1 EXHIBIT 10.13 PROMISSORY NOTE $775,000.00 September 1, 1996 Cookeville, Tennessee FOR VALUE RECEIVED, David N. Birman, M.D., a Tennessee resident ("Maker"), promises to pay to Birman Managed Care, Inc., a Tennessee corporation ("Payee"), at such place as Payee from time to time may designate in writing to Maker, the principal sum of Seven Hundred Seventy-Five Thousand ($775,000.00). The principal balance hereof shall bear interest at a rate (computed on the basis of a 360-day year and actual days elapsed) equal to the rate of interest announced or published publicly on the first day of each month from time to time by American National Bank and Trust Company of Chicago as its prime or base rate of interest, adjusting on the first day of each month. All amounts payable hereunder shall be payable to Payee, at the option of Maker, in lawful currency of the United States or in common stock of Payee owned by Maker and tendered by Payee for redemption. The value of any common stock of Payee tendered by Maker shall be determined based upon a price per share determined as follows: On or prior to January 31, 1997, at a price per share equal to the initial public offering price of the common stock registered by the Payee with the Securities and Exchange Commission on Form SB-2; and after January 31, 1997, at a price per share equal to 92% of the average closing bid price of the common stock as reported by NASDAQ over the previous 20 consecutive trading days immediately preceding the Payment Date (as hereinafter defined). 1. PAYMENTS. Subject to paragraph 2 below, interest on the principal balance shall be due and payable in three (3) equal annual payments, payable on the 31st day of August, commencing August 31, 1997 (the "Payment Date"). The principal balance shall be due and payable in full on August 31, 1999. 2. DEFAULT. If Maker shall fail to properly pay any sum due hereunder when due, Maker shall thereupon be in default under the terms of this Promissory Note. 3. ACCELERATION AND OTHER REMEDIES. If Maker is in default under the terms of this Promissory Note and if such default remains uncured for a period of ten (10) days after receipt of written notice thereof to Maker, then the entire then unpaid principal balance and interest hereof shall be immediately due and payable without further act or notice by Payee. 4. WAIVERS. Except as set forth herein, each of Maker and all other parties now or hereafter liable for the payment hereof, whether as endorser, guarantor, surety or otherwise, hereby waives diligence, demand, grace, presentment for payment, protest and notice of protest and notice of extension. No delay or omission on the part of Payee in exercising any right hereunder shall constitute a waiver of any such right or of any other right hereunder. A waiver on any one occasion shall not be construed to bar the exercise, or to constitute a waiver of any such right on any future occasion. 2 5. APPLICABLE LAW. THIS PROMISSORY NOTE SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TENNESSEE, NOTWITHSTANDING ANY CONFLICT-OF-LAW RULES TO THE CONTRARY. 6. PREPAYMENT. Maker may prepay all or any portion of the interest and the unpaid principal balance of this Promissory Note at any time, or from time to time, without penalty or premium. Any prepayment shall first be credited to interest, and then to principal, in the inverse order of maturity. 7. COLLECTION COSTS AND EXPENSES. If this Promissory Note shall be placed in the hands of an attorney for collection, by suit or otherwise, then Maker's obligations hereunder shall include the payment of all collection costs and expenses incurred by Payee in connection therewith, including, without limitation, reasonable attorneys' fees and costs. 8. NOTICE. Any notice or other communication with respect to this Promissory Note shall (a) be in writing; (b) be effective on the date of hand delivery thereof to the party to whom directed, one day following the date of deposit thereof with delivery charges prepaid, with a national overnight delivery service, or three days following the date of deposit thereof with postage prepaid, with the United States Postal Service, by regular first class, certified or registered mail. EXECUTED as of the date first set forth above. By: -------------------------------- David N. Birman, M.D.