in this Agreement as the
“Term
of Employment”, and
the date on which the Term of Employment shall expire (including the date on
which any renewal term shall expire), is sometimes referred to in this Agreement
as the “Expiration Date”.

 

3.    Compensation.

 

3.1   Base
Salary. The
Executive shall receive a base salary at the annual rate of $190,000.00 (the
“Base
Salary”) during
the Term of Employment, with such Base Salary payable in install-ments
consistent with the Company's normal payroll schedule, subject to applicable
withholding and other taxes. The Base Salary shall be reviewed, at least
annually, for merit increases and may, by action and in the sole discretion of
the Board, be increased at any time or from time to time.

 

3.2   Bonuses. During
the Term of Employment, the Executive shall be eligible to receive bonuses in
such amounts and at such times as the Board shall determine in its sole
discretion.

 

3.3   Automobile
and Telephone Expenses. The
Executive shall receive an automobile allowance of $500.00 per month. The
Company shall also provide the Executive with a mobile telephone allowance of
$100.00 per month.

 

4.    Expense
Reimbursement and Other Benefits.

 

4.1   Reimbursement
of Expenses. Upon
the submission of proper documentation by the Executive, and subject to such
rules and guidelines as the Company may from time to time adopt, the Company
shall reim-burse the Executive for all reasonable expenses actually paid or
incurred by the Executive during the Term of Employment in the course of and
pursuant to the business of the Company. The Executive shall account to the
Company in writing for all expenses for which reimbursement is sought and shall
supply to the Company copies of all relevant invoices, receipts or other
evidence reasonably requested by the Company.

 

4.2   Compensation/Benefit
Programs. During
the Term of Employment, the Executive shall be entitled to participate in all
medical, dental, hospitalization, accidental death and dismemberment,
disability, travel and life insur-ance plans, and any and all other plans as are
presently and here-inafter offered by the Company to its executives, including
savings, pension, profit-sharing and deferred compensation plans, subject to the
general eligibility and participation provisions set forth in such
plans.

 

4.3   Working
Facilities. During
the Term of Employment, the Company shall furnish the Executive with an office,
secretarial help and such other facilities and services suitable to his/her
position and adequate for the performance of his/her duties
hereunder.

 

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4.4   Stock
Options. During
the Term of Employment, the Executive may be eligible to be granted options (the
“Stock
Options”) to
purchase common stock (the “Common
Stock”) of the
Company under (and therefore subject to all terms and conditions of) the
Company’s Omnibus Equity Compensation Plan, as amended from time to time, and
any successor plan thereto (the “Stock
Option Plan”) and
all rules of regulation of the Securities and Exchange Commission applicable to
stock option plans then in effect, in the sole discretion of the Board. The
number of Stock Options, if any, and the terms and conditions of any such Stock
Options, shall be determined by the Committee appointed pursuant to the Stock
Option Plan, or by the Board, in its sole discretion and pursuant to the Stock
Option Plan.

 

4.5   Other
Benefits. The
Executive shall be entitled to four (4) weeks of vacation each calendar year
during the Term of Employment (subject to the general eligibility provisions set
forth in the Company’s personnel policy), to be taken at such times as the
Executive and the Company shall mutually determine and provided that no vacation
time shall interfere with the duties required to be rendered by the Executive
hereunder. Any vacation time not taken by Executive during any calendar year may
be carried forward into any succeeding calendar year. The Executive shall
receive such additional benefits, if any, as the Board shall from time to time
determine.

 

5.    Termination.

 

5.1    Termination
for Cause. The
Company shall at all times have the right, upon written notice to the Executive,
to terminate the Term of Employment, for Cause. For purposes of this Agreement,
the term “Cause” shall
mean (i) an action or omission of the Executive which constitutes a willful and
material breach of, or failure or refusal (other than by reason of his
disability) to perform his duties under, this Agreement which is not cured
within fifteen (15) days after receipt by the Executive of written notice of
same, (ii) fraud, embezzlement, misappropriation of funds or breach of trust in
connection with his services hereunder, (iii) conviction of a felony or any
other crime which involves dishonesty or a breach of trust, or (iv) gross
negligence in connection with the performance of the Executive's duties
hereunder, which is not cured within fifteen (15) days after written receipt by
the Executive of written notice of same. Any termination for Cause shall be made
in writing to the Executive, which notice shall set forth in detail all acts or
omissions upon which the Company is relying for such termination. The Executive
shall have the right to address the Board regarding the acts set forth in the
notice of termination. Upon any termination pursuant to this Section 5.1, the
Company shall only be obligated to pay to the Executive his Base Salary to the
date of termination. The Company shall have no further liability hereunder
(other than for reimbursement for reasonable business expenses incurred prior to
the date of termination, subject, however, to the provisions of Section
4.1).

 

5.2    Termination
Without Cause. At any
time the Company shall have the right to terminate the Term of Employment by
written notice to the Executive. Upon any termination pursuant to this Section
5.2, or upon any termination pursuant to Section 5.3 or Section 5.4, (that is
not a termination under any of Sections 5.1, 5.5 or 5.6), the Company shall (i)
pay to the Executive any unpaid Base Salary through the effective date of
termination specified in such notice, (ii) continue to pay the Executive's
Base Salary for a period of twelve (12) months from notice of termination
hereunder (the “Continuation
Period”),
(iii) continue to provide the Executive with the benefits he/she was
receiving under Section 4.2 hereof (the “Benefits”)
through the end of the Continuation Period in the manner and at such times as
the Benefits otherwise would have been payable or provided to the Executive. In
the event that the Company is unable to provide the Executive with any Benefits
required hereunder by reason of the termination of the Executive's employment
pursuant to this Section 5.4, then the Company shall pay the Executive cash
equal to the value of the Benefit that otherwise would have accrued for the
Executive's benefit under the plan, for the period during which such Benefits
could not be provided under the plans. The Company's good faith determination of
the amount that would have been contributed or the value of any Benefits that
would have accrued under any plan shall be binding and conclusive on the
Executive. For this purpose, the Company may use as the value of any Benefit the
cost to the Company of providing that Benefit to the Executive. Further, the
vesting of the Executive's Stock Options, if any, shall be subject to the terms
of any option agreement(s) to which the Executive and the Company are parties.
The Company shall have no further liability hereunder (other than for (x)
reimbursement for reasonable business expenses incurred prior to the date of
termination, subject, however, to the provisions of Section 4.1, and (y) payment
of compensation for unused vacation days). For all purposes under this
Agreement, the failure by the Company to offer to renew the Agreement following
the expiration of the Initial Term or any Renewal Term on the same terms and
conditions hereunder shall be treated as if the Company terminated this
Agreement pursuant to this Section 5.2.

 

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5.3    Disability. The
Company shall at all times have the right, upon written notice to the Executive,
to terminate the Term of Employment, if the Executive shall become entitled to
benefits under the Company’s group disability policy or any individual
disability policy then in effect, or, if the Executive shall, as the result of
mental or physical incapacity, illness or disability, become unable to perform
his obligations hereunder for a period of 90 days in any 12-month period. The
Company shall have sole discretion based upon competent medical advice to
determine whether the Executive continues to be disabled. Any termination of the
Term of Employment by the Company pursuant to this Section 5.3 shall be deemed
to be a termination of the Executive without Cause, and, upon any such
termination pursuant to this Section 5.3, the Executive shall be entitled to the
compensation specified in Section 5.2 hereof. The Company shall have no further
liability hereunder (other than for reimbursement for reasonable business
expenses incurred prior to the date of termination, subject, however to the
provisions of Section 4.1).

 

5.4    Death. In the
event of the death of the Executive during the Term of Employment, the Executive
shall be deemed to have been terminated without Cause, and the Company shall pay
to the estate of the deceased Executive the compensation specified in Section
5.2 hereof. The Company shall have no further liability hereunder (other than
for reimbursement for reasonable business expenses incurred prior to the date of
the Executive's death, subject, however to the provisions of Section
4.1).

 

5.5    Termination
by Executive.

 

(a)    The
Executive shall at all times have the right, upon sixty (60) days written notice
to the Company, to terminate the Term of Employment. 

 

(b)    Upon
termination of the Term of Employment pursuant to this Section 5.5 (that is not
a termination under Section 5.6) by the Executive without Good Reason, the
Company shall pay to the Executive any unpaid Base Salary through the effective
date of termination specified in such notice. The Company shall have no further
liability hereunder (other than for reimbursement for reasonable business
expenses incurred prior to the date of termination, subject, however, to the
provisions of Section 4.1). At the Company's sole option, upon receipt of notice
from the Executive pursuant to this Section, the Company may immediately
terminate the Term of Employment, in which case, in addition to the covenants
set forth above, the Company shall pay the Executive sixty (60) days of Base
Salary.

 

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(c)    Upon
termination of the Term of Employment pursuant to this Section 5.5 (that is not
a termination under Section 5.6) by the Executive for Good Reason, the Company
shall pay to the Executive the same amounts that would have been payable by the
Company to the Executive under Section 5.2 of this Agreement if the Term of
Employment had been terminated by the Company without Cause. The Company shall
have no further liability hereunder.

 

(d)    For
purposes of this Agreement, “Good Reason” shall mean (i) the assignment to the
Executive of any duties or responsibilities inconsistent in any respect with the
Executive's position or a similar position in the Company or one of its
subsidiaries, as contemplated by Section 1.2 of this Agreement, or any other
action by the Company which results in a substantial and compelling diminution
in such position, authority, duties or responsi-bilities, excluding for this
purpose an isolated, insubstantial and inadvertent action not taken in bad faith
and which is remedied by the Company within fifteen (15) days after receipt of
notice thereof given by the Executive; (ii) any failure by the Company to comply
with any of the provisions of Article 3 or Section 4.2 of this Agreement, other
than an isolated, insubstantial and inadvertent failure not occurring in bad
faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Executive; (iii) the Company's requiring the Executive to
be based at any office or location outside of the area for which Executive was
originally hired to work except for travel reasonably required in the
performance of the Executive's responsibilities. For purposes of this Section
5.5(d), any good faith determina-tion of “Good Reason” made by the Board shall
be conclusive.

 

5.6    Change
in Control of the Company

 

(a)    In the
event that (i) a Change in Control (as defined in paragraph (b) of this Section
5.6) in the Company shall occur during the Term of Employment, and (ii) prior to
the later of the Expiration Date or one year after the date of the Change in
Control, either (x) the Term of Employment is terminated by the Company without
Cause, pursuant to Section 5.2 hereof or (y) the Executive terminates the Term
of Employment for Good Reason the Company shall (1) pay to the Executive any
unpaid Base Salary through the effective date of termination, (2) pay to the
Executive as a single lump sum payment, within 30 days of the termination of his
employment hereunder, a lump sum payment equal to the sum of (x) the Executive's
current annual Base Salary, plus any bonuses payable to the Executive pursuant
to and in accordance with Section 3.2 hereof, and the value of the annual fringe
benefits (based upon their cost to the Company) required to be provided to the
Executive under Sections 4.2 and 4.4 hereof, for the year immediately preceding
the year in which his employment terminates, plus (y) the value of the portion
of his benefits under any savings, pension, profit sharing or deferred
compensation plans that are forfeited under those plans by reason of the
termination of his employment hereunder. The Company shall have no further
liability hereunder (other than for (1) reimbursement for reasonable business
expenses incurred prior to the date of termination, subject, however, to the
provisions of Section 4.1, and (2) payment of compensation for unused vacation
days).

 

(b)    For
purposes of this Agreement, the term “Change
in Control” shall
mean:

 

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(i)    Approval
by the shareholders of the Company of (x) a reorganization, merger,
consolidation or other form of corporate transaction or series of transactions,
in each case, with respect to which persons who were the shareholders of the
Company immediately prior to such reorganization, merger or consolidation or
other transaction do not, immediately thereafter, own more than 50% of the
combined voting power entitled to vote generally in the election of directors of
the reorganized, merged or consolidated company’s then outstanding voting
securities, in substantially the same proportions as their ownership immediately
prior to such reorganization, merger, consolidation or other transaction, or (y)
a liquidation or dissolution of the Company or (z) the sale of all or
substantially all of the assets of the Company (unless such reorganization,
merger, consolidation or other corporate transaction, liquidation, dissolution
or sale is subsequently abandoned); or

 

(ii)    the
acquisition (other than from the Company) by any person, entity or “group”,
within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act, of more than 50% of either the then outstanding shares of the Company’s
common stock or the combined voting power of the Company's then outstanding
voting securities entitled to vote generally in the election of directors
(hereinafter referred to as the ownership of a “Controlling
Interest”)
excluding, for this purpose, any acquisitions by (1) the Company or its
respective Subsidiaries, (2) any person, entity or “group” that as of the
Commencement Date of this Agreement owns beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Securities Exchange Act) of a
Controlling Interest or (3) any employee benefit plan of the Company or its
respective Subsidiaries.

 

5.7    Resignation. Upon any
notice or termination of employment pursuant to this Article 5, the Executive
shall automatically and without further action be deemed to have resigned as an
officer, and if he or she was then serving as a director of the Company, as a
director, and if required by the Board, the Executive hereby agrees to
immediately execute a resignation letter to the Board.

 

5.8    Survival. The
provisions of this Article 5 shall survive the termination of this Agreement, as
applicable. 

 

6.    Restrictive
Covenants.

 

6.1    Non-competition. At all
times while the Executive is employed by the Company and for a one year period
after the termination of the Executive’s employment with the Company for any
reason (other than by the Company without Cause (as defined in Section 5.1
hereof) or by the Executive for Good Reason (as defined in Section 5.5(d)
hereof)), the Executive shall not, directly or indirectly, engage in or have any
interest in any sole proprietorship, partnership, corporation or business or any
other person or entity (whether as an employee, officer, director, partner,
agent, security holder, creditor, consultant or otherwise) that directly or
indirectly (or through any affiliated entity) engages in competition with the
Company (based on the business in which the Company was engaged or was actively
planning on being engaged as of the date of termination of the Executive’s
employment and in the geographic areas in which the Company operated or was
actively planning on operating as of date of termination of the Executive’s
employment); provided, that such provision shall not apply to the Executive's
ownership of common stock of the Company or the acquisition by the Executive,
solely as an investment, of securities of any issuer that is registered under
Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, and
that are listed or admitted for trading on any United States national securities
exchange or that are quoted on the National Association of Securities Dealers
Automated Quotations System, or any similar system or automated dissemination of
quotations of securities prices in common use, so long as the Executive does not
control, acquire a controlling interest in or become a member of a group which
exercises direct or indirect control or, more than five percent of any class of
capital stock of such corporation. 

 

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6.2    Nondisclosure. The
Executive shall not at any time divulge, communi-cate, use to the detriment of
the Company or for the benefit of any other person or persons, or misuse in any
way, any Confiden-tial Information (as hereinafter defined) pertaining to the
business of the Company. Any Confidential Information or data now or hereafter
acquired by the Executive with respect to the business of the Company (which
shall include, but not be limited to, information concerning the Company's
financial condition, prospects, technology, customers, suppliers, sources of
leads and methods of doing business) shall be deemed a valuable, special and
unique asset of the Company that is received by the Executive in confidence and
as a fiduciary, and the Executive shall remain a fidu-ciary to the Company with
respect to all of such information. For purposes of this Agreement,
“Confidential
Information” means
information disclosed to the Executive or known by the Executive as a
consequence of or through his employment by the Company (including information
conceived, originated, discovered or developed by the Executive) prior to or
after the date hereof, and not generally known, about the Company or its
business. Notwithstanding the foregoing, nothing herein shall be deemed to
restrict the Executive from disclosing Confidential Information to the extent
required by law.

 

6.3    Nonsolicitation
of Executives and Clients. At all
times while the Executive is employed by the Company and for a two (2) year
period after the termination of the Executive’s employment with the Company for
any reason, the Executive shall not, directly or indirectly, for himself or for
any other person, firm, corporation, partnership, association or other entity
(a) employ or attempt to employ or enter into any contractual arrangement
with any employee or former employee of the Company, unless such employee or
former employee has not been employed by the Company for a period in excess of
six months, and/or (b) call on or solicit any of the actual or targeted
prospective clients of the Company on behalf of any person or entity in
connection with any business competitive with the business of the Company, nor
shall the Executive make known the names and addresses of such clients or any
information relating in any manner to the Company's trade or business
relationships with such customers, other than in connection with the performance
of Executive's duties under this Agreement.

 

6.4    Ownership
of Developments. All
copyrights, patents, trade secrets, or other intellectual property rights
associated with any ideas, concepts, techniques, inventions, processes, or works
of authorship developed or created by Executive during the course of performing
work for the Company or its clients (collectively, the “Work
Product”) shall
belong exclusively to the Company and shall, to the extent possible, be
considered a work made by the Executive for hire for the Company within the
meaning of Title 17 of the United States Code. To the extent the Work Product
may not be considered work made by the Executive for hire for the Company, the
Executive agrees to assign, and automatically assign at the time of creation of
the Work Product, without any requirement of further consideration, any right,
title, or interest the Executive may have in such Work Product. Upon the request
of the Company, the Executive shall take such further actions, including
execution and delivery of instruments of conveyance, as may be appropriate to
give full and proper effect to such assignment.

 

6.5    Books
and Records. All
books, records, and accounts relating in any manner to the customers or clients
of the Company, whether prepared by the Exe-cutive or other-wise coming into the
Executive's posses-sion, shall be the exclusive property of the Company and
shall be returned immediately to the Company on termination of the Executive's
employment hereunder or on the Company's request at any time.

 

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6.6    Definition
of Company. Solely
for purposes of this Article 6, the term “Company” also shall include any
existing or future subsidiaries of the Company that are operating during the
time periods described herein and any other entities that directly or
indirectly, through one or more intermediaries, control, are controlled by, or
are under common control with, the Company during the periods described
herein.

 

6.7    Acknowledgment
by Executive. The
Executive acknowledges and confirms that (a) the restrictive covenants contained
in this Article 6 are reasonably necessary to protect the legitimate business
interests of the Company, and (b) the restrictions contained in this Article 6
(including without limitation the length of the term of the provisions of this
Article 6) are not overbroad, overlong, or unfair and are not the result of
overreaching, duress or coercion of any kind. The Executive further acknowledges
and confirms that his full, uninhibited and faithful observance of each of the
covenants contained in this Article 6 will not cause him any undue hardship,
financial or otherwise, and that enforcement of each of the covenants contained
herein will not impair his ability to obtain employment commensurate with his
abilities and on terms fully acceptable to him or otherwise to obtain income
required for the comfortable support of him and his family and the satisfaction
of the needs of his creditors. The Executive acknowledges and confirms that his
special knowledge of the business of the Company is such as would cause the
Company serious injury or loss if he were to use such ability and knowledge to
the benefit of a competitor or were to compete with the Company in violation of
the terms of this Article 6. The Executive further acknowledges that the
restrictions contained in this Article 6 are intended to be, and shall be, for
the benefit of and shall be enforceable by, the Company’s successors and
assigns.

 

6.8    Reformation
by Court. In the
event that a court of competent jurisdiction shall determine that any provision
of this Article 6 is invalid or more restrictive than permitted under the
governing law of such jurisdiction, then only as to enforcement of this Article
6 within the jurisdiction of such court, such provision shall be interpreted and
enforced as if it provided for the maximum restriction permitted under such
governing law.

 

6.9    Extension
of Time. If the
Executive shall be in violation of any provision of this Article 6, then each
time limitation set forth in this Article 6 shall be extended for a period of
time equal to the period of time during which such violation or violations
occur. If the Company seeks injunctive relief from such violation in any court,
then the covenants set forth in this Article 6 shall be extended for a period of
time equal to the pendency of such proceeding including all appeals by the
Executive.

 

6.10    Survival. The
provisions of this Article 6 shall survive the termination of this Agreement, as
applicable.

 

7.    Injunction. It is
recognized and hereby acknowl--edged by the parties hereto that a breach by the
Executive of any of the covenants contained in Article 6 of this Agreement will
cause irreparable harm and damage to the Company, the monetary amount of which
may be virtually impossible to ascertain. As a result, the Executive recognizes
and hereby acknowledges that the Company shall be entitled to an injunction from
any court of competent juris-diction enjoining and restraining any violation of
any or all of the covenants contained in Article 6 of this Agree-ment by the
Executive or any of his affiliates, associates, partners or agents, either
directly or indirectly, and that such right to injunction shall be cumulative
and in addition to whatever other remedies the Company may possess.

 

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8.    Assignment. Neither
party shall have the right to assign or delegate his rights or obligations
hereunder, or any portion thereof, to any other person.

 

9.    Governing
Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Florida.

 

10.   Section
162(m) Limits.
Notwithstanding any other provision of this Agreement to the contrary, if and to
the extent that any remuneration payable by the Company to the Executive for any
year would exceed the maximum amount of remuneration that the Company may deduct
for that year under Section 162(m) (“Section
162(m)”) of the
Internal Revenue Code of 1986, as amended (the “Code”),
payment of the portion of the remuneration for that year that would not be so
deductible under Section 162(m) shall, in the sole discretion of the Board, be
deferred and become payable at such time or times as the Board determines that
it first would be deductible by the Company under Section 162(m), with interest
at the “short-term applicable rate” as such term is defined in Section 1274(d)
of the Code. The limitation set forth under this Section 10 shall not apply with
respect to any amounts payable to the Executive pursuant to Article 5
hereof.

 

11.   Entire
Agreement. This
Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and, upon its effectiveness, shall
supersede all prior agreements, understandings and arrangements, both oral and
written, between the Executive and the Company (or any of its affiliates) with
respect to such subject matter, including, without limitation, the Original
Employment Agreement. This Agreement may not be modified in any way unless by a
written instrument signed by both the Company and the Executive.

 

12.   Notices: All
notices required or permitted to be given hereunder shall be in writing and
shall be personally delivered by courier, sent by registered or certified mail,
return receipt requested or sent by confirmed facsimile transmission addressed
as set forth herein. Notices personally delivered, sent by facsimile or sent by
overnight courier shall be deemed given on the date of delivery and notices
mailed in accordance with the foregoing shall be deemed given upon the earlier
of receipt by the addressee, as evidenced by the return receipt thereof, or
three (3) days after deposit in the U.S. mail. Notice shall be sent (i) if
to the Company, addressed to Metropolitan Health Networks, Inc., 250 South
Australian Avenue, Suite 400, West Palm Beach, Florida 33401, Attn: Roberto L.
Palenzuela, General Counsel, and (ii) if to the Executive, to his address
as reflected on the payroll records of the Company, or to such other address as
either party hereto may from time to time give notice of to the
other.

 

13.   Benefits;
Binding Effect. This
Agreement shall be for the benefit of and binding upon the parties hereto and
their respective heirs, personal representatives, legal representa-tives,
successors and, where applicable, assigns, including, without limitation, any
successor to the Company, whether by merger, consolidation, sale of stock, sale
of assets or otherwise. 

 

14.   Severability. The
invalidity of any one or more of the words, phrases, sentences, clauses or
sections contained in this Agreement shall not affect the enforceability of the
remain-ing portions of this Agreement or any part thereof, all of which are
inserted conditionally on their being valid in law, and, in the event that any
one or more of the words, phrases, sentences, clauses or sections contained in
this Agreement shall be declared invalid, this Agreement shall be construed as
if such invalid word or words, phrase or phrases, sentence or sentences, clause
or clauses, or section or sections had not been inserted. If such invalidity is
caused by length of time or size of area, or both, the otherwise invalid
provision will be considered to be reduced to a period or area which would cure
such invalidity.

 

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15.    Waivers. The
waiver by either party hereto of a breach or violation of any term or provision
of this Agreement shall not operate nor be construed as a waiver of any
subsequent breach or violation.

 

16.    Damages. Nothing
contained herein shall be con-strued to prevent the Company or the Executive
from seeking and recover-ing from the other damages sustained by either or both
of them as a result of its or his breach of any term or provision of this
Agreement. In the event that either party hereto brings suit for the collection
of any damages resulting from, or the injunction of any action constituting, a
breach of any of the terms or pro-visions of this Agreement, then the party
found to be at fault shall pay all reasonable court costs and attorneys' fees of
the other.

 

17.    Section
Headings. The
section headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement.

 

18.    No
Third Party Beneficiary. Nothing
expressed or implied in this Agreement is intended, or shall be construed, to
confer upon or give any person other than the Company, the parties hereto and
their respective heirs, personal representatives, legal represen-tatives,
successors and assigns, any rights or remedies under or by reason of this
Agreement.

 

 

 

[signature
page follows]

 

-10-

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

 

	 	 	 
	 	COMPANY:
	 	 
	 	 METROPOLITAN HEALTH NETWORKS,
      INC.
	 
 	 
 	 
 
		By:  	/s/ Michael M.
    Earley
	 	
      

      Michael M. Earley
	 	Chairman & Chief Executive
      Officer

 

		 	 
	 	THE
      EXECUTIVE:
	 
 	 
 	 
 
		By:  	/s/ Roberto L.
      Palenzuela
	 	
      

      Roberto L. Palenzuela

 

-11-EXHIBIT
10.8

 

AMENDED
AND RESTATED EMPLOYMENT AGREEMENT

 

THIS
EMPLOYMENT AGREEMENT (the
“Agreement”) is
made and entered into on this 3rd day of
January 2005, by and between METROPOLITAN HEALTH NETWORKS, INC., a Florida
corporation (the “Company”), and
DEBRA A. FINNEL (hereinafter called the “Executive”).

 

R
E C I T A L S

 

A.  The
Company and the Executive are parties to that certain employment agreement dated
January 1, 2001 (the “Original
Employment Agreement”).

 

B.  The
Company and the Executive desire to amend and restate the Original Employment
Agreement, in its entirety, as set forth herein.

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the premises and mutual covenants set forth
herein, the parties agree as follows:

 

1.    Employment.

 

1.1    Employment
and Term. The
Company hereby agrees to employ the Executive and the Executive hereby agrees to
serve the Company on the terms and conditions set forth herein.

 

1.2    Duties
of Executive. During
the Term of Employment (as defined herein) under this Agreement, the Executive
shall serve as the President & Chief Operating Officer of the Company, shall
diligently perform all services as may be assigned to her by the Board of
Directors of the Company (the “Board”)
(provided that, such services shall not materially differ from the services
currently provided by the Executive), and shall exercise such power and
authority as may from time to time be delegated to him by the Board. The
Executive shall devote his full time and attention to the business and affairs
of the Company, render such services to the best of his ability, and use his
best efforts to promote the interests of the Company. It shall not be a
violation of this Agreement for the Executive to (i) serve on corporate, civic
or charitable boards or committees, (ii) deliver lectures, fulfill speaking
engagements or teach at educational institutions, or (iii) manage personal
investments, so long as such activities do not significantly interfere with the
performance of the Executive’s responsibilities to the Company in accordance
with this Agreement.

 

2.    Term.

 

2.1    Initial
Term. The
initial Term of Employment under this Agreement, and the employment of the
Executive hereunder, shall commence on the date set forth above (the
“Commencement
Date”) and
shall expire on the date that is one (1) year after the
Commencement Date, unless sooner terminated in accordance with Section 5 hereof
(the “Initial
Term”).

 

-1-

2.2    Renewal
Terms. At the
end of the Initial Term, the Term of Employment shall automatically renew for
successive one (1) year terms, unless earlier terminated as provided in Section
5 hereof.

 

2.3    Term
of Employment and Expiration Date. The
period during which the Executive shall be employed by the Company pursuant to
the terms of this Agreement is sometimes referred to in this Agreement as the
“Term
of Employment”, and
the date on which the Term of Employment shall expire (including the date on
which any renewal term shall expire), is sometimes referred to in this Agreement
as the “Expiration Date”.

 

3.    Compensation.

 

3.1    Base
Salary. The
Executive shall receive a base salary at the annual rate of $300,000.00 (the
“Base
Salary”) during
the Term of Employment, with such Base Salary payable in install-ments
consistent with the Company's normal payroll schedule, subject to applicable
withholding and other taxes. The Base Salary shall be reviewed, at least
annually, for merit increases and may, by action and in the sole discretion of
the Board, be increased at any time or from time to time.

 

3.2    Bonuses. During
the Term of Employment, the Executive shall be eligible to receive bonuses in
such amounts and at such times as the Board shall determine in its sole
discretion.

 

3.3    Automobile
and Telephone Expenses. The
Executive shall receive an automobile allowance of $1,500.00 per month. The
Company shall also provide the Executive with a mobile telephone allowance of
$250.00 per month.

 

4.    Expense
Reimbursement and Other Benefits.

 

4.1    Reimbursement
of Expenses. Upon
the submission of proper documentation by the Executive, and subject to such
rules and guidelines as the Company may from time to time adopt, the Company
shall reim-burse the Executive for all reasonable expenses actually paid or
incurred by the Executive during the Term of Employment in the course of and
pursuant to the business of the Company. The Executive shall account to the
Company in writing for all expenses for which reimbursement is sought and shall
supply to the Company copies of all relevant invoices, receipts or other
evidence reasonably requested by the Company.

 

4.2    Compensation/Benefit
Programs. During
the Term of Employment, the Executive shall be entitled to participate in all
medical, dental, hospitalization, accidental death and dismemberment,
disability, travel and life insur-ance plans, and any and all other plans as are
presently and here-inafter offered by the Company to its executives, including
savings, pension, profit-sharing and deferred compensation plans, subject to the
general eligibility and participation provisions set forth in such
plans.

 

4.3    Working
Facilities. During
the Term of Employment, the Company shall furnish the Executive with an office,
secretarial help and such other facilities and services suitable to his/her
position and adequate for the performance of his/her duties
hereunder.

 

-2-

4.4    Stock
Options. During
the Term of Employment, the Executive may be eligible to be granted options (the
“Stock
Options”) to
purchase common stock (the “Common
Stock”) of the
Company under (and therefore subject to all terms and conditions of) the
Company’s Omnibus Equity Compensation Plan, as amended from time to time, and
any successor plan thereto (the “Stock
Option Plan”) and
all rules of regulation of the Securities and Exchange Commission applicable to
stock option plans then in effect, in the sole discretion of the Board. The
number of Stock Options, if any, and the terms and conditions of any such Stock
Options, shall be determined by the Committee appointed pursuant to the Stock
Option Plan, or by the Board, in its sole discretion and pursuant to the Stock
Option Plan.

 

4.5    Other
Benefits. The
Executive shall be entitled to four (4) weeks of vacation each calendar year
during the Term of Employment (subject to the general eligibility provisions set
forth in the Company’s personnel policy), to be taken at such times as the
Executive and the Company shall mutually determine and provided that no vacation
time shall interfere with the duties required to be rendered by the Executive
hereunder. Any vacation time not taken by Executive during any calendar year may
be carried forward into any succeeding calendar year. The Executive shall
receive such additional benefits, if any, as the Board shall from time to time
determine.

 

5.    Termination.

 

5.1    Termination
for Cause. The
Company shall at all times have the right, upon written notice to the Executive,
to terminate the Term of Employment, for Cause. For purposes of this Agreement,
the term “Cause” shall
mean (i) an action or omission of the Executive which constitutes a willful and
material breach of, or failure or refusal (other than by reason of his
disability) to perform his duties under, this Agreement which is not cured
within fifteen (15) days after receipt by the Executive of written notice of
same, (ii) fraud, embezzlement, misappropriation of funds or breach of trust in
connection with his services hereunder, (iii) conviction of a felony or any
other crime which involves dishonesty or a breach of trust, or (iv) gross
negligence in connection with the performance of the Executive's duties
hereunder, which is not cured within fifteen (15) days after written receipt by
the Executive of written notice of same. Any termination for Cause shall be made
in writing to the Executive, which notice shall set forth in detail all acts or
omissions upon which the Company is relying for such termination. The Executive
shall have the right to address the Board regarding the acts set forth in the
notice of termination. Upon any termination pursuant to this Section 5.1, the
Company shall only be obligated to pay to the Executive his Base Salary to the
date of termination. The Company shall have no further liability hereunder
(other than for reimbursement for reasonable business expenses incurred prior to
the date of termination, subject, however, to the provisions of Section
4.1).

 

5.2    Termination
Without Cause. At any
time the Company shall have the right to terminate the Term of Employment by
written notice to the Executive. Upon any termination pursuant to this Section
5.2, or upon any termination pursuant to Section 5.3 or Section 5.4, (that is
not a termination under any of Sections 5.1, 5.5 or 5.6), the Company shall (i)
pay to the Executive any unpaid Base Salary through the effective date of
termination specified in such notice, (ii) continue to pay the Executive's
Base Salary for a period of twelve (12) months from notice of termination
hereunder (the “Continuation
Period”),
(iii) continue to provide the Executive with the benefits he/she was
receiving under Section 4.2 hereof (the “Benefits”)
through the end of the Continuation Period in the manner and at such times as
the Benefits otherwise would have been payable or provided to the Executive. In
the event that the Company is unable to provide the Executive with any Benefits
required hereunder by reason of the termination of the Executive's employment
pursuant to this Section 5.4, then the Company shall pay the Executive cash
equal to the value of the Benefit that otherwise would have accrued for the
Executive's benefit under the plan, for the period during which such Benefits
could not be provided under the plans. The Company's good faith determination of
the amount that would have been contributed or the value of any Benefits that
would have accrued under any plan shall be binding and conclusive on the
Executive. For this purpose, the Company may use as the value of any Benefit the
cost to the Company of providing that Benefit to the Executive. Further, the
vesting of the Executive's Stock Options, if any, shall be subject to the terms
of any option agreement(s) to which the Executive and the Company are parties.
The Company shall have no further liability hereunder (other than for (x)
reimbursement for reasonable business expenses incurred prior to the date of
termination, subject, however, to the provisions of Section 4.1, and (y) payment
of compensation for unused vacation days). For all purposes under this
Agreement, the failure by the Company to offer to renew the Agreement following
the expiration of the Initial Term or any Renewal Term on the same terms and
conditions hereunder shall be treated as if the Company terminated this
Agreement pursuant to this Section 5.2.

 

-3-

5.3    Disability. The
Company shall at all times have the right, upon written notice to the Executive,
to terminate the Term of Employment, if the Executive shall become entitled to
benefits under the Company’s group disability policy or any individual
disability policy then in effect, or, if the Executive shall, as the result of
mental or physical incapacity, illness or disability, become unable to perform
his obligations hereunder for a period of 90 days in any 12-month period. The
Company shall have sole discretion based upon competent medical advice to
determine whether the Executive continues to be disabled. Any termination of the
Term of Employment by the Company pursuant to this Section 5.3 shall be deemed
to be a termination of the Executive without Cause, and, upon any such
termination pursuant to this Section 5.3, the Executive shall be entitled to the
compensation specified in Section 5.2 hereof; provided,
however, that the
Continuation Period applicable to the Executive upon a termination pursuant to
this Section 5.3 shall be twenty-four (24) months. The Company shall have no
further liability hereunder (other than for reimbursement for reasonable
business expenses incurred prior to the date of termination, subject, however to
the provisions of Section 4.1).

 

5.4    Death. In the
event of the death of the Executive during the Term of Employment, the Executive
shall be deemed to have been terminated without Cause, and the Company shall pay
to the estate of the deceased Executive the compensation specified in Section
5.2 hereof; provided,
however, that the
Continuation Period applicable to the Executive upon a termination pursuant to
this Section 5.4 shall be twenty-four (24) months. The Company shall have no
further liability hereunder (other than for reimbursement for reasonable
business expenses incurred prior to the date of the Executive's death, subject,
however to the provisions of Section 4.1).

 

5.5    Termination
by Executive.

 

(a)    The
Executive shall at all times have the right, upon sixty (60) days written notice
to the Company, to terminate the Term of Employment. 

 

(b)    Upon
termination of the Term of Employment pursuant to this Section 5.5 (that is not
a termination under Section 5.6) by the Executive without Good Reason, the
Company shall pay to the Executive any unpaid Base Salary through the effective
date of termination specified in such notice. The Company shall have no further
liability hereunder (other than for reimbursement for reasonable business
expenses incurred prior to the date of termination, subject, however, to the
provisions of Section 4.1). At the Company's sole option, upon receipt of notice
from the Executive pursuant to this Section, the Company may immediately
terminate the Term of Employment, in which case, in addition to the covenants
set forth above, the Company shall pay the Executive sixty (60) days of Base
Salary.

 

-4-

(c)    Upon
termination of the Term of Employment pursuant to this Section 5.5 (that is not
a termination under Section 5.6) by the Executive for Good Reason, the Company
shall pay to the Executive the same amounts that would have been payable by the
Company to the Executive under Section 5.2 of this Agreement if the Term of
Employment had been terminated by the Company without Cause. The Company shall
have no further liability hereunder.

 

(d)    For
purposes of this Agreement, “Good Reason” shall mean (i) the assignment to the
Executive of any duties or responsibilities inconsistent in any respect with the
Executive's position or a similar position in the Company or one of its
subsidiaries, as contemplated by Section 1.2 of this Agreement, or any other
action by the Company which results in a substantial and compelling diminution
in such position, authority, duties or responsi-bilities, excluding for this
purpose an isolated, insubstantial and inadvertent action not taken in bad faith
and which is remedied by the Company within fifteen (15) days after receipt of
notice thereof given by the Executive; (ii) any failure by the Company to comply
with any of the provisions of Article 3 or Section 4.2 of this Agreement, other
than an isolated, insubstantial and inadvertent failure not occurring in bad
faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Executive; (iii) the Company's requiring the Executive to
be based at any office or location outside of the area for which Executive was
originally hired to work except for travel reasonably required in the
performance of the Executive's responsibilities. For purposes of this Section
5.5(d), any good faith determina-tion of “Good Reason” made by the Board shall
be conclusive.

 

5.6    Change
in Control of the Company

 

(a)    In the
event that (i) a Change in Control (as defined in paragraph (b) of this Section
5.6) in the Company shall occur during the Term of Employment, and (ii) prior to
the later of the Expiration Date or one year after the date of the Change in
Control, either (x) the Term of Employment is terminated by the Company without
Cause, pursuant to Section 5.2 hereof or (y) the Executive terminates the Term
of Employment for Good Reason the Company shall (1) pay to the Executive any
unpaid Base Salary through the effective date of termination, (2) pay to the
Executive as a single lump sum payment, within 30 days of the termination of his
employment hereunder, a lump sum payment equal to the sum of (x) the Executive's
current annual Base Salary, plus any bonuses payable to the Executive pursuant
to and in accordance with Section 3.2 hereof, and the value of the annual fringe
benefits (based upon their cost to the Company) required to be provided to the
Executive under Sections 4.2 and 4.4 hereof, for the year immediately preceding
the year in which his employment terminates, plus (y) the value of the portion
of his benefits under any savings, pension, profit sharing or deferred
compensation plans that are forfeited under those plans by reason of the
termination of his employment hereunder. The Company shall have no further
liability hereunder (other than for (1) reimbursement for reasonable business
expenses incurred prior to the date of termination, subject, however, to the
provisions of Section 4.1, and (2) payment of compensation for unused vacation
days).

 

(b)    For
purposes of this Agreement, the term “Change
in Control” shall
mean:

 

-5-

(i)    Approval
by the shareholders of the Company of (x) a reorganization, merger,
consolidation or other form of corporate transaction or series of transactions,
in each case, with respect to which persons who were the shareholders of the
Company immediately prior to such reorganization, merger or consolidation or
other transaction do not, immediately thereafter, own more than 50% of the
combined voting power entitled to vote generally in the election of directors of
the reorganized, merged or consolidated company’s then outstanding voting
securities, in substantially the same proportions as their ownership immediately
prior to such reorganization, merger, consolidation or other transaction, or (y)
a liquidation or dissolution of the Company or (z) the sale of all or
substantially all of the assets of the Company (unless such reorganization,
merger, consolidation or other corporate transaction, liquidation, dissolution
or sale is subsequently abandoned); or

 

(ii)    the
acquisition (other than from the Company) by any person, entity or “group”,
within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act, of more than 50% of either the then outstanding shares of the Company’s
common stock or the combined voting power of the Company's then outstanding
voting securities entitled to vote generally in the election of directors
(hereinafter referred to as the ownership of a “Controlling
Interest”)
excluding, for this purpose, any acquisitions by (1) the Company or its
respective Subsidiaries, (2) any person, entity or “group” that as of the
Commencement Date of this Agreement owns beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Securities Exchange Act) of a
Controlling Interest or (3) any employee benefit plan of the Company or its
respective Subsidiaries.

 

5.7    Resignation. Upon any
notice or termination of employment pursuant to this Article 5, the Executive
shall automatically and without further action be deemed to have resigned as an
officer, and if he or she was then serving as a director of the Company, as a
director, and if required by the Board, the Executive hereby agrees to
immediately execute a resignation letter to the Board.

 

5.8    Survival. The
provisions of this Article 5 shall survive the termination of this Agreement, as
applicable. 

 

6.    Restrictive
Covenants.

 

6.1    Non-competition. At all
times while the Executive is employed by the Company and for a one year period
after the termination of the Executive’s employment with the Company for any
reason (other than by the Company without Cause (as defined in Section 5.1
hereof) or by the Executive for Good Reason (as defined in Section 5.5(d)
hereof)), the Executive shall not, directly or indirectly, engage in or have any
interest in any sole proprietorship, partnership, corporation or business or any
other person or entity (whether as an employee, officer, director, partner,
agent, security holder, creditor, consultant or otherwise) that directly or
indirectly (or through any affiliated entity) engages in competition with the
Company (based on the business in which the Company was engaged or was actively
planning on being engaged as of the date of termination of the Executive’s
employment and in the geographic areas in which the Company operated or was
actively planning on operating as of date of termination of the Executive’s
employment); provided, that such provision shall not apply to the Executive's
ownership of common stock of the Company or the acquisition by the Executive,
solely as an investment, of securities of any issuer that is registered under
Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, and
that are listed or admitted for trading on any United States national securities
exchange or that are quoted on the National Association of Securities Dealers
Automated Quotations System, or any similar system or automated dissemination of
quotations of securities prices in common use, so long as the Executive does not
control, acquire a controlling interest in or become a member of a group which
exercises direct or indirect control or, more than five percent of any class of
capital stock of such corporation. 

 

-6-

6.2    Nondisclosure. The
Executive shall not at any time divulge, communi-cate, use to the detriment of
the Company or for the benefit of any other person or persons, or misuse in any
way, any Confiden-tial Information (as hereinafter defined) pertaining to the
business of the Company. Any Confidential Information or data now or hereafter
acquired by the Executive with respect to the business of the Company (which
shall include, but not be limited to, information concerning the Company's
financial condition, prospects, technology, customers, suppliers, sources of
leads and methods of doing business) shall be deemed a valuable, special and
unique asset of the Company that is received by the Executive in confidence and
as a fiduciary, and the Executive shall remain a fidu-ciary to the Company with
respect to all of such information. For purposes of this Agreement,
“Confidential
Information” means
information disclosed to the Executive or known by the Executive as a
consequence of or through his employment by the Company (including information
conceived, originated, discovered or developed by the Executive) prior to or
after the date hereof, and not generally known, about the Company or its
business. Notwithstanding the foregoing, nothing herein shall be deemed to
restrict the Executive from disclosing Confidential Information to the extent
required by state or federal law or regulation.

 

6.3    Nonsolicitation
of Executives and Clients. At all
times while the Executive is employed by the Company and for a one (1) year
period after the termination of the Executive’s employment with the Company for
any reason, the Executive shall not, directly or indirectly, for himself or for
any other person, firm, corporation, partnership, association or other entity
(a) employ or attempt to employ or enter into any contractual arrangement
with any employee or former employee of the Company, unless such employee or
former employee has not been employed by the Company for a period in excess of
six months, and/or (b) call on or solicit any of the actual or targeted
prospective clients of the Company on behalf of any person or entity in
connection with any business competitive with the business of the Company, nor
shall the Executive make known the names and addresses of such clients or any
information relating in any manner to the Company's trade or business
relationships with such customers, other than in connection with the performance
of Executive's duties under this Agreement.

 

6.4    Ownership
of Developments. All
copyrights, patents, trade secrets, or other intellectual property rights
associated with any ideas, concepts, techniques, inventions, processes, or works
of authorship developed or created by Executive during the course of performing
work for the Company or its clients (collectively, the “Work
Product”) shall
belong exclusively to the Company and shall, to the extent possible, be
considered a work made by the Executive for hire for the Company within the
meaning of Title 17 of the United States Code. To the extent the Work Product
may not be considered work made by the Executive for hire for the Company, the
Executive agrees to assign, and automatically assign at the time of creation of
the Work Product, without any requirement of further consideration, any right,
title, or interest the Executive may have in such Work Product. Upon the request
of the Company, the Executive shall take such further actions, including
execution and delivery of instruments of conveyance, as may be appropriate to
give full and proper effect to such assignment.

 

6.5    Books
and Records. All
books, records, and accounts relating in any manner to the customers or clients
of the Company, whether prepared by the Exe-cutive or other-wise coming into the
Executive's posses-sion, shall be the exclusive property of the Company and
shall be returned immediately to the Company on termination of the Executive's
employment hereunder or on the Company's request at any time.

 

-7-

6.6    Definition
of Company. Solely
for purposes of this Article 6, the term “Company” also shall include any
existing or future subsidiaries of the Company that are operating during the
time periods described herein and any other entities that directly or
indirectly, through one or more intermediaries, control, are controlled by, or
are under common control with, the Company during the periods described
herein.

 

6.7    Acknowledgment
by Executive. The
Executive acknowledges and confirms that (a) the restrictive covenants contained
in this Article 6 are reasonably necessary to protect the legitimate business
interests of the Company, and (b) the restrictions contained in this Article 6
(including without limitation the length of the term of the provisions of this
Article 6) are not overbroad, overlong, or unfair and are not the result of
overreaching, duress or coercion of any kind. The Executive further acknowledges
and confirms that his full, uninhibited and faithful observance of each of the
covenants contained in this Article 6 will not cause him any undue hardship,
financial or otherwise, and that enforcement of each of the covenants contained
herein will not impair his ability to obtain employment commensurate with his
abilities and on terms fully acceptable to him or otherwise to obtain income
required for the comfortable support of him and his family and the satisfaction
of the needs of his creditors. The Executive acknowledges and confirms that his
special knowledge of the business of the Company is such as would cause the
Company serious injury or loss if he were to use such ability and knowledge to
the benefit of a competitor or were to compete with the Company in violation of
the terms of this Article 6. The Executive further acknowledges that the
restrictions contained in this Article 6 are intended to be, and shall be, for
the benefit of and shall be enforceable by, the Company’s successors and
assigns.

 

6.8    Reformation
by Court. In the
event that a court of competent jurisdiction shall determine that any provision
of this Article 6 is invalid or more restrictive than permitted under the
governing law of such jurisdiction, then only as to enforcement of this Article
6 within the jurisdiction of such court, such provision shall be interpreted and
enforced as if it provided for the maximum restriction permitted under such
governing law.

 

6.9    Extension
of Time. If the
Executive shall be in violation of any provision of this Article 6, then each
time limitation set forth in this Article 6 shall be extended for a period of
time equal to the period of time during which such violation or violations
occur. If the Company seeks injunctive relief from such violation in any court,
then the covenants set forth in this Article 6 shall be extended for a period of
time equal to the pendency of such proceeding including all appeals by the
Executive.

 

6.10    Survival. The
provisions of this Article 6 shall survive the termination of this Agreement, as
applicable.

 

7.    Injunction. It is
recognized and hereby acknowl--edged by the parties hereto that a breach by the
Executive of any of the covenants contained in Article 6 of this Agreement will
cause irreparable harm and damage to the Company, the monetary amount of which
may be virtually impossible to ascertain. As a result, the Executive recognizes
and hereby acknowledges that the Company shall be entitled to an injunction from
any court of competent juris-diction enjoining and restraining any violation of
any or all of the covenants contained in Article 6 of this Agree-ment by the
Executive or any of his affiliates, associates, partners or agents, either
directly or indirectly, and that such right to injunction shall be cumulative
and in addition to whatever other remedies the Company may possess.

 

-8-

8.    Assignment. Neither
party shall have the right to assign or delegate his rights or obligations
hereunder, or any portion thereof, to any other person.

 

9.    Governing
Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Florida.

 

10.   Section
162(m) Limits.
Notwithstanding any other provision of this Agreement to the contrary, if and to
the extent that any remuneration payable by the Company to the Executive for any
year would exceed the maximum amount of remuneration that the Company may deduct
for that year under Section 162(m) (“Section
162(m)”) of the
Internal Revenue Code of 1986, as amended (the “Code”),
payment of the portion of the remuneration for that year that would not be so
deductible under Section 162(m) shall, in the sole discretion of the Board, be
deferred and become payable at such time or times as the Board determines that
it first would be deductible by the Company under Section 162(m), with interest
at the “short-term applicable rate” as such term is defined in Section 1274(d)
of the Code. The limitation set forth under this Section 10 shall not apply with
respect to any amounts payable to the Executive pursuant to Article 5
hereof.

 

11.   Entire
Agreement. This
Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and, upon its effectiveness, shall
supersede all prior agreements, understandings and arrangements, both oral and
written, between the Executive and the Company (or any of its affiliates) with
respect to such subject matter, including, without limitation, the Original
Employment Agreement. This Agreement may not be modified in any way unless by a
written instrument signed by both the Company and the Executive.

 

12.   Notices: All
notices required or permitted to be given hereunder shall be in writing and
shall be personally delivered by courier, sent by registered or certified mail,
return receipt requested or sent by confirmed facsimile transmission addressed
as set forth herein. Notices personally delivered, sent by facsimile or sent by
overnight courier shall be deemed given on the date of delivery and notices
mailed in accordance with the foregoing shall be deemed given upon the earlier
of receipt by the addressee, as evidenced by the return receipt thereof, or
three (3) days after deposit in the U.S. mail. Notice shall be sent (i) if
to the Company, addressed to Metropolitan Health Networks, Inc., 250 South
Australian Avenue, Suite 400, West Palm Beach, Florida 33401, Attn: Roberto L.
Palenzuela, General Counsel, and (ii) if to the Executive, to his address
as reflected on the payroll records of the Company, or to such other address as
either party hereto may from time to time give notice of to the
other.

 

13.   Benefits;
Binding Effect. This
Agreement shall be for the benefit of and binding upon the parties hereto and
their respective heirs, personal representatives, legal representa-tives,
successors and, where applicable, assigns, including, without limitation, any
successor to the Company, whether by merger, consolidation, sale of stock, sale
of assets or otherwise. 

 

14.   Severability. The
invalidity of any one or more of the words, phrases, sentences, clauses or
sections contained in this Agreement shall not affect the enforceability of the
remain-ing portions of this Agreement or any part thereof, all of which are
inserted conditionally on their being valid in law, and, in the event that any
one or more of the words, phrases, sentences, clauses or sections contained in
this Agreement shall be declared invalid, this Agreement shall be construed as
if such invalid word or words, phrase or phrases, sentence or sentences, clause
or clauses, or section or sections had not been inserted. If such invalidity is
caused by length of time or size of area, or both, the otherwise invalid
provision will be considered to be reduced to a period or area which would cure
such invalidity.

 

-9-

15.    Waivers. The
waiver by either party hereto of a breach or violation of any term or provision
of this Agreement shall not operate nor be construed as a waiver of any
subsequent breach or violation.

 

16.    Damages. Nothing
contained herein shall be con-strued to prevent the Company or the Executive
from seeking and recover-ing from the other damages sustained by either or both
of them as a result of its or his breach of any term or provision of this
Agreement. In the event that either party hereto brings suit for the collection
of any damages resulting from, or the injunction of any action constituting, a
breach of any of the terms or pro-visions of this Agreement, then the party
found to be at fault shall pay all reasonable court costs and attorneys' fees of
the other.

 

17.    Section
Headings. The
section headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement.

 

18.    No
Third Party Beneficiary. Nothing
expressed or implied in this Agreement is intended, or shall be construed, to
confer upon or give any person other than the Company, the parties hereto and
their respective heirs, personal representatives, legal represen-tatives,
successors and assigns, any rights or remedies under or by reason of this
Agreement.

 

 

 

[signature
page follows]

 

-10-

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

 

	 	 	 
	 	COMPANY:
	 	 
	 	METROPOLITAN HEALTH NETWORKS,
      INC.
	 
 	 
 	 
 
	 	By:  	/s/ Michael M.
    Earley
	 	
      

      Michael M. Earley
	 	Chairman & Chief Executive
      Officer

 

	 	 	 
	 	THE
      EXECUTIVE:
	 
 	 
 	 
 
		By:  	/s/ Debra A.
  Finnel
	 	
      

      Debra A. Finnel
	 	

 

-11-

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