UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of earliest event reported: December 1, 1995
------------------------------------------
UCI Medical Affiliates, Inc.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Delaware 0-13265 59-2225346
(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.)
</TABLE>
6168 St. Andrews Road, Columbia, South Carolina 29212
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (803) 772-8840
-----------------------
No Change
(Former name or former address, if changed since last report.)
1
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Pursuant to the terms of an Asset Purchase Agreement dated December 1, 1995 and
executed December 1, 1995 (the "Contract") by and between Robert G. Mann, M.D.
P.A., (the "Seller") and UCI Medical Affiliates of South Carolina, Inc., a South
Carolina corporation (the "Company") and the wholly-owned subsidiary of UCI
Medical Affiliates, Inc., a Delaware corporation ("UCI"), the Company has
acquired certain assets of (including patient list and goodwill) associated with
the medical practice owned and operated by the Seller in Greenville, South
Carolina for a purchase price of $300,000, consisting of a $30,000 Promissory
Note (the "Note") ; 60,000 shares of common stock of UCI and cash of $30,000.
The consideration paid by the Company in connection with this acquisition was
determined by arms-length negotiations between the Company and the Seller.
The practice operated by the Seller was one at which medical conditions not
involving an immediate threat to life were treated on an outpatient basis.
Currently, the Company expects to continue the operations of the practice in
substantially the same manner as they were conducted prior to the acquisition.
All descriptions of the Asset Purchase Agreement and the Note noted herein are
qualified in their entirety by reference to such documents as Exhibits to this
Current Report on Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
a) Financial Statements of Business Acquired
The financial statements for R.G. Mann, M.D., P.A., the business
acquired by the wholly-owned subsidiary of the Company, are
included in this report beginning on page number 3.
b) Pro Forma Financial Information
The pro forma financial information for R.G. Mann, M.D., P.A., the
business acquired by the wholly-owned subsidiary of the Company,
is included in this report following the financial information
included herein in response to Item 7(a) above.
c) Exhibits
Exhibit 2 - Asset Purchase Agreement dated and executed on
December 1, 1995 by and between Robert G. Mann, M.D., P.A., and
UCI Medical Affiliates of South Carolina, Inc.
Exhibit 10.1 - Promissory Note dated and executed on December 1,
1995 given by UCI Medical Affiliates of South Carolina,
Inc. to Robert G. Mann, M.D., P.A.
2
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UCI Medical Affiliates, Inc.
CONTENTS
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Page
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R.G. Mann, M.D., P.A. Financial Statements as of November 30, 1995...................................4-12
UCI Medical Affiliates, Inc. Pro Forma Combining Financial Statements
Combining Balance Sheet at September 30, 1995................................................... 13
Notes to Combining Balance Sheet................................................................ 14
Combining Statement of Operations and Accumulated Deficit
for year ended September 30, 1995............................................................ 15
Notes to Combining Statement of Operations...................................................... 16
</TABLE>
3
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Report of Independent Accountants
Board of Directors
UCI Medical Affiliates, Inc.
We have audited the accompanying balance sheets of R.G. Mann, M.D., P.A. as of
November 30,1995 and December 31, 1994 and the related statements of operations,
stockholder's capital, and cash flows for the periods then ended. These
financial statements are the responsibility of management. Our responsibility is
to express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statements presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of R.G. Mann, M.D., P.A. as of
November 30, 1995 and December 31, 1994 and the results of its operations and
its cash flows for the periods then ended in conformity with generally accepted
accounting principles.
The financial statements have been prepared solely from the accounts of R.G.
Mann, M.D., P.A. and do not include the personal accounts of the stockholder or
those of any other operations in which he may be engaged.
Columbia, South Carolina
December 20, 1995
The original signed opinion is on file with UCI Medical Affiliates, Inc.
4
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R.G. Mann, M.D., P.A.
Balance Sheets
November 30, 1995 and December 31, 1994
<TABLE>
<CAPTION>
1995 1994
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<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ -- $ 1,945
Accounts receivable, net of allowance for doubtful accounts of
$36,403 in 1995 and $25,922 in 1994 21,182 15,219
-------- --------
Total current assets 21,182 17,164
Cash surrender value of life insurance policy -- 51,119
Office and equipment, net 20,353 28,062
Other assets -- 2,345
-------- --------
20,353 81,526
-------- --------
Total assets $ 41,535 $ 98,690
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY Current liabilities:
Accounts payable, and accrued expenses $ 20,552 $ 12,132
Current portion of long-term payables 624 6,347
-------- --------
Total current liabilities 21,176 18,479
Loan payable to stockholder 8,503 --
Loans collateralized by life insurance policy -- 44,861
Long-term payables -- 17,235
-------- --------
Total liabilities 29,679 80,575
-------- --------
Stockholder's equity
Capital stock, 100,000 shares authorized; 1,000 1,000 1,000
shares issued and outstanding
Retained earnings 10,856 17,115
-------- --------
Stockholder's equity 11,856 18,115
-------- --------
Total liabilities and stockholder's equity $ 41,535 $ 98,690
======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
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R.G. Mann, M.D., P.A.
Statements of Operations and Changes in Stockholder's Equity
For the eleven months ended November 30, 1995 and the year ended
December 31, 1994
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<CAPTION>
1995 1994
------------------ ------------------
<S> <C> <C>
Net medical revenue $ 288,753 $ 294,632
Operating costs 122,007 131,743
------------------ ------------------
Operating margin 166,746 162,889
General and administrative expenses 167,007 155,639
Depreciation and amortization 5,777 8,262
------------------ ------------------
Loss from operations (6,038) (1,012)
Interest expense, net (221) (7,481)
------------------ ------------------
Net loss (6,259) (8,493)
Retained earning, beginning of year 17,115 25,608
------------------ ------------------
Retained earning, end of year $ 10,856 $ 17,115
================== ==================
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
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R.G. Mann, M.D., P.A.
Statements of Cash Flows
For the eleven months ended November 30, 1995 and the year ended
December 31, 1994
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<CAPTION>
1995 1994
------------------ ------------------
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OPERATING ACTIVITIES:
Net loss $ (6,259) $ (8,493)
Adjustments to reconcile net income to cash provided by
operating activities:
Depreciation and amortization 5,777 8,262
Provision for bad debts 10,481 1,091
Changes in operating assets and liabilities:
Accounts receivable (16,444) (1,508)
Other assets -- (130)
Accounts payable and accrued expenses 8,420 807
------------------ ------------------
Cash provided by operating activities 1,975 29
INVESTING ACTIVITIES:
Increase in cash surrender value of life insurance -- (4,085)
Purchases of property and equipment, net -- (1,948)
------------------ ------------------
Cash used by investing activities -- (6,033)
FINANCING ACTIVITIES:
Proceeds from loans collateralized by life insurance policy
-- 12,550
Payments on long-term payables (3,920) (4,601)
------------------ ------------------
Cash used in financing activities (3,920) 7,949
Net increase (decrease) in cash and cash equivalents (1,945) 1,945
Cash and cash equivalents, beginning of year (1,945) --
================== ==================
Cash and cash equivalents, end of year $ -- $ 1,945
================== ==================
Supplemental cash flow information:
Cash paid for interest $ 784 $ 6,722
================== ==================
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
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R.G. Mann, M.D., P.A.
Notes to Financial Statements
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
R.G. Mann, MD is the sole stockholder of R.G. Mann, M.D., P.A. (the "P.A.")
located in Greenville, South Carolina. The P.A. operates a family practice
medical office that provides treatments on an outpatient basis for medical
conditions not involving an immediate threat to life.
The financial statements have been prepared solely from the accounts of the P.A.
and do not include the personal accounts of R.G. Mann, MD or those of any other
activities in which he may be engaged. Management makes estimates that are a
necessary part of the preparation of financial statements. These estimates
include the useful lives of equipment, some of which is subject to technological
obsolescence, and the net realizable value of patient accounts receivable. At
November 30, 1995, management is not aware of any conditions that could
significantly affect the estimates employed in the preparation of the financial
statements.
ACCOUNTS RECEIVABLE
Accounts receivable represent amounts due from patients, employers and various
third-party payors. Provisions for uncollectable amounts are made based on
management's estimates of future collectibility and historical payment
percentages.
OFFICE AND EQUIPMENT
Office and equipment is reported at cost. Depreciation for financial reporting
purposes is computed principally by the straight-line method over the estimated
useful lives of the assets, ranging from five to seven years. Maintenance,
repairs and minor renewals are charged to expense. Major renewals or
betterments, which prolong the life of the assets, are capitalized. Upon
disposal of depreciable property, the asset accounts are reduced by the related
cost and accumulated depreciation. The resulting gains and losses are reflected
in the statements of operations.
8
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R.G. Mann, M.D., P.A.
Notes to Financial Statements
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES
As provided by the Internal Revenue Code, the P.A. has elected S Corporation
status. Under this election, net income from the Company is reported in the
stockholder's individual federal and state income tax returns along with the
stockholder's other items of income and expense for the period. The P.A. is not
a taxpaying entity for purposes of federal and state income taxation.
Accordingly, provisions for income taxes have not been recorded in the P.A.'s
financial statements.
CASH EQUIVALENTS
The P.A. considers all short-term debt investments with a maturity of three
months or less at the date of acquisition to be cash equivalents.
Supplemental disclosure of non-cash investing and financing activities:
In 1995, the P.A. transferred certain transportation equipment, prepaid assets
and the cash surrender value of a life insurance policy in consideration for his
assuming a loan collateralized by the cash value of the insurance policy and a
long term payable to a vendor. Additionally, in 1995, Dr. Mann assumed the
obligation to pay the remaining long - term liabilities of the P.A. in exchange
for a note payable to Dr. Mann. The aggregate amount of these two transfers were
$55,417 and $8,503, respectively. In 1994, the P.A. capitalized prepaid interest
of $501 on the loan collateralized by the cash value of the life insurance
policy.
FAIR VALUE OF FINANCIAL INVESTMENTS
The fair value of accounts receivable and accrued expenses payable are estimated
by management to approximate their respective carrying values.
9
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R.G. Mann, M.D., P.A.
Notes to Financial Statements
2. OFFICE AND MEDICAL EQUIPMENT
Office and medical equipment consists of the following at November 30, 1995 and
December 31, 1994:
<TABLE>
<CAPTION>
1995 1994
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<S> <C> <C>
Office and medical equipment $ 26,663 $ 26,663
Leasehold improvements 18,284 18,284
Transportation equipment -- 9,315
Furniture and fixtures 6,596 6,596
------------------- --------------------
51,543 60,858
Less, accumulated depreciation and amortization 31,190 32,796
------------------- --------------------
$ 20,353 $ 28,062
=================== ====================
</TABLE>
At November 30, 1995 and December 31, 1994, the cost of equipment under capital
leases was $18,650 and accumulated amortization thereon was $9,631 and $7,188,
respectively. Amortization of assets under capital lease is reported in
depreciation and amortization.
3. DESCRIPTION OF LEASING ARRANGEMENTS
The P.A. leases certain medical equipment under capital leases expiring in
March, 1996. At the end of the lease terms, the P.A. is generally transferred
title to the leased equipment or, in some cases, the payment of a fee
representing residual value is required.
At November 30, 1995, the remaining lease payments and interest thereon total
$624.00.
The P.A. leases office space under an operating lease expiring on December 1,
1995. The P.A. believes the lease on the office spaces may be renewed under
substantially the same terms at that time. Total rental expense was $9,950 and
$10,300 for the eleven months ended December 1, 1995 and the year ended December
31, 1994, respectively.
10
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R.G. Mann, M.D., P.A.
Notes to Financial Statements
4. RELATED PARTY TRANSACTIONS
R.G. Mann, MD, the sole stockholder, participates in the medical activities of
the P.A.. All payments for services and benefits to R.G. Mann, MD are recorded
as salaries and are included in cost of operations in the financial statements.
For the periods ended November 30, 1995 and December 31, 1994, amounts paid to
the stockholder were $91,000 and $75,000, respectively. At November 30, 1995,
the P.A. was indebted to the stockholder in the amount of $8,503. At and
December 31, 1994, the stockholder owed the P.A. $397.
On January 1, 1995, the P.A. transferred certain transportation equipment, a
life insurance policy, and certain other assets in exchange for certain current
and long-term liabilities the stockholder assumed. In November 1995, the P.A.
transferred to the stockholder the remaining long-term liabilities of the P.A.
in exchange for a note payable to the stockholder in the amount of $8,503.
5. CONCENTRATION OF CREDIT RISK
In the normal course of providing health care services, the Company extends
credit to patients in the Greenville, South Carolina area without requiring
collateral. Each individual's ability to pay balances due the Company is
assessed and reserves are established to provide for management's estimate of
uncollectable balances. Future revenues of the Company are largely dependent on
third-party payors and include Medicare and private insurance companies. The
amount of loss the Company would incur in the event of non-payment by the
counter party is the amount of the patient billing.
6. CONTINGENCIES
At November 30, 1995, management and its legal counsel are not aware of any
pending or threatened litigation, or unasserted claims against the P.A. that
could result in losses, if any, that would be material to the financial
statements.
11
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R.G. Mann, M.D., P.A.
Notes to Financial Statements
7. SUBSEQUENT EVENT
On December 1, 1995, UCI Medical Affiliates of South Carolina, Inc. ("UCI")
acquired certain office and medical equipment and substantially all the
Company's tangible personal property (including patient lists and goodwill) for
$300,000 consisting of $240,000 in restricted common stock of UCI and cash of
$60,000.
As a condition of the above transaction, R.G. Mann, MD entered into a 3 year
employment agreement with UCI.
12
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UCI MEDICAL AFFILIATES, INC.
PRO FORMA COMBINING BALANCE SHEET
SEPTEMBER 30, 1995
(UNAUDITED)
The following pro forma combining balance sheet is based on the individual
balance sheets of UCI Medical Affiliates, Inc. as of September 30, 1995 per the
Company's Annual Report and R.G. Mann, M.D.,P.A. as of November 30, 1995
appearing in item 7a of this filing. The information has been prepared to
reflect the acquisition by UCI Medical Affiliates, Inc. of R.G. Mann, M.D.,P.A
after giving effect to the pro forma adjustments described in Note 1. This
statement should be read in conjunction with each entity's financial statements
and footnotes.
<TABLE>
<CAPTION>
UCI Medical
Affiliates,
Inc. R.G. Mann, Pro Forma Pro Forma
M.D., P.A. Adjustments Combined
-------------- ----------------- --------------- ---------------
<S> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 76,513 $ -- $ (76,513) $ --
Accounts receivable - net 2,343,325 21,182 -- 2,364,507
Medical supplies inventory 265,068 -- -- 265,068
Deferred taxes 491,543 -- -- 491,543
Prepaids and other assets 282,060 -- -- 282,060
Goodwill 3,578,371 -- 241,816 (c) 3,820,187
Property, plant and
equipment, net 2,795,384 20,353 -- 2,815,737
Deferred taxes 120,639 -- -- 120,639
Other assets 262,768 -- -- 262,768
============== ================= =============== ===============
Total assets $ 10,215,671 $ 41,535 $ 165,303 $ 10,422,509
============== ================= =============== ===============
LIABILITIES
Current portion - long-term
debt $ 1,244,603 $ -- $ -- $ 1,244,603
Current portion - capital
lease -- 624 -- 624
Accounts payable 1,652,792 20,552 (20,552) (b) 1,686,279
Accrued payroll 498,791 -- 33,487 (a) 532,278
Other accrued liabilities 445,362 60,000 (d) 505,362
Long-term debt, net of
current 3,121,098 -- -- 3,121,098
Loans payable to stockholder
-- 8,503 (8,503) (b) --
(1,000) (e)
Common stock 175,408 1,000 600 (f) 176,008
Paid-in capital 9,694,256 -- 239,400 (f) 9,933,656
Accumulated earnings (10,856) (e)
(deficit) (6,616,639) 10,856 (127,273) (g) (6,743,912)
============== ================= =============== ===============
Total liabilities
and capital $ 10,215,671 $ 41,535 $ 165,303 $ 10,422,509
============== ================= =============== ===============
</TABLE>
13
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UCI MEDICAL AFFILIATES, INC.
NOTES TO PRO FORMA COMBINING BALANCE SHEET
SEPTEMBER 30, 1995
(UNAUDITED)
1. The pro forma combining balance sheet has been prepared to reflect the
acquisition of R.G. Mann, M.D.,P.A by UCI Medical Affiliates, Inc. for an
aggregate price of $300,624. The purchase occurred on December 1,1995. The
combining balance sheet reflects the year ended September 30, 1995. Pro forma
adjustments are made to reflect:
(a.) A net increase as a result of the following:
$ (110,000) increase in physician salaries
===================
$ (110,000)
===================
Assumed paid in cash ($76,513) and accrued as payroll liability
($33,487).
(b.) Accrued expenses of ($20,552) and loan payable to shareholder ($8,503) were
not acquired.
(c.) Excess of acquisition cost over the values of net assets acquired
(goodwill) less one year's amortization. ($259,089 goodwill less $17,273
amortization)
(d.) Accrual of $60,000 for cash to be paid in two parts, one at closing and the
other on April 1, 1996.
(e.) Changes in the P.A.'s equity as a result of adjustments on pro forma
statement of operations.
(f.) Issuance of restricted common shares valued at $240,000 at estimated per
share value of $4.00.
(g.) Effects of pro forma adjustments on statement of operations.
14
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UCI MEDICAL AFFILIATES, INC.
PRO FORMA STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
FOR THE YEAR ENDED SEPTEMBER 30, 1995
(UNAUDITED)
The following pro forma combining statement is based on the individual
statements of operations and accumulated deficit of UCI Medical Affiliates, Inc.
as of September 30, 1995 per the Company's Annual Report and R.G. Mann, M.D.,
P.A., as of November 30, 1995 appearing in item 7a of this filing. The
information has been prepared to reflect the acquisition by UCI Medical
Affiliates, Inc. of R.G. Mann, M.D., P.A., after giving effect to the pro forma
adjustments described in Note 1. This statement should be read in conjunction
with each entity's financial statements and footnotes.
<TABLE>
<CAPTION>
UCI Medical
Affiliates,
Inc. R.G. Mann, Pro Forma Pro Forma
M.D., P.A., Adjustments Combined
-------------- ----------------- --------------- ---------------
<S> <C> <C> <C> <C>
Revenue $ 17,987,147 $ 288,753 $ -- $ 18,275,900
Operating costs 18,180,080 122,007 110,000 (a) 18,412,087
-------------- ----------------- --------------- ---------------
Operating margin (192,933) 166,746 (110,000) (136,187)
General and administrative
expenses 87,616 167,007 -- 254,623
Depreciation and
amortization 579,224 5,777 17,273 (b) 602,274
-------------- ----------------- --------------- ---------------
Loss from operations (859,773) (6,038) (127,273) (993,084)
Interest expense, net 505,459 221 -- 505,680
Gain on equipment 5,493 -- -- 5,493
-------------- ----------------- --------------- ---------------
Loss before income tax (1,359,739) (6,259) (127,273) (1,493,271)
Benefit for income taxes -- -- -- --
-------------- ----------------- --------------- ---------------
Net loss (1,359,739) (6,259) (127,273) (1,493,271
Accumulated deficit -
beginning of year (5,256,896) 17,115 -- (5,239,781)
-------------- ----------------- --------------- ---------------
Accumulated deficit - end
of year $ (6,616,639) $ 10,856 $ (127,273) $ (6,733,056)
============== ================= =============== ===============
Earnings per common and common equivalent share:
Net income $ (.43) (c) $ (.47)
============== ================= =============== ===============
Weighted average shares of
common stock outstanding
3,136,544 (c) 3,196,544
============== ================= =============== ===============
</TABLE>
15
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UCI MEDICAL AFFILIATES, INC.
NOTE TO PRO FORMA COMBINING STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
FOR THE YEAR ENDED SEPTEMBER 30, 1995
(UNAUDITED)
1. The above statement gives effect to the following pro forma adjustments
necessary to reflect the acquisition outlined in Note 1 to the pro forma balance
sheet:
(a) Additional physician salary based on employment contract between R.G. Mann,
M.D. and UCI Medical Affiliates, Inc.
(b) Addition for amortization of goodwill on a straight line basis over 15
years.
(c) Not applicable, R.G. Mann M.D., P.A. was not required to, and did not,
compute earnings per share.
16
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SIGNATURES
Pursuant to the requirements of The Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
UCI Medical Affiliates, Inc.
(Registrant)
/s/ M.F. McFarland, III, M.D. /s/ Jerry F. Wells, Jr.
President, Chief Executive Officer and Chief Financial Officer
Chairman of the Board
Date: January 31, 1996
17
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UCI MEDICAL AFFILIATES, INC.
EXHIBIT INDEX
TO
FORM 8-K
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
<S> <C> <C> <C>
2 Asset Purchase Agreement dated and executed December 1, 19
1995 by and between Robert G. Mann, M.D., P.A. and
UCI Medical Affiliates of South Carolina, Inc.
10.1 Promissory Note dated and executed December 1, 1995 47
given by UCI Medical Affiliates of South Carolina, Inc.
to Robert G. Mann, M.D., P.A.
</TABLE>
18
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EXHIBIT NO. 2
ASSET PURCHASE AGREEMENT
19
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is made to be effective as
of the 1st day of December, 1995, by, between and among UCI Medical Affiliates,
Inc., a Delaware corporation ("UCI"), UCI Medical Affiliates of South Carolina,
Inc., a South Carolina corporation and wholly owned subsidiary of UCI ("UCI of
SC"), Doctor's Care, P.A., a South Carolina professional corporation ("Doctor's
Care") and Robert G. Mann, MD, P.A. (Seller)..
Introduction. Seller owns and operates a medical practice located at
1601 Cedar Lane Road, Suites 19 & 20, Greenville, South Carolina, 29611
("Premises"). UCI of SC owns and /or leases various medical-related facilities
and equipment in South Carolina and has contracted with Doctor's Care to provide
health care services at such facilities. Seller desires to (i) lease the
premises to UCI pursuant to a lease between the parties dated December 1, 1995.
(ii) transfer its patient records to Doctor's Care, (iii) become an employee of
Doctor's Care pursuant to an employment agreement between the parties dated as
of December 1, 1995 and (iv) transfer to UCI of SC as of 12:01 a.m. on December
1, 1995 (the "Effective Date") certain assets of the Seller upon the terms and
conditions set forth herein. This Agreement provides for the transfer of the
Assets (hereinafter defined) from Seller to UCI of SC.
Agreement. NOW, THEREFORE, in consideration of these premises and the
mutual covenants hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Sale of Assets to UCI of SC.
1.1 Transfer of Assets. At the Closing, for the consideration
herein provided, Seller shall convey, transfer, assign and deliver, or cause to
be conveyed, transferred, assigned, and delivered, to UCI of SC, and UCI of SC
shall purchase and accept from Seller, all of Seller's right, title, and
interest (as the case may be) in and to following assets (collectively
"Assets"):
1.1.1 All of the machinery, equipment, computer and telephone
systems (including hardware and software), furniture, furnishings, office
equipment, and related tangible personal property respecting Seller's business
conducted in the Premises (the "Business"), including (without limitation) the
items described in Exhibit A attached hereto.
1.1.2 All of the accounts receivable, all proceeds of the
accounts receivable collected subsequent to the Effective Date, leases and
contracts, sales contracts, equipment leases, permits, licenses, rights,
computer software, contracts, goodwill and related intangible personal property
of the Business, including (without limitation) the items described in Exhibit B
attached hereto. Seller shall be responsible for obtaining the necessary
consents, if any, to assignment of such intangible assets.
1.1.3 All of the inventory of the Business, wherever
located.
1.1.4 All of Seller's repair and service contracts and
warranties (which are acceptable to UCI of SC in its sole discretion) used or
useful in the Business.
1.2 Method of Transfer. The transfer and sale of the Assets will be
evidenced by appropriate Bills of Sale, assignments and other instruments
executed and delivered by Seller to UCI of SC at Closing, as set forth in this
Agreement.
1.3 Not a Sale of Business. This transaction constitutes the sale of
assets by Seller and not the sale of a business; provided, however, that
anything contained in this Agreement to the contrary notwithstanding, it is the
intent of the parties that UCI of SC purchase and acquire and
20
<PAGE>
Seller sell and transfer the complete operating process of the Business
and all properties and interest necessary to operate the Business
substantially as it is presently being operated.
1.4 Possession. UCI of SC shall take, and Seller shall deliver,
possession of the Assets at completion of Closing to be effective as of the
Effective Date.
2. Transfer of Seller's Patient Records to Doctor's Care.
2.1 Transfer of Patient Records. At Closing, Seller shall transfer and
deliver to Doctor's Care all of Seller's right, title and interest in and to any
medical records in its possession that were made in treating a patient and of
records transferred to Seller concerning prior treatment of a patient ( the
"Patient Records").
2.2 Method of Transfer. The transfer of the Patient Records will be
evidenced by an appropriate bill of sale, executed and delivered by Seller to
Doctor's Care at Closing, as set forth in this Agreement.
2.3 Notices. Seller shall cause any public notices to be filed in a
timely manner and to otherwise comply with all requirements of the Physician's
Patient Records Act or any other applicable law, regulation, rule or ordinance
related to the transfer of the Patient Records.
2.4 Possession. Doctor's Care shall pick up and take, and Seller shall
relinquish, possession of the Patient Records at Closing, to be effective as of
the Effective Date.
3. Consideration for Acquisitions.
3.1 Purchase Price. The purchase price ("Purchase Price") for the
Assets shall be payable as follows:
3.1.1 Common Stock. UCI shall issue to Seller certificates representing
such numbers of shares of UCI Common Stock, $0.05 par value, having an aggregate
value of Two Hundred Forty Thousand ($240,000) and No/100 Dollars. For purposes
hereof, the price per share of UCI Common Stock shall be the closing ask price
on the date immediately prior to the Closing Date. The Shares, when issued, will
be duly authorized, validly issued, fully paid and on accessible. The
certificate evidencing the Shares shall bear a restrictive legend in
substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, HAVE
BEEN TAKEN WITHOUT A VIEW TO THE DISTRIBUTION THEREOF WITHIN THE MEANING OF SUCH
ACT, AND MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT
IN ACCORDANCE WITH SUCH ACT AND THE RULES AND REGULATIONS THEREUNDER AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THE COMPANY WILL NOT TRANSFER
SUCH SHARES EXCEPT UPON RECEIPT OF EVIDENCE SATISFACTORY TO THE COMPANY, WHICH
MAY INCLUDE AN OPINION OF COUNSEL, THAT THE REGISTRATION PROVISIONS OF SUCH ACT
HAVE BEEN COMPLIED WITH THAT SUCH REGISTRATION IS NOT REQUIRED AND THAT SUCH
TRANSFER WILL NOT VIOLATE ANY APPLICABLE STATE SECURITIES LAWS.
3.1.2 Additional Payment. UCI of SC shall pay to Seller as
follows:
(1) The sum of Thirty Thousand Dollars ($30,000.00) on
or before Closing Date.
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(2) An additional sum of Thirty Thousand Nine Hundred
Dollars ($30,900.00) as evidenced by a Promissory
Note ("Promissory Note") payable to Seller in said
amount and executed by Buyer. The Promissory Note is
to be paid on or before April 1, 1996.
4. Closing.
4.1 Closing Date. The closing of the sale and purchase of the Assets
and related transactions ("Closing") shall take place on December 1, 1995,
commencing at 11:00 a.m. (local time), at the Law Offices of Randolph W. Hunter,
P.A. or such other time and place as may be mutually agreed upon in writing by
the Parties (alternatively "Closing). In the event Closing set forth in this
Section 4 is changed to a different date, all references in this Agreement to
Closing shall be deemed to refer to the time and date agreed upon by the
parties, in the manner set forth herein. The effective date for the transactions
contemplated herein shall be the Effective Date.
4.2. Transactions at Closing. At the Closing:
4.2.1 Upon receipt of an investment letter in the form of
Exhibit C attached hereto duly executed by Seller, UCI shall issue to Seller a
certificate evidencing the Shares pursuant to Section 3.11. If such certificate
is not available at Closing, UCI will provide Seller with a copy of the
instructions which UCI will forward to its transfer agent instructing such agent
to issue a certificate evidencing the Shares to Seller.
4.2.2 Seller shall deliver to UCI of SC or Doctor's Care, as
applicable, the bills of sale, assignments, titles, certificates, and other
documents, agreements and instruments, in form and substance required by this
Agreement, as described in Section 4.3.
4.2.3 UCI of SC shall deliver to Seller the documents,
agreements and instruments in form and substance required by this Agreement, as
described in Section 4.4..
4.2.4 All employees of Seller directly and primarily
associated with the Business will cease to be employees of Seller, and Doctor's
Care may, subject to the exercise of Doctor's Care's sole discretion, offer
immediately or thereafter to hire any or all of such persons. Doctor's Care
and/or UCI of SC shall be entitled to hire only those employees of Seller which
Doctor's Care and/or UCI of SC elects in its sole discretion to hire, and
Doctor's Care and/or UCI of SC shall not assume any liability whatsoever to any
employee of Seller not hired by Doctor's Care and/or UCI of SC. Seller will be
responsible for paying and reporting all costs and liabilities, including but
not limited to compensation, federal and state withholding taxes, federal and
state unemployment taxes, all employee benefit costs, and worker's compensation
claims incurred or accrued prior to the Closing Date.
4.2.5 The Parties will take such other actions contemplated at
Closing by this Agreement..
4.3 Seller's Documents. At Closing, Seller shall deliver or cause to be
delivered, at Seller's expense, the following duly executed, lawful and
effective documents and instruments:
4.3.1 A bill of sale for tangible personal property and
fixtures composing portions of the Assets substantially in the form attached
hereto as Exhibit D to UCI of SC.
4.3.2 An assignment of intangible personal property composing
portions of the Assets substantially in the form attached hereto as Exhibit E to
UCI of SC.
4.3.3 The Employment Agreement dated June 23, 1998 substantially in the
form attached hereto as Exhibit F to UCI.
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4.3.4 An Investment Letter substantially in the form attached
hereto as Exhibit C to UCI.
4.3.5 A bill of sale for the Patient Records to Doctor's Care.
4.4 Documents of UCI, UCI of SC or Doctor's Care. At Closing
UCI, Doctor's Care and/or UCI of SC shall deliver or cause to be delivered to
Seller (as the case may be), at their expense, the following duly executed,
lawful, and effective documents and instruments:
4.4.1 UCI will deliver a certificate evidencing the Shares, or
if such certificate is not available, a copy of the instructions which UCI will
forward to its transfer agent instructing such agent to issue a certificate
evidencing the Shares to Seller.
4.4.2 Doctor's Care will deliver the Employment Agreement
substantially in the form attached hereto as Exhibit F.
4.4.3 Doctor's Care will deliver the Promissory Note to the
Seller.
4.5 Conditions of Title.
4.5.1 Assets. At Closing, the Assets shall be conveyed by
appropriate instruments of conveyance free and clear of all claims, security
interests, liens and encumbrances except personal property and ad valerium taxes
for the year of Closing (which shall be prorated as provided in this Agreement),
or leases which remain outstanding which have been assumed by the buyer.
4.6 Transactions Subsequent to Closing.
4.6.1 Employment Matters. Nothing contained herein shall be
construed to create any liability for UCI, UCI of SC or Doctor's Care to present
or past employees of Seller, or to the South Carolina Employment Security
Commission or any other person or entity or regulatory agency for periods prior
to the Closing Date.
4.62 Accounts Receivable. Seller shall cooperate with UCI of
SC's attempts to collect the accounts receivable constituting portions of the
Assets and will promptly pay over to UCI of SC any proceeds of such accounts
receivable that are paid to Seller after Effective Date.
4.6.3 Confidentiality. Seller shall hold in confidence all
documents and information concerning the Business and the Assets (except that
Seller may, after reasonable notice to UCI of SC disclose such documents and
information, or copies or summaries thereof, to any governmental authority
reviewing the transactions contemplated hereby or as required in Seller's
reasonable judgment pursuant to Federal or state laws or court order).
4.6.4 Taxes. Seller shall file such tax returns and reports
and pay such taxes as are required for periods ending with the day before the
Closing Date.
4.6.5 Creditors. Seller shall promptly pay all of Seller's
valid liabilities and perform all of Seller's valid obligations which Seller has
incurred in connection with the Assets or the operation of the Business prior to
the Effective Date.
4.6.6 Miscellaneous Required Acts. The Parties shall take such
other actions and comply with other obligations as are required after Closing
under this Agreement or under documents ancillary hereto.
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4.7 Other Actions. The parties hereto agree that they will at any time
and from time to time do, execute, acknowledge and deliver, or will cause to be
done, executed, acknowledged and delivered, all such further acts, deeds,
assignments, transfers, conveyances, documents, instruments and assurances as
may be reasonably required by the other party in order to carry out fully and to
effectuate the transactions herein contemplated under, and in accordance with,
the provisions of this Agreement.
5. Representations and Warranties of Seller. Seller hereby warrants, represents,
and covenants as follows:
5.1 Authority. Seller has full power and authority to execute this
Agreement and to consummate the transactions contemplated hereby. When executed
and delivered, this Agreement shall constitute valid and binding obligations of
Seller enforceable in accordance with its terms and conditions. Neither the
execution nor the delivery of this Agreement nor the consummation of the
transactions contemplated hereby, nor the compliance with any of the terms and
conditions hereof, will result in the breach by Seller of any of the terms,
conditions, or judgment, law or other contract, agreement or instrument to which
Seller is bound, or constitute a default of such indenture, mortgage, deed of
trust, order, judgment, law or other contract, agreement or instrument.
5.2 Compliance with Laws. Seller is in compliance with all laws,
ordinances, and regulations that govern such Seller's ownership and present use
of the Assets the violation of which would have an adverse effect on the Assets
or the Business. All of the Assets sold hereunder substantially comply with
applicable environmental, zoning health, OSHA, consumer products, and fire
safety regulations.
5.3 Title to Assets. At Closing, Seller will have, and shall be
entitled to convey, good, marketable and insurable title to the Assets and the
condition of title as required by Section 4.5. At Closing, Seller will not be
indebted to any contractor, laborer, mechanic, material man or any other person
or entity for work, Labor, materials or services in connection with the Assets
for which any such person or entity could claim a lien against the Assets. To
the best of Seller's knowledge, there is not pending or threatened condemnation
or eminent domain action respecting the Premises or the Assets.
5.4 Consents. No consent of any third party is required in
connection with Seller transfer and assignment of Assets to Buyer hereunder.
5.5 Litigation. There are no judicial or administrative actions or
proceedings pending, or to the best of Seller's knowledge, threatened that
question the validity of this Agreement or any transaction contemplated hereby
or that relate to the Assets, or to the conduct of Business, including but not
limited to condemnation or bankruptcy proceedings, which if adversely determined
would have an adverse effect upon Seller's ability to enter into this Agreement
or perform its obligations hereunder or upon the use, enjoyment, or value of the
Assets for UCI of SC.
5.6 Insurance Coverage. Buyer maintains policies of insurance covering
the Assets in amounts and against such losses and risks as are customary for
facilities such as the Business in their present usage.
5.7 Normal Course. Seller shall have operated the Assets in the normal
and ordinary course of business since at least January 1, 1994, and shall have
paid or caused to be paid promptly when due all city, county and state ad
valerium taxes and similar taxes and assessments and all utility charges and
assessments imposed upon or assessed against the Assets prior to the Closing.
Seller shall exercise its best efforts to preserve the goodwill of the
employees, patients, suppliers and others having business relationships with the
Business through Closing.
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5.8 Creditors, Solvency, and Bankruptcy. Seller shall not hinder,
delay, defraud, or avoid any obligation to any past present or future creditor
in the transactions contemplated by this Agreement. Seller is currently solvent
and will not be rendered insolvent as a result of the transactions contemplated
hereby. Seller has not initiated, nor does it intend to initiate with respect to
itself as debtor, has had initiated or expects to have initiated against it as
debtor, any proceeding under federal or any state's bankruptcy, insolvency or
similar laws.
5.9 Labor and Employee Benefit Matters. Seller is not a party to any
agreement with any labor organization. Seller has not maintained or sponsored
for any employee or former employee of Seller any fringe or benefit plans,
including, without limitation, any retirement, pension, profit sharing,
thrift-savings, non-qualified deferred compensation, incentive compensation,
stock bonus, stock option (qualified or non-qualified), cash bonus, employee
stock ownership (including, without limitation, payroll related employee stock
ownership), insurance, medical, welfare or vacation plans of any kind and any
"employee benefit plan" (as defined in Section 3(3) of Title I of the Employment
Retirement Income Security Act of 1974, as amended ("ERISA)) or any voluntary
employees' beneficiary association (as defined in Section 501(c) (9) of the
Internal Revenue Code) or combination of the foregoing. Seller has not incurred
any accumulated funding deficiency within the meaning of ERISA or any liability
to the Pension Benefit Guaranty Corporation established under ERISA, nor has any
tax been assessed against Seller for the alleged violation of the Internal
Revenue Code with respect to the Business or its operation.
5.10 Payables and Taxes. Seller will pay all accounts payable and
taxes, assessments, and charges respecting the Assets for which Seller remains
or becomes responsible in a reasonable amount of time following Closing and will
protect the reputation of UCI of SC by promptly paying all the valid debts and
obligations of Seller which have been incurred in connection with the operation
of the Business and which affect the Assets. Seller has paid all taxes, license
fees or other charges levied, assessed or imposed upon the Business and any of
the Assets, except those not yet due and payable; Seller will, however, pay all
taxes incurred or accruing up to the Effective Date, whether same are payable at
that date or not, including (without limitation) Ad Valorem, payroll, sales and
other taxes due, incurred, or livable as of the Effective Date.
5.11 Workers' Compensation. There are no worker compensation or similar
claims or actions pending or threatened, and Seller does not know of facts which
would make such claims timely, by past or present employees of Seller.
5.12 Status of Assets. The Assets sold hereunder constitute all of the
assets of the Business and include all property, rights, and intangibles
necessary for UCI of SC and/or Doctor's Care to operate after Closing a business
similar to the Business as heretofore conducted. All material inventory systems,
machinery, equipment, and other tangible property which are portions of the
Assets are generally sound, in good repair, may be safely operated within all
applicable standards or regulations in their present conditions, and are in
merchantable condition. All material contracts, commitments, accounts
receivable, and similar rights which are portions of the Assets are valid,
binding, enforceable, and without known default as violation of law. The
information related to accounts receivable provided to UCI of SC is materially
accurate and reflect valid, binding, and enforceable rights of the Business
which shall be lawfully transferred to UCI of SC hereunder.
5.13 No Adverse Conditions. Except as previously disclosed in writing
to UCI of SC, there are no adverse conditions or circumstances that may
interfere with the use and enjoyment of, or opportunity to resell or encumber,
any of the Assets.
5.14 Brokerage. Seller has not dealt with a broker in connection with
this transaction and no brokerage commission nor claim thereof shall accrue or
become payable to any person or entity respecting this transaction.
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5.15 Disclosures. To the best of Seller's knowledge, all information
and data furnished by Seller to UCI, UCI of SC or Doctor's Care with respect to
the Assets and the Business will be materially true, correct, and complete, and
not materially misleading.
5.16 Representations and Warranties at Closing. Except as expressly
otherwise permitted in this Agreement, the representations and warranties of
Seller set forth in this Agreement shall be as of Effective Date as though such
representations and warranties were made on such date, unless they reference a
specific earlier date whereupon, as of the Effective Date, they shall be true as
at the earlier date referenced.
5.17 Environmental. To the best of Seller's knowledge, the Premises is
not now used and has never been used, as a gasoline station or other site for
the storage of petroleum products, or as a garbage or refuse dump site, a
landfill, a waste disposed facility for the storage, processing, treated or
temporary or permanent disposal of regulated waste materials, indulging without
limitation, solid, industrial, toxic, hazardous, radioactive, nuclear,
putrescible, waste or sewage; and, to the best of Seller's knowledge, the
Premises is in substantial compliance with all applicable environmental laws,
regulations, codes and ordinances.
6. Representations and warranties of UCI, Doctor's Care and UCI of SC. UCI,
Doctor's Care and UCI of SC hereby represent, warrant, and covenant as follows:
6.1 Organization and Good Standing. UCI is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware and has full corporate power to carry on its businesses and to own and
operate its properties and assets as presently owned and operated. UCI of SC is
a corporation duly organized, validly existing, and in good standing under the
laws of the State of South Carolina and has full corporate power to carry on its
businesses and to own and operate its properties and assets as presently owned
and operated. Doctor's Care is a professional association duly organized,
validly existing, and in good standing under the laws of the State of South
Carolina and has full corporate power to carry on its businesses and to own and
operate its properties and assets as presently owned and operated.
6.2 Authority of Buyer. UCI, Doctor's Care and UCI of SC each have
taken all corporate action necessary to approve and authorized the execution of
this Agreement, and to consummate the transactions contemplated hereby. Each of
their respective representatives signing this Agreement has full power and
authority to execute this Agreement in the indicated capacity and to consummate
the transactions contemplated hereby. When executed and delivered, this
Agreement shall constitute valid and binding obligations of UCI, Doctor's Care
and UCI of SC, enforceable in accordance with its terms and conditions except as
enforcement may be limited by applicable bankrupt, insolvency or similar laws
effecting creditors rights generally and by principles of equity. Neither the
execution nor the delivery of this Agreement nor the consummation of the
transactions contemplated hereby, nor compliance with all of the terms and
conditions hereof, will result in the breach by UCI, Doctor's Care or UCI of SC
of any of the terms, conditions or provisions of any of their respective of
trust, order, judgment, law, or other contract, agreement or instrument to which
either of them is a party, or by which either is bound, or constitute a default
of such indenture, mortgage, deed of trust, order, judgment, law, or other
contract, agreement or instrument.
6.3 Brokerage. Neither UCI, Doctor's Care, nor UCI of SC has dealt with
any broker in connection with this transaction and, no brokerage commission nor
claim therefor shall accrue or become payable to any person or entity respecting
this transaction.
6.4 Consents. No consent of any third party is
required in connection with the purchase and acceptance of the Assets
from Seller hereunder.
6.5 Litigation. There are no judicial or administrative actions or
proceedings pending, or to the best knowledge of UCI, Doctor's Care or UCI of
SC, threatened that question the
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validity of this Agreement or any transaction contemplated hereby, which
if adversely determined would have a material adverse effect upon their
ability to tender into this Agreement or perform their respective
obligations hereunder.
6.6 Creditors, Solvency and Bankruptcy. UCI, Doctor's Care or UCI of SC
shall not hinder, delay, defraud or avoid any obligations to any past, present
or future creditor in the transactions contemplated by this Agreement. The
above-mentioned parties are currently solvent and will not be rendered insolvent
as a result of the transactions contemplated hereby. UCI, Doctor's Care or UCI
of SC does not intend to initiate with respect to itself as a debtor, nor do
they expect to have initiated against it as a debtor, any proceeding under
federal or any state's bankruptcy, insolvency or similar laws.
6.7 Representations and Warranties at Closing. Except as expressly
otherwise permitted in this Agreement, the representations and warranties of
UCI, Doctor's Care and UCI of SC set forth in this Agreement shall be true at
the Effective Date as though such representations and warranties were made on
such date, unless they reference a specific earlier date whereupon, at Effective
Date, they shall be true as at the earlier date referenced.
7. Conditions Precedent.
7.1 Conditions of UCI, UCI of SC and Doctor's Care. The obligations of
UCI, UCI of SC and Doctor's Care hereunder shall be subject, to the extent not
waived, to the satisfaction of each of the following conditions at the Closing:
7.1.1 Representation and Warranties. The representations and
warranties of Seller contained in this Agreement shall be true and correct in
all material respects as of the date when made and, except for changes
specifically contemplated by this Agreement, on and as of the Effective Date as
though such representations and warranties had been made as of the Effective
Date.
7.1.2 Deliveries. The release of documents
which Seller is obligated to make under Section 4 shall have been
made.
8. Cost and Expenses .
8.1 Transactional Cost. The parties hereto shall be responsible for
their respective attorney's fees, accountants' fees, experts' fees, and other
expenses incurred by them in connection with the negotiations and Closing of
this transaction; provided however, in the event litigation is commenced to
enforce any rights under this Agreement or to pursue any other remedy available
to any party, all legal expense or other direct costs of litigation of the
prevailing party shall be paid by the other party.
8.2 Proration of Taxes and Charges. All personal property taxes, public
utility charges and like charges (which are not terminated and paid as of
Closing by Seller), if any, relating to the personal (tangible and intangible)
property comprising the Assets shall be prorated as of the Effective Date, in
accordance with regular accounting procedure. Settlement at Closing will be made
on proration of estimates of such taxes and charges. If, as the result of such
proration at Closing, a net balance is owed by Seller to UCI of SC, or visa
versa, the amount thereof shall be paid to such party at or within thirty (30)
days after receipt of the next succeeding payment notice.
8.3 Sales Taxes. Buyer shall be responsible for, and shall pay,
all sales taxes, if any, applicable to the sale of the Assets as called for
herein.
9. Indemnity. Seller shall indemnify and hold UCI, Doctor's Care and UCI of SC
and their respective officers, directors and agents harmless, from any and all
losses, damages, liabilities claims,
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suits, demands, penalties, assessments, obligations, causes of actions
or costs (including reasonable litigation expenses and legal fees)
asserted against or incurred by UCI, Doctor's Care or UCI as a result of
the proven breach by Seller of any covenant, warranty representation, or
agreement, made by Seller herein or in agreements related hereto
including but not limited to litigation expenses and legal fees that
might be incurred because of such breach.
10. Existing Liabilities. Neither UCI, Doctor's Care nor UCI of SC assumes any,
and hereby expressly disclaims all, obligations or liabilities of Seller,
contingent or absolute, including (without limitation) liabilities for (I)
federal or state income, payroll, property, or sales taxes for any period, or
(ii) any tort, contract, or statutory liability resulting from or alleged to
have resulted from the Business prior to the Effective Date or operations of
Seller prior to Effective Date, except for the obligations arising and maturing
after the Effective Date to perform under those contracts expressly assumed by
Buyer hereunder. All property taxes assessed against the Assets solely hereby
shall be prorated as of the Effective Date.
11. Risk of Loss. In the event the Assets or any substantial part thereof shall
be damaged or destroyed prior to the Effective Date due to any casualty or
event, or there shall occur any actions for condemnation or eminent domain
having a material adverse affect on the Assets or any substantial part thereof,
Seller shall promptly notify UCI of SC that such damage, destruction, or action
has occurred and the estimated extent thereof. In case the amount of such
damage, destruction, condemnation or eminent domain is in excess of 10% of the
Purchase Price, including but not limited to the value of the UCI Common Stock
more fully described in Section 3.11 ,of all of the Assets immediately before
such damage or destruction, then UCI of SC must within five (5) days of receipt
of such notice either:
11.1 Termination. Terminate this Agreement by giving
Seller written notice of such termination and thereupon all parties
shall be released of all further liability to the others; or
11.2 Adjustment. Alternatively, and subject to the fulfillment of the
conditions set forth herein, require the consummation of the transactions
provided for in this Agreement and, in such case (or in case of any damage by
fire or other casualty, or condemnation or eminent domain action not entitling
UCI of SC to terminate this Agreement), all proceeds of insurance covering the
Assets and all of the claims arising as a result of such damage or destruction
to such Assets or all proceeds of such condemnation or eminent domain action for
such Assets shall become the property of UCI of SC. In the event UCI of SC
elects to require the consummation of the transactions contemplated herein,
Seller shall not compromise or settle any such claim or action at any time
without the written consent of UCI of SC which shall Further, in such event, the
representations and warranties of seller, as set forth in Section 5 shall be
modified equitably to account for such claim or action. In this regard, Seller
represents and warrants that the face amount of the subject fire and casualty
insurance exceeds 10% of the Purchase price, including the value of stock more
fully described in Section 3.11.
12. Miscellaneous.
12.1 Entire Agreement. This Agreement, including the
Exhibits hereto, embodies the entire Agreement and understanding between
the parties hereto as to the matters herein addressed and supersedes all
prior agreements and understandings relating to the subject matter
hereof.
12.2 No Waiver. No failure to exercise, and no delay in exercising any
right, power or remedy hereunder or under any document delivered pursuant hereto
shall impair any right, power or remedy which the parties hereto may have, nor
shall any such delay be construed to be a waiver of any such rights, powers or
remedies, or any acquiescence in any breach or default under this Agreement, nor
shall any waiver of any breach or default of any party hereunder be deemed a
wavier of any default or breach subsequently occurring.
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12.3 Survival. All representations, warranties,
covenants, and agreements herein contained shall survive the Closing
hereunder.
12.4 Amendment. No provision of this Agreement or any document or
instrument relating to the Agreement, may be amended, modified, supplemented,
changed, waived, discharged, or terminated, unless the parties hereto consent
thereto in writing.
12.5 Notices. All notices, requests, approvals, consents, demands and
other communication provides for or permitted hereunder shall be in writing,
signed by an authorized representative of the sender and addressed to the
respective Party at the address set forth below:
Buyer: UCI of SC
6168 St. Andrews, Road
Columbia, SC 29212-3132
Attn.: M.F. McFarland, III, MD
Seller: Robert G. Mann, MD
1601 Cedar Lane Road
Greenville, SC 29611
A party hereto may change its respective address by notice in writing given to
the other parties to this Agreement. Any notice, request, approval, consent,
demand or other communication shall be effective upon the first to occur of the
following; (I) when delivered to the party to whom such notice, request,
approval, consent, demand or the communication is being given, or (ii) five (5)
business days after being duly deposited in the US mail, certified, return
receipt requested.
12.6 Severability of Provisions. In case any one or more of the
provisions contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.
12.7 Successors and Assigns. This Agreement shall be binding upon the
parties, and their respective successors and assigns, and shall inure to the
benefit of the parties and their respective successors and permitted assigns.
12.8 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one Agreement, and
any party hereto may execute this Agreement by signing any such counterpart. The
authorized attachment of counterpart signature pages shall constitute execution
by the parties.
12.9 Choice of Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of South Carolina.
12.10 Jurisdiction. The parties hereto consent to jurisdiction, subject
to proper service of process, in the State of South Carolina regarding any
disputes arising hereunder.
12.11 Usage. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Terms such as "hereof" ,
"hereunder", "hereto", "herein", and words of similar import shall refer to this
Agreement in its entirety and all references to "Articles", "Paragraphs",
"Sections", and similar cross references shall refer to specified portions of
this Agreement, unless the context clearly requires otherwise.
12.12 Further Instruments and Acts. From time to time at a party's
request, whether at or after Closing and without further consideration, the
other party(ies) shall execute and deliver such
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further instruments of conveyance, transfer and assignment and upon
reimbursement for actual reasonable out-of-pocket expenses take such
other action as the requesting party reasonably may require to more
effectively convey and transfer to the requesting party the properties
to be conveyed, transferred and assigned hereunder, and, if necessary,
will assist the requesting party in the collection or reduction to
possession of such property. In addition, each party agrees to provide
reasonable access to records respecting the Business as are requested by
the other party(ies) for proper purpose with good cause shown (subject
to appropriate confidentiality agreements to be negotiated as such time)
and agree to reasonably cooperate in resolving any matters resulting
from the transactions contemplated hereby.
12.13 Assignment. This Agreement is not assignable by
any party without the prior written consent of the other party(ies)
hereto.
IN WITNESS WHEREOF, the parties have executed this Asset Purchase Agreement
under seal, with the corporate parties acting by and through their duly
authorized offers, as of the date first above written.
BUYER:
UCI MEDICAL AFFILIATES, INC.
By: /s/ M.F. McFarland, III, M.D.
Its: President & Chief Executive Officer
UCI MEDICAL AFFILIATES OF SOUTH
CAROLINA, INC.
By: /s/ M.F. McFarland, III, M.D.
Its: President & Chief Executive Officer
DOCTOR'S CARE, P.A.
By: /s/ M.F. McFarland, III, M.D.
Its: President
SELLER:
ROBERT G. MANN, MD, P.A.
By: /s/ Robert G. Mann, M.D.
Its: President
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EXHIBITS TO ASSET PURCHASE AGREEMENT
EXHIBIT NO. DESCRIPTION PAGE NUMBER
Exhibit A Furniture, Fixtures and Equipment 32
Exhibit B Equipment Lease Agreement Summary 33
Exhibit C Investment Letter 34
Exhibit D Bill of Sale 37
Exhibit E Assignment and Assumption Agreement 38
Exhibit F Employment Agreement 39
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EXHIBIT A
FURNITURE, FIXTURES AND EQUIPMENT
5 Chart Shelves
1 Sound System
1 Typewriter
1 Konica Copier
1 Casio FR2600 10 Key
1 Answering Machine (1309 ATT)
1 Electric Pencil Sharpener
5 Multi Line Phones
3 Single Line Phones
1 QBC Auto Reader
1 Reflatron
1 Burdeck E350i EKG
2 Swivel Chairs
11 Stack Chairs
2 5' Folding Tables
1 48" Round Folding Table
2 Refrig/Freezer Comb.
1 AutoClave w/cabinet
1 Microwave
1 Coffee pot
10 Wall mounted wire shelves
5 Exam Tables
1 Ox Tank and regulators
1 Infant Scale
1 Sigmoid Scope
1 Hyfrecator
1 Noxide Tank and regulator
2 Used EKG machines
7 Pressure Cuff-Sphygmomanometer
4 OTI Scopes with 2 rechargers
13 Waiting Room Chairs
1 Coffee Table
1 2-drawer cabinet (receptionist area)
1 Full scale
4 Drawer file cabinet
1 Wheel Chair
1 Fax Machine
4 Small tables
5 Portable floor lights
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EXHIBIT B
EQUIPMENT LEASE AGREEMENT SUMMARY
Below is a summary of the Equipment Lease Agreement:
Effective Date: March 31, 1993
Term of Lease: 36 Months
Lease Payment: $204.70 per month
Supplier: PSS
8901 Farrow Road, Suite 104
Columbia, South Carolina 29203
Equipment: 1 Burdick E 350I EKG
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EXHIBIT C
INVESTMENT LETTER
TO: UCI Medical Affiliates, Inc.
6168 St. Andrews Road
Columbia, SC 29212
ATTN: President
RE: Issuance of Common Stock in UCI Medical Affiliates, Inc.
Dear Sir,
On this date, you are issuing to the undersigned ("Transferee") the
number of shares of the common stock, $0.05 par value, of UCI Medical
Affiliates, Inc. (the "Company") as are set forth on the signature page of this
letter (the "Shares"). In consideration of your agreement to issue the Shares to
transferee, Transferee hereby represents and warrants to you and hereby
covenants and agrees with you, as follows:
1. Transferee is acquiring the Shares solely for transferee's own account and
not as nominee for, representative of, or otherwise on behalf of any other
person or entity. Transferee is acquiring the Shares with the intention of
holding the Shares for investment purposes only, and transferee has no present
intention of participating, directly or indirectly, in a subsequent sale,
transfer or other distribution of the shares, or of dividing Transferee's
interest in the Shares with any other person or entity. Transferee has not
offered any of the Shares for sale or disposition, and Transferee shall not make
any sale, transfer or other disposition of the Shares in violation of state or
federal law.
2. The Transferee considers himself to be a sophisticated investor in companies
similarly situated to the Company, and Transferee has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of the prospective investment in the Shares. Transferee
understands that there is no public market for the Shares, no public market for
the shares is likely to develop and it may not be possible for Transferee to
readily liquidate his investment. Transferee is aware that his investment in the
Company is speculative and involves a high degree of risk of loss arising from,
among other things, substantial market, operational, competitive and other
risks, and has made his own evaluation of the risks associated with this
investment.
3. The shares were not offered to Transferee by means of any form of general or
public solicitation or general advertising, or publicly disseminated
advertisements or sales literature including,(a) any advertisement, article,
notice, or other communication published in any newspaper, magazine, or similar
media, or broadcast over television or radio or (b) any seminar or meeting to
which transferee was invited by any of the foregoing means of communications.
4. Transferee's investment in the shares is reasonable and consistent with the
nature and size of his present investments and net worth, Transferee has no need
for liquidity in the investment represented by shares, and Transferee is
financially able to bear the economic risk of this investment, including the
ability to afford holding the Shares for an indefinite period of time and to
afford a complete loss of this investment.
5. Transferee is aware that the Company may offer and sell additional shares of
common stock in the future, thereby diluting his percentage equity ownership of
the Company.
6. Transferee has had an individual income in excess of $110,000 in each of he
two most recent years and reasonably expects an income of the same or higher for
the current year.
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7. Transferee understands that as a publicly traded company, the Company files
with the SEC various reports, including quarterly and annual financial
statements, annual reports to shareholders, and proxy statements, and that all
of such reports, statements and information are available to the public,
including Transferee, from the SEC and directly from the Company. Transferee has
been given the opportunity to obtain copies of such public information and to
ask questions of, and receive answers from, you with respect to the Company and
the Shares, concerning the terms and conditions of the issuance of the Shares by
you to Transferee, and has been given the opportunity to obtain such additional
information necessary to verify the accuracy of any information provided to
Transferee by you in order for Transferee to evaluate the merits and risks of an
investment of the Shares to the extent that you possess such information or
could acquire it without unreasonable effort or expense. Transferee has been
furnished with all information concerning the Shares and the Company that
Transferee desires.
8. In regard to any economic or legal considerations related to the Shares,
Transferee has relied on the advice of, or consulted with, only Transferee's own
advisors, and Transferee has not relied upon you, the Company, the Company's
legal counsel or the accountants for the Company regarding the Shares or the
Transaction contemplated by this Investment Letter.
9. Transferee understands and acknowledges that the issuance of the Shares to
Transferee was not registered under the Act or under the securities laws of any
state in reliance upon an exemption or exemptions contained in the Act (and the
regulations promulgated thereunder) and applicable state securities laws.
Consequently, Transferee understands that the Shares cannot be subsequently
transferred unless they are registered under the Act and applicable state
securities laws, or unless an exemption from such registration is available.
Transferee understands and acknowledges that any certificate will bear a legend
restricting the transfer of such Shares consistent with the foregoing, and
Transferee understands that a notation may be made in the stock records of the
Company restricting the transfer of any of the Shares in a manner consistent
with the foregoing.
10. Transferee understands and acknowledges that neither the Company nor you are
under any obligation to register the Shares for public sale or to comply with
the conditions of Rule 144 promulgated by SEC under the Act or to take any other
action necessary in order to make available any exemption for the subsequent
transfer of the Shares without registration.
11. Transferee is eighteen (18) years of age or older, his bona fide principal
residence is at the address shown under his signature evidencing my execution of
this Investment Letter, and he has no present intention of removing himself from
his existing state of residence.
12. Transferee confirms that the representations he has previously made to the
Company and those contained in this Investment Letter are correct and complete
as of the date hereof, and that if there should occur any material change in
such representations prior to the receipt of the Share by Transferee, he agrees
that he will immediately furnish such revised or corrected representations or
information to the Company.
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This investment letter shall be binding upon the Transferee and the
Transferee's heirs, executors, administrators, successors, representatives and
assigns and shall ensure to the benefit of you, your heirs, executors,
administrators, successors and assigns. This investment letter shall be governed
and construed in accordance with the laws of the State of South Carolina.
TRANSFEREE:
/s/ Robert G. Mann
Number of shares of
UCI Medical Affiliates, Inc.
to be issued:
Robert G. Mann, M.D., P.A.
(Please print name here)
60,000 Shares
1601 Cedar Lane Road, Suite 19
Date: 12/1/95 (Street Address)
Greenville, SC 29611
(City, State, Zip)
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EXHIBIT D
BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS, that Robert G. Mann, M.D., P.A. ("Seller"), for
good and sufficient consideration the value of which is hereby acknowledged,
does hereby sell, assign and transfer unto UCI Medical Affiliates, Inc., a South
Carolina corporation with offices at 6168 St. Andrews Road, Columbia, South
Carolina 29212 ("Buyer") all of Seller's right, title and interest in and to,
all the equipment, fixtures and other tangible personal property composing
portions of the Assets described in the Asset Purchase Agreement dated as of
December 1, 1995, by, between and among Seller, Buyer, UCI Medical Affiliates,
Inc. and Doctor's Care, P.A.
("Agreement"), all as provided in the Agreement.
TO HAVE AND TO HOLD the same unto Buyer, its successors and assigns, forever.
AND Seller does for himself and his heirs, successors and assigns, covenants and
agrees to and with Buyer, its successors and assigns, to warrant and defend the
sale and conveyance of the aforesaid assets hereby sold unto Buyer.
This Bill of Sale is made, executed and delivered pursuant to the Agreement, and
is subject to all of the terms, provisions, and conditions thereof, including
(without limitation) the indemnification provisions set forth therein. To the
extent of any conflict between the terms hereof and thereof, the terms of the
Agreement shall be controlling.
All capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Agreement unless the context clearly requires otherwise.
IN WITNESS WHEREOF, Seller has duly executed this Bill of Sale as of this
1st day of December, 1995, to be effective as of December 1, 1995.
Seller: Robert G. Mann, M.D., P.A.
By: /s/ Robert G. Mann, M.D., P.A.
Its: President
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EXHIBIT E
ASSIGNMENT AND ASSUMPTION AGREEMENT
KNOW ALL MEN, that Robert G. Mann, M.D., P.A., ("Assignor"), for good and
sufficient consideration the value of which is hereby acknowledged, does hereby
assign to UCI Medical Affiliates of South Carolina, Inc., a South Carolina
corporation ("Assignee") all of Assignor's right, title and interest in and to
the intangible assets and rights composing portions of the Assets as described
in the Asset Purchase Agreement dated as of December 1, 1995 by, between and
among Assignor, Assignee, UCI Medical Affiliates, Inc. and Doctor's Care, P.A.
(the "Agreement"), all as provided in the Agreement.
Assignee hereby covenants with Assignor to assume and faithfully perform and
discharge all of the terms, covenants, liabilities and obligations (subject to
the Agreement) maturing and to be performed or discharged by Assignor under the
above assigned contracts and warranties beginning on December 1, 1995 and
henceforth.
This Assignment is made, executed, and delivered pursuant to the Agreement, and
is subject to all the terms, provisions and conditions thereof, including
(without limitation) the indemnification provisions therein. To the extent of
any conflict between the terms hereof and thereof, the terms of the Agreement
shall be controlling.
All capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Agreement unless the context clearly requires otherwise.
IN WITNESS WHEREOF, the parties have duly executed this Assignment and
Assumption Agreement as of this 1st day of December, 1995, to be effective as of
December 1, 1995.
ASSIGNOR:
Robert G. Mann, M.D., P.A.
By: /s/ Robert G. Mann, M.D., P.A.
Its: President
ASSIGNEE:
UCI MEDICAL AFFILIATES
OF SOUTH CAROLINA, INC. (SEAL)
By: /s/ M.F. McFarland, III, M.D.
Its: President & Chief Executive Officer
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EXHIBIT F
STATE OF SOUTH CAROLINA )
EMPLOYMENT AGREEMENT
COUNTY OF GREENVILLE )
THIS AGREEMENT made and entered into this 1st day of December,
1995 between Doctor's Care, P. A. (hereinafter "Employer"), a South
Carolina Professional Association with its principal office in
Columbia, South Carolina, and Robert G. Mann, M.D. (hereinafter
"Employee)
WHEREAS, Employer is a South Carolina Professional Association and
wishes to employ the Employee to render services for it; and,
WHEREAS, Employee is a licensed physician in South Carolina and desires
and is willing to become a professional employee of Employer, in accordance with
the following terms, conditions, and provisions:
NOW, THEREFORE, for and in consideration of the promises herein and
other valuable consideration, it is agreed that:
(1) Employment Term. Subject to the provisions for termination as
hereinafter provided, the term of this Agreement shall be five (5) years
beginning December 1, 1995. After the initial five (5) year term, this Agreement
shall be renewable upon the mutual agreement of both parties.
(2) Duties.
(A) Employee shall devote his full-time and
professional skill and attention to the
performance of services in the practice for
the benefit of Employer at 1601 Cedar
Lane Road, Greenville, SC 29611 or such
other location within the Berea area as shall
be reasonably assigned by Employer.
Employee's duty schedule shall be determined
by Employer, and Employee shall provide such
emergency evening and weekend coverage as
shall be needed and be reasonably assigned
to Employee by Employer. From December 1,
1995 through December 31, 1997 Employer
shall work for Employer an average of not
less than forty (40) hours per week but in no
case more than fifty (50) hours per week.
Beginning January 1, 1998 through December
31, 1998, Employee has the option, at his
discretion, of reducing by up to fifty
percent the number of hours he shall work
for Employer, with a proportionate, pro-rata
reduction in Employee's compensation.
Beginning January, 1999, Employee has the
option, at his discretion of reducing by
up to 67 percent of his pre January 1, 1998
working hours the number of hours he shall
work for Employer, with a proportionate,
pro-rata reduction in compensation.
(B) Employee shall not engage in any
outside professional activities involving the
personal services of Employee and yielding a
financial return without Employer's prior
written consent. However, nothing stated
herein shall restrict or prevent employee
from personally and on Employee's own
account, investing in stocks, bond
securities, commodities, real estate, or
other forms of investments.
(C) Employee will actively and
industriously pursue his profession in
Employer's interest, will faithfully adhere
to the principles and ethics of the
profession, and will carefully avoid any and
all personal acts, habits and usages which
might injure in any way, directly or
indirectly, Employer's professional
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reputation or that of any other employee of
Employer, or which might otherwise be
detrimental to any interest of Employer.
(D) Employee hereby agrees that all fees
received or collected as a result of professional
services rendered by Employee, together with all
other emoluments, e.g., witness fees, report fees,
speaker fees, etc., shall be the property of
Employer. Accordingly, Employee acknowledges that
Employee's employment renders him an agent and
servant of Employer and does not confer upon Employee
any ownership interest in or professional claim upon
any fees charged by Employer for Employee's services,
whether said fees are collected during Employee's
employment or after termination thereof.
(3) Compensation.
(A) Regular Compensation. For services
rendered under this Agreement, Employer shall pay the
Employee an initial salary of One Hundred-Sixty
Thousand Dollars & 00/100 Dollars ($160,000.00) per
year payable biweekly unless otherwise requested by
Employee and approved by Employer, provided however,
that any election by Employer pursuant to Section
2(a) of the Agreement to reduce his working hours
shall result in a proportionate, pro-rata reduction
in Employee's level of compensation.
(B) Changes in Compensation. From time to
time, increases in the Employee's salary may be made,
said increases to be reflected on the "Schedule of
Compensation" attached hereto and made apart hereof.
(C) Bonuses. Employer may, from time to time
review Employee's compensation arrangement with
respect to the payment of a bonus for superior
performance and contributions to Employer. Factors to
be considered in making a bonus payment, if any,
shall include but not be limited to Employee's
demonstrated commitment to quality care, the results
of patient satisfaction surveys and patient audits,
employee's ability to build and enhance a patient
base, and Employee's contributions to the Employer's
accomplishment of company goals; provided however
that the decision to make bonus payments, if any,
shall be at the sole discretion of Employer.
(4) Fringe Benefits. As further consideration for the
performance by Employee of the services set forth herein,
Employee shall be eligible on a non-discriminatory basis for
participation in any tax qualified deferred compensation plan
maintained by Employer. However, Employee understands that the
decision to maintain any such plans shall be in sole
discretion of Employer.
(A) Health Insurance Coverage.
Employer shall provide health insurance for
Employee at its expense. Family coverage is
available at Employee's sole cost and
expense.
(B) Group Term Life Insurance
& Group Disability Insurance. Employer,
at its cost, shall furnish life and
disability insurance for Employee.
(5) Vacation and Professional Meetings. Beginning with the
first year of employment during this Agreement, Employee shall
be entitled to three weeks of paid vacation and an additional
one week of paid leave to attend conventions, professional
meetings, and continuing medical education. All above leave
shall be taken on reasonable prior notice and at such time or
times as shall be agreed to by Employer and that does not
interfere with
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proper operation of the Practice. Unused
vacation time may be carried over from year to year .
(6) Inability to Perform Essential Services. If Employee is
unable to perform the essential professional services
contemplated by this Agreement as a result of illness or
incapacity, Employee shall continue to receive for a period of
one month those employee benefits, if any, provided for
Employee by Employer. Anything to the contrary contained
herein notwithstanding, if Employee is not able to resume the
performance of such essential professional duties within one
(1) month and one day (1) of the date Employee was first
unable to perform such duties, Employee may be deemed, at the
sole discretion of the Employer, to have terminated this
Agreement and Employer shall have the right to pursue all
remedies set forth herein related to such a termination.
(7) Equipment and Expenses.
(A) Facilities. Employer shall provide and
pay for suitable office space and facilities,
furniture, fixtures, equipment, supplies, employees
and assistants necessary and appropriate for the
proper performance of the duties of Employee.
(B) Professional Liability Insurance.
Employer shall either pay or, upon proof of payment
by the Employee, reimburse the Employee for the cost
of Professional Liability (malpractice) Insurance
covering the Employee for services provided
hereinunder for claims as follows: the first One
Hundred Thousand Dollars ($100,000) in coverage shall
be through the South Carolina Medical Malpractice
Joint Underwriters Association ("JUA"); the excess
coverage shall be provided through the South Carolina
Patients' Compensation Fund ("PCF"). Employee
understands that the amount of coverage provided by
JUA and PCF may not be adequate to protect Employee
against all claims and that the responsibility of
securing additional insurance coverage, if any, is
solely that of Employee.
(8) Employee Death. If Employee dies while this Agreement is
in full force and effect, Employer shall pay to Employee's
named beneficiary, or in default of the named beneficiary to
Employee's estate, all salary accrued but unpaid through the
pay period which includes the date of Employee's death.
(9) Patients and Records. Employer and Employee agree that all
patient lists, records, and charts are the property of
Employer, and that upon termination of this Agreement,
Employee shall not be entitled to receive any patient lists,
records, or charts whether or not the Employee shall have seen
or attended any patient; provided however, if Employer becomes
insolvent or bankrupt, Employee shall be entitled to copies of
the medical records for those patients he has personally
treated. Record keeping for patients treated by Employee shall
be the sole responsibility of Employee, and Employee shall
complete all such charts and records for such patients in
accordance with professional standards.
(10) Policy Decisions. It is understood that Employer shall
have the sole and exclusive right of management over the
practice, including without limitation, the determination of
the professional standards to be observed, the determination
of the fees to be charged, and the determination of the office
hours to be maintained.
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(11) Conditions of Termination. Physicians
understands and agrees that cause for termination
of employment includes, but is not limited to the
following:
(A) At any time by mutual agreement
in writing between Employer and Employee.
(B) At the loss or the suspension of the
right to conduct the practice of medicine by
Employee, or the loss, or suspension of any right or
privilege necessary or incident thereto, or the loss,
suspension, or limitation of Employee's Controlled
Substance license, or if Employee performs any
negligent or intentional act which directly or
indirectly damages the reputation or property of
Employer.
(C) At the death of Employee, provided
however, that the provisions of this Agreement
regarding Employee's death shall be performed by the
Employer.
(D) At the option of the Employer, upon
thirty (30) days prior written notice for "good
cause", which shall mean failure of Employee to
provide the agreed duties hereunder or willful
violation by Employee of any of the terms of this
Agreement. In the event Employer exercises its rights
under this provision, Sections 13(B), 13(C) and 13(D)
of this Agreement shall be inapplicable.
(E) Upon a party hereto failing to perform
any covenant or condition hereunder within thirty
(30) days after written notice and demand, the
non-defaulting party may terminate this Agreement. In
the event Employer exercises its rights under this
provision, Sections 13(B), 13(C) and 13(D) of this
Agreement shall be inapplicable.
(F) Upon the bankruptcy, insolvency or
assignment for the benefit of the creditors of
Employer, or any other type of voluntary or
involuntary creditors proceeding involving the
property of Employer. If any of these specific events
should occur, Sections 13(B), 13(C) and 13(D) of this
Agreement shall be inapplicable.
(G) Upon Employee's failure to
satisfactorily comply with accepted standards of
medical practice and professional conduct.
(H) If Employee engages in the abuse of
drugs, intoxicants or other mood-altering substances
or if Employee treats or attempts to treat a patient
while under the influence of drugs, intoxicants or
other mood-altering substances.
(I) Upon thirty days notice, at the option
of the Employer if Employee does not satisfy the
credentialing requirements of any managed care or
other insurance or reimbursement plan in which
Employer participates.
(12) Non-Disclosure of Information. Employee shall not, at any
time after the date hereof, directly or indirectly, divulge or
disclose for any purpose whatsoever any confidential
information that has been developed or obtained by, or
disclosed to, Employee by Employer at any time or after the
date hereof (exclusive of such information as is in the public
domain). Employee acknowledges that such confidential
information is of a special and unique nature and value
relating to matters of Employer's business, including, without
limitation, Employer's patents, copyrights, proprietary
information, trade secrets, trademarks, systems, procedures,
manuals, confidential reports, records, operational expertise,
locations and lists of clients and potential clients, pricing
information and lists, marketing materials
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and methods, the nature and type of services rendered
by Employer, the methods used and preferred by
Employer's clients, and the fees paid by them (all of
which are deemed for all purposes to be confidential,
proprietary, and trade secrets of Employer). Any
confidential information in Employee's possession
shall be returned to Employer upon any termination or
expiration of this Agreement.
(13) Covenants Against Competition.
A. Exclusivity. For the period of Employee's
retention by Employer, Employee will not, directly or
indirectly, plan, operate, organize or otherwise be
involved in any primary or urgent care facility of a
type similar to those operated by Employer other than
on behalf of Employer. Employee further agrees that
so long as this Agreement is in effect, Employee will
not undertake the planning or organizing of any
business activity competitive with the work Employee
performs for Employer.
B. Restrictive Covenant. In
addition to (but not in limitation of) the
restrictions of Section 14 (A), for the
period of Employee's retention by Employer
plus a period of two (2) years after
termination of this Agreement, Employee shall
not, directly or indirectly engage
in, or assist another person or entity to
engage in, any sales of products and services
furnished (or similar business operated) by
Employer in competition with Employer
within a five (5) mile radius of the primary
Clinic maintained, managed or otherwise
controlled by Employer at which Employee
performed services during the term of
Employee's retention by Employer
(collectively, the "Territory").
C. Ownership. In addition to
(but not in limitation of) the restrictions
of Sections 14 A and B, for the period of
Employee's retention by Employer, Employee
shall not, directly or indirectly, own an
equity interest (other than as the holder
for investment purposes only of up to 2% of
the outstanding capital stock of any
corporation which is publicly traded on a
national stock exchange or the NASDAQ
National Market System, so long as
Employee is not a controlling person of, or
a member of a group that controls, such
corporation and Employee is not otherwise
affiliated in any capacity with such
corporation) in any entity or enterprise
conducting operations in the Territory
which is competitive with Employer's
business activities.
D. Employees. In addition to
(but not in limitation of) the restrictions
of (Sections A, B and C), for the period of
Employee's retention by Employer, plus a
period of two years after termination of this
Agreement , Employee shall not, directly or
indirectly, solicit or in any manner attempt
to solicit or induce any person employed by,
or an agent of, Employer to terminate such
person's association or contract of
employment or agency, as the case may be,
with Employer.
(14) Remedy for Violation. Employer and Employee agree that
remedies at law are inadequate and that Employer may seek
injunctive relief in the event of violation of this covenant.
In addition, it is agreed that the actual damages occasioned
by any breach of the covenants by Employee not to solicit
and/or perform services except as provided above will not be
susceptible to exact determination and Employer shall be
entitled to liquidated damages in an amount equal to three (3)
times the gross fees billed by Employer to any such patients
solicited or treated in violation of this covenant during the
two (2) year (twenty four (24) month) period immediately
preceding the violation of this covenant.
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(15) Binding Agreement. This Agreement shall
be binding on the parties, their distributees,
legal representatives, successors and assigns.
(16) Notices. All notices under this Agreement shall be in
writing and shall be served by personal service or registered
mail, return receipt requested. Notice by mail shall be
addressed to each party at such party's last known address.
(17) Cost of Enforcement. Employer and Employee each hereby
agree that should they default in any of the obligations
contained herein, the defaulting party shall pay all costs and
expenses, including a reasonable attorney's fee which may
arise or accrue from enforcing this Agreement or in pursuing
any remedy provided by the statutes of the State of South
Carolina, whether such remedy is pursued by filing a suit or
otherwise.
(18) Captions. Captions and paragraph headings used
herein are for convenience only and are not a part of this
Agreement and shall not be used in construing it.
(19) Governing Law. This Agreement shall be
governed by the Laws of the State of South Carolina.
(20) Waiver. Waiver by either party of a breach or violation
of any provision of this Agreement shall not operate as or be
construed as a waiver of any subsequent breach thereof.
(21) Severability. If any provision of this Agreement, or
portion thereof, shall be declared invalid or unenforceable,
the remainder of this Agreement shall continue in full force
and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
set forth above.
DOCTOR'S CARE, P. A.
EMPLOYER:
By: /s/ M.F. McFarland, III, M.D.
M.F. McFarland, III, M.D.
Its: President
EMPLOYEE:
/s/ Robert G. Mann
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SCHEDULE OF COMPENSATION
<TABLE>
<CAPTION>
Agreed To
Date Change Effective New Annual Salary Employer Employee
<S> <C> <C> <C>
December 1, 1995 $160,000
</TABLE>
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BENEFITS
1. Beginning with first year of employment:
A. Three weeks (120 hours) paid vacation.
B One week of paid leave for continuing education.
C. Participation in 401-K program after 90 days of employment.
D. Membership in the South Carolina Medical Society to be
furnished.
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EXHIBIT 10.1
PROMISSORY NOTE
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PROMISSORY NOTE
COLUMBIA, SOUTH CAROLINA
$30,000.00 DECEMBER 1, 1995
FOR VALUE RECEIVED, UCI Medical Affiliates of South Carolina, Inc., a South
Carolina corporation (the "Borrower") promises to pay, in lawful money of the
United States of America, to the order to Robert G. Mann, M.D., P.A. (the
"Lender") the principal sum of Thirty Thousand and no/100 ($30,000.00) Dollars,
together with interest thereon from the date hereof at the rate of Nine (9.0%)
percent per annum, due and payable on or before April 1, 1996.
Anything contained in this Note to the contrary notwithstanding, Borrower shall
have the right to set off and recoupment against amounts coming due hereunder in
the event that Lender discontinues his employment in violation of that certain
Employment Agreement entered into between Borrower and Lender contemporaneously
with this Promissory Note, or materially breaches any other provisions of that
certain Asset Purchase Agreement also entered into between Borrower and Lender
contemporaneously with this Promissory Note; provided, however, Borrower shall
not be entitled to any right of set off unless it pays debts of Lender or
Borrower's damages are otherwise ascertainable. In the event Borrower elects to
exercise the right of set off and recoupment as set forth herein, upon thirty
(30) days' notice to the Lender, the principal amount hereof shall be deemed
reduced by the amount of any set off or recoupment to which the Borrower is
entitled, and all interest and payments accruing thereafter shall be calculated
based upon such reduced principal amount. The Lender's right to lawfully contest
such set off or recoupment in any action to collect this Note shall not be
impaired by Borrower's exercise of such set off or recoupment rights. The
inclusion of this special set off or recoupment provision shall not affect the
availability, if any, of rights of set off or recoupment arising at law or in
equity.
The occurrence of the following shall constitute an "Event of Default" under the
Note: Borrower, after the expiration of the applicable grace period hereinafter
set forth, fails to pay when due any principal or interest payment hereunder
(except for any amount then subject to an unresolved but duly asserted set off
or recoupment dispute). Upon the occurrence of an Event of Default as
hereinabove defined, then at any time hereafter, the Lender may declare the
entire remaining principal balance due hereunder, together with all accrued
interest thereof immediately due and payable. The applicable grace period
hereunder shall be ten (10) days and shall begin to run upon receipt by Borrower
of written notice from Lender of a potential default hereunder.
The invalidity of any provision of this Note shall not affect the validity of
any other provisions hereof. The acceptance after maturity of any payment with
respect of this Note shall not constitute a waiver of the right of Lender to
demand the payment in full of any unpaid balance. No delay or failure on the
part of Lender in the exercise of any right or remedy shall operate as a waiver
thereof, and no single exercise of any right or remedy shall preclude Lender
from the exercise of any other rights or remedies.
In the event this Note is placed in the hands of an attorney for collection (but
not for resolution of any disputes on a set off or recoupment of the amount due
hereunder, unless such set off or recoupment is done so negligently or
improperly), all expenses of the Lender, including reasonable attorney fees,
shall be added to the principal amount of this Note and collected as a part
hereof. This Note shall be governed by and construed in accordance with the laws
of the State of South Carolina. Jurisdiction and venue for the enforcement of
this Note shall be exclusive in the County of Greenville, State of South
Carolina.
Borrower expressly waives demand, presentment, protest, and notice of
non-payment or dishonor, and all other notices or demands whatsoever (except for
notices expressly set forth herein), and such parties agree to maintain bound
hereby until all amounts due hereunder are paid in full, notwithstanding any
extension of time for payment which may be granted, even though the period of
extension be indefinite.
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The Borrower reserves the right to prepay this Note in whole or in part at any
time without fee for penalty; provided, however, that any partial payment shall
be applied first to accrued interest and then to the reduction of the principal.
Executed this 1st day of December, 1995.
UCI MEDICAL AFFILIATES OF
SOUTH CAROLINA, INC.
By: /s/ M.F. McFarland, III, M.D.
Its: President & Chief Executive Officer
Notice Address for Borrower:
6168 St. Andrews Road
Columbia, South Carolina 29212
Attention: Stephen Seeling, Esquire
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