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: September 9, 1997
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UCI Medical Affiliates, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-13265 59-2225346
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
1901 Main Street, Suite 1200, Mail Code 1105, Columbia, South Carolina 29201
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (803) 252-3661
-----------------------
No Change
(Former name or former address, if changed since last report.)
This document contains a total of 19 pages and the Exhibit Index is set
forth on sequentially numbered page 4.
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Pursuant to the terms of an Asset Purchase Agreement dated and executed on
September 9, 1997, 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 Leif Martin Adams, D.O., a South Carolina resident ("Seller"). UCI
of SC has acquired certain assets (including patient list and goodwill)
associated with the medical practice owned and operated by Seller in
Summerville, South Carolina. The consideration for the acquisition shall be One
Hundred Thousand and no/100 ($100,000.00) Dollars payable as outlined in Section
3 of the Asset Purchase Agreement, referenced above, which begins on page 6 of
this Form 8-K. The consideration paid by UCI of SC in connection with this
acquisition was determined by arms-length negotiations between UCI of SC 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. This
center will be combined with and operated under our existing Doctor's Care
Summerville center.
All descriptions of the Asset Purchase Agreement 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
It is impracticable to provide the required financial statements
for the business acquired at the time this Report on Form 8-K is
filed. UCI will file the required financial statements for the
Seller under cover of Form 8-K as soon as practicable, but not
later than 60 days after this Report on Form 8-K is due to be
filed.
b) Pro Forma Financial Information
It is impracticable to provide the required pro forma financial
information at the time this Report on Form 8-K is filed. UCI will
file the required pro forma financial information under cover of
Form 8-K as soon as practicable, but not later than 60 days after
this Report on Form 8-K is due to be filed.
c) Exhibits
Exhibit 2.1 - Asset Purchase Agreement dated and executed on
September 9, 1997, 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
Leif Martin Adams, D.O., a South Carolina resident ("Seller").
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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/ Marion F. McFarland, III, M.D. /s/ Jerry F. Wells, Jr.
Marion F. McFarland, III, M.D. Jerry F. Wells, Jr., CPA
President, Chief Executive Officer and Executive Vice President of
Chairman of the Board Finance and Chief Financial Officer
Date: September 15, 1997
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UCI MEDICAL AFFILIATES, INC.
EXHIBIT INDEX
TO
FORM 8-K
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
2.1 Asset Purchase Agreement dated and executed on 6
September 9, 1997, 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 Leif Martin Adams, D.O.,
a South Carolina resident ("Seller").
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EXHIBIT NO. 2.1
ASSET PURCHASE AGREEMENT
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is made as of the 9th day
of September, 1997, 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 Leif Martin Adams, D.O., a South Carolina resident ("Seller").
INTRODUCTION. Seller owns and operates a medical practice located at 100
Harth Place, Summerville, South Carolina 29485 (the "Premises"). Seller is the
sole owner of the Business (as defined in Section 1.1.1 herein below). 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) transfer Seller's patient records to
Doctor's Care, (ii) enter into an Employment Agreement with Doctor's Care, and
(iii) transfer to UCI of SC as of 11:59 p.m. on September 9, 1997 (the
"Effective Date"), certain assets of the Seller, all upon the terms and
conditions set forth herein.
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. As of the Effective Date, 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 the
"Assets"):
1.1.1 All of the accounts receivable, machinery, equipment,
computer and telephone systems (including hardware and software),
inventory, furniture, furnishings, office equipment, and related tangible
personal property respecting Seller's business conducted in the Premises
(the "Business"), excluding only the Excluded Assets (as defined in Section
1.2 below).
1.1.2 All of the goodwill, permits, licenses, computer software
and related intangible personal property of the Business, excluding only
the Excluded Assets (as defined in Section 1.2 below). Seller shall be
responsible for obtaining the necessary consents, if any, to assignment of
such intangible assets. The parties hereto acknowledge and agree that UCI
of SC shall not assume any equipment leases, personal property leases, real
property leases, or any other liabilities of Seller.
1.1.3 All of the inventory of the Business, wherever located,
excluding only the Excluded Assets (as defined in Section 1.2 below).
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 Excluded Assets. Anything contained in this Agreement to the contrary
notwithstanding, the parties hereto acknowledge and agree that Seller will not
sell, assign, or convey to UCI of SC, and UCI of SC will not acquire, any right,
title, or interest whatsoever in or to any of the assets or property of Seller
listed in
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Exhibit 1.2 attached hereto (collectively the "Excluded Assets"). Neither UCI,
UCI of SC, nor Doctor's Care shall be an insurer of the safety or condition of
the Excluded Assets after Closing; and Seller shall retain the risk of loss with
respect to any Excluded Assets after Closing.
1.3 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 and/or Doctor's Care at Closing
(as defined below), as set forth in this Agreement.
1.4 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 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 (except the Excluded Assets and any real property used in the
Business).
1.5 Possession. UCI of SC shall take, and Seller shall deliver, possession
of the Assets at completion of Closing (as defined below) to be effective as of
the Effective Date (as defined below). UCI of SC will make all reasonable
efforts to complete removal of the Assets located at the Business within fifteen
(15) days after Closing. Seller shall not be an insurer of the safety or
condition of the Assets after Closing; and UCI of SC shall bear the risk of loss
with respect to any Assets after Closing.
2. TRANSFER OF SELLER'S PATIENT RECORDS TO DOCTOR'S CARE.
2.1 Transfer of Patient Records. As of the Effective Date, for valuable
consideration the receipt and sufficiency of which is hereby acknowledged and no
other monetary consideration, Seller shall transfer and deliver to Doctor's Care
all of the Seller's right, title and interest in and to any medical records in
his possession that were made in treating patients and all records transferred
to Seller concerning prior treatment of any patient (the "Patient Records").
2.2 Method of Transfer. The transfer of the Patient Records will be
evidenced by an appropriate bill of sale substantially in the form attached
hereto as Exhibit 2.2, executed and delivered by Seller to Doctor's Care at the
Closing (as defined below), 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 (as defined below), to
be effective as of the Effective Date.
3. CONSIDERATION FOR ACQUISITIONS.
3.1 Purchase Price. The purchase price ("Purchase Price") for the Assets to
be acquired by UCI of SC shall be One Hundred Thousand and No/100 ($100,000.00)
Dollars payable to Seller as follows:
3.1.1 Common Stock. At Closing (as defined below), UCI shall issue
to Seller certificate(s) representing such numbers of shares of the voting
common stock of UCI, $0.05 par value (the "Shares"), having an aggregate
value of Fifty Thousand and No/100 ($50,000.00) Dollars. For purposes
hereof, the price per share of the Shares shall be the closing ask price of
such voting common stock on Friday, September 5, 1997. The parties hereto
acknowledge that the Shares shall be "restricted stock" under the federal
securities laws (meaning that it was purchased other than through a
registered public offering). SEC Rule 144 will allow Seller to resell the
Shares in the public market if certain conditions contained therein are
satisfied. The Shares, when issued, will be duly authorized, validly
issued, fully paid and non-assessable. The certificate evidencing the
Shares shall bear a restrictive legend in substantially the following form:
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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 Seven Thousand and No/100 ($7,000.00) Dollars
shall be paid to Seller at Closing (as defined below).
(2) The sum of Forty-Three Thousand and No/100 ($43,000.00)
Dollars shall be due and payable to Seller in thirteen (13)
monthly installments, with the first payment due on or about one
month after the Effective Date, pursuant to a promissory note
substantially in the form attached hereto as Exhibit 3.1.2 (the
"Note").
4. CLOSING.
4.1 Closing Date. The closing of the sale and purchase of the Assets and
related transactions (the "Closing") shall take place on Tuesday, September 9,
1997, commencing at 2:00 p.m. (local time), at the offices of Nexsen Pruet
Jacobs & Pollard, LLP at 1441 Main Street, Suite 1500, Columbia, South Carolina,
all to be effective as of the Effective Date. 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.
4.2. Transactions at Closing. At the Closing:
4.2.1 Upon receipt of an investment letter in the form of Exhibit
4.2.1 attached hereto duly executed by Seller, UCI shall issue to Seller 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 UCI of SC shall execute and deliver to Seller the Note.
4.2.3 Seller shall execute and deliver to UCI, 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.
4.2.4 UCI, UCI of SC, and Doctor's Care shall execute and deliver
to Seller the documents, agreements and instruments in form and substance
required by this Agreement, as described in Section 4.4.
4.2.5 Seller and Doctor's Care shall each execute and deliver to
the other the employment agreement substantially in the form of Exhibit
4.2.5 attached hereto (the "Employment Agreement").
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4.2.6 All employees of Seller directly and primarily associated
with the Business will cease to be employees of Seller, and Doctor's Care
and/or UCI of SC may, subject to the exercise of Doctor's Care's and/or UCI
of SC'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 Effective Date.
4.2.7 UCI of SC shall reimburse Seller the sum of One Thousand One
Hundred Sixty-Two and 90/100 ($1,162.90) by company check for pre-paid
malpractice insurance premiums paid by Seller.
4.2.8 Seller shall pay to UCI of SC the sum of Ninety-Six and
94/100 ($96.94) Dollars by company check for the estimated person property
taxes payable by Seller as set forth in Section 8.2 below.
4.2.9 The parties hereto 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 Seller will execute and deliver to UCI of SC a bill of sale
for tangible personal property and fixtures composing portions of the
Assets substantially in the form attached hereto as Exhibit 4.3.1.
4.3.2 Seller will execute and deliver to UCI of SC an assignment
of intangible personal property composing portions of the Assets
substantially in the form attached hereto as Exhibit 4.3.2.
4.3.3 Seller will execute and deliver to UCI an Investment Letter
substantially in the form attached hereto as Exhibit 4.2.1.
4.3.4 Seller will execute and deliver to Doctor's Care the
Employment Agreement substantially in the form attached hereto as Exhibit
4.2.5.
4.3.5 Seller will execute and deliver to UCI of SC copies of such
duly filed UCC termination statements, mortgages or lien satisfactions and
other documents, as are reasonably required by UCI of SC to evidence UCI of
SC's clear, marketable and insurable title to the Assets.
4.3.6 Seller will execute and deliver to UCI of SC the
Non-Competition Covenant (the "Non-Compete") substantially in the form
attached hereto as Exhibit 4.3.6.
4.3.7 Seller will execute and deliver to Doctor's Care a bill of
sale for the Patient Records substantially in the form attached hereto as
Exhibit 2.2.
4.3.8 Evidence of insurance as set forth in Section 5.7 to UCI
of SC.
4.3.9 Copies of all current data, contracts and information for
the Business.
4.4 Documents of UCI, UCI of SC, or Doctor's Care. At Closing, UCI,
Doctor's Care, and/or UCI of SC, at their expense, shall deliver or cause to be
delivered to Seller the following duly executed, lawful, and effective documents
and instruments:
4.4.1 UCI shall deliver 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.
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4.4.2 UCI of SC will execute and deliver to Seller the Note
substantially in the form attached hereto as Exhibit 3.1.2.
4.4.3 Doctor's Care will execute and deliver the Employment
Agreement substantially in the form attached hereto as Exhibit 4.2.5.
4.5 Conditions of Title. 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 valorem taxes
for the year of Closing (which shall be prorated as provided in this Agreement).
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 Effective Date.
4.6.2 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).
4.6.3 Publicity. Upon UCI of SC's request (if any), at a date
reasonably agreed upon by UCI of SC and Seller, but no later than thirty
(30) business days after Closing, Seller, at UCI of SC's expense, shall
mail to all those patients of the Business designated by UCI of SC a letter
substantially on the form provided by UCI of SC, subject to Seller's
approval (which shall not be unreasonably withheld) and in compliance with
the cannons of medical ethics, advising of the sale hereunder and
containing a request of Seller that to the extent requested by UCI of SC,
such patient shall continue its relationships with UCI of SC and Doctor's
Care.
4.6.4 Taxes. Seller shall file such tax returns and reports and
pay such taxes as are required for periods ending with the Effective 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.
4.6.6 Seller's Computer Equipment. The parties hereto acknowledge
and agree that for a period of up to four (4) months after the date of
Closing, the computer equipment of Seller shall continue to be utilized by
employees of UCI of SC to assist in the collection of the accounts
receivable of Seller assigned hereunder. The parities hereto anticipate
that such computer equipment shall be moved for such period to UCI of SC's
offices located at 10160 Dorchester Road, Summerville, South Carolina. UCI
of SC shall move such equipment to UCI of SC's facility, and return such
equipment to 100 Harth Place, Summerville, South Carolina, at UCI of SC's
sole cost and expense. UCI of SC shall return the computer equipment to
Seller in substantially the same condition as the equipment was in when the
equipment was taken into the custody of UCI of SC, such custody commencing
when UCI of SC picks-up such equipment from Seller and ending when such
equipment is returned to Seller. UCI of SC shall reimburse Seller for any
damage to the equipment incurred while such equipment was in its custody.
4.6.7 Miscellaneous Required Acts. The parties hereto 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 Sole Proprietorship. Seller is a sole proprietorship with authority to
carry on the Business and to own and operate its properties and assets as
presently owned and operated. The Assets are not owned in whole or in part by
any corporation, limited liability company, or partnership.
5.2 Authority. When executed and delivered, this Agreement shall constitute
a valid and binding obligation of Seller enforceable in accordance with its
terms and conditions except as enforcement may be limited by applicable
bankruptcy, 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 the
compliance with any of the terms and conditions hereof, will result in the
breach by Seller of any of the terms, conditions, or provisions of any trust,
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.
5.3 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 and the Premises, 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, health, OSHA, consumer
products, and fire safety regulations.
5.4 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 and/or Premises
for which any such person or entity could claim a lien against the Assets.
5.5 Consents. No consent of any third party is required in connection with
Seller's transfer and assignment of the Assets hereunder.
5.6 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 the Premises, or to the conduct of the 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 and/or Doctor's Care.
5.7 Insurance Coverage. Seller maintains policies of insurance covering the
Assets and Premises in amounts and against such losses and risks as are
customary for facilities such as the Business in their present usage, as well as
general public liability "occurrence" coverage in the amount of $1,000,000 per
occurrence and $1,000,000 in the aggregate, and same will be outstanding and
duly in force through Closing, and UCI of SC, UCI, and Doctor's Care shall be
listed as additional insureds under such policy.
5.8 Normal Course. Seller shall have operated the Assets in the normal and
ordinary course of business since at least January 1, 1995, and shall have paid
or caused to be paid promptly when due all city, county and state ad valorem
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
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preserve the goodwill of the employees, patients, suppliers and others having
business relationships with the Business through Closing.
5.9 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.
5.10 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,
cash bonus, 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.
5.11 Payables and Taxes. Seller will pay all accounts payable and taxes,
assessments, and charges respecting the Assets incurring prior to the Effective
Date within 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 prior to the Effective Date and which affect the Assets.
5.12 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.
5.13 Status of Assets. The Assets sold hereunder constitute all of the
assets of the Business (except the Excluded Assets) 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 presently 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, and similar rights which are portions of the Assets are valid,
binding, enforceable, and without known default in violation of law. The
information related to accounts receivable provided to UCI of SC is materially
accurate, and such accounts receivable reflect valid, binding, and enforceable
rights of the Business which shall be lawfully transferred to UCI of SC
hereunder.
5.14 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, or might otherwise impede UCI of SC's ability to operate a business
similar to the Business utilizing the Assets.
5.15 Brokerage. Seller has not dealt with any 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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5.16 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 is materially true, correct, and complete, and not
materially misleading.
5.17 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 true as of the 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.
6. REPRESENTATIONS AND WARRANTIES OF UCI, DOCTOR'S CARE, AND UCI OF SC. UCI,
Doctor's Care, and UCI of SC hereby jointly and severally 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. 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 trust, order, judgment,
law, or other contract, agreement or instrument to which any of them is a party,
or by which any of them 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 validity of this Agreement or any transaction
contemplated hereby, which if adversely determined would have a material adverse
effect upon their ability to enter into this Agreement or perform their
respective obligations hereunder.
6.6 Creditors, Solvency and Bankruptcy. Neither UCI, Doctor's Care, nor UCI
of SC shall hinder, delay, defraud or avoid any obligations to any past, present
or future creditor of UCI, Doctor's Care, or UCI of SC respectively 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. Neither UCI, Doctor's Care, nor UCI of SC
intends to initiate with respect to themselves as debtors, nor do they expect to
have initiated against themselves as debtors, any proceeding under federal or
any state's bankruptcy, insolvency or similar laws.
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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 as
of the 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.
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.
7.2 Conditions of Seller. The obligations of Seller hereunder shall be
subject, to the extent not waived, to the satisfaction of each of the following
conditions at the Closing:
7.2.1 Representation and Warranties. The representations and
warranties of UCI, UCI of SC, and Doctor's Care 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.
7.2.2 Deliveries. The release of documents that UCI, UCI of SC,
and Doctor's Care are 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. Seller 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 RIGHTS.
9.1 General Indemnity.
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9.1.1 By Seller. 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, 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 of SC as a result of any 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.
9.1.2 By UCI, UCI of SC, Doctor's Care. UCI, UCI of SC, and
Doctor's Care shall jointly and severally indemnify and hold Seller harmless
from any and all losses, damages, liabilities, claims, suits, demands,
penalties, assessments, obligations, causes of actions or costs (including
reasonable litigation expenses and legal fees) asserted against or incurred by
Seller as a result of any breach by UCI, UCI of SC, or Doctor's Care of any
covenant, warranty representation, or agreement, made by UCI, UCI of SC, or
Doctor's Care herein or in agreements related hereto including but not limited
to litigation expenses and legal fees that might be incurred because of such
breach.
9.2 Special Indemnities. Seller shall indemnify and hold UCI, UCI of SC and
Doctor's Care and their respective officers, directors, and agents harmless from
any and all losses, damages, liabilities, claims, suits, demands, penalties,
assessments, obligations, causes of action, or costs (including reasonable
litigation expenses and legal fees) asserted against or incurred by UCI,
Doctor's Care, or UCI of SC as a result of:
9.2.1 Award or Settlement. Any lawsuit or similar claim against
Seller arising from events or conditions prior to the Effective Date.
9.2.2 Title to Assets. Any challenge to: (a) Seller's title to the
Assets, or (b) the transfer of such title and interest to the Assets to UCI
of SC or Doctor's Care pursuant to the Agreement.
9.2.3 Accounts Payable. Any accounts payable, taxes, assessments,
or charges of Seller.
9.3 Set Off and Recoupment. In addition to any other available remedies,
UCI of SC, UCI, and Doctor's Care shall have the right of set off and recoupment
against amounts coming due to Seller under this Agreement, the Employment
Agreement, the Note, or any other instruments ancillary hereto in the event
Seller breaches this Agreement or any document related hereto or any right of
indemnification arises in favor of UCI, UCI of SC, or Doctor's Care under this
Agreement. Seller retains the right to lawfully contest any such set off or
recoupment in an action to collect any amounts due Seller under this Agreement,
the Employment Agreement, the Note, or such other ancillary instruments. The
inclusion of this special set off or recoupment provision shall not effect the
availability, if any, of rights of set off or recoupment arising at law or in
equity.
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
UCI of SC hereunder, if any. All property taxes assessed against the Assets sold
hereby shall be prorated as of the Effective Date, and Seller shall promptly pay
when due, or reimburse UCI of SC for, all such taxes which remain the Seller's
responsibility.
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 such event, UCI of SC must
within five (5) days of receipt of such notice either:
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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 not be unreasonably
withheld. Seller shall cooperate with the collection of such amounts. 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.
12. CROSS-DEFAULT. Notwithstanding anything contained herein to the contrary, in
the event Seller breaches this Agreement, the Employment Agreement, the
Non-Compete, the Investment Letter, or any other agreement or instrument
ancillary hereto to which it is a party, such breach thereof (at the expiration
of the applicable grace period set forth therein) shall constitute a breach by
Seller of this Agreement.
13. MISCELLANEOUS.
13.1 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.
13.2 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.
13.3 Survival. All representations, warranties, covenants, and agreements
herein contained shall survive the Closing hereunder.
13.4 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.
13.5 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:
UCI: UCI Medical Affiliates, Inc.
1901 Main Street, Suite 1200
Columbia, SC 29201
Attn.: Jerry F. Wells, Jr.
UCI of SC: UCI Medical Affiliates of South Carolina, Inc.
1901 Main Street, Suite 1200
Columbia, SC 29201
Attn.: Jerry F. Wells, Jr.
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Doctor's Care: Doctor's Care, P.A.
1901 Main Street, Suite 1200
Columbia, SC 29201
Attn.: M.F. McFarland, III, M.D.
Seller: Leif Martin Adams, D.O.
222 Brailsford Road
Summerville, SC 29485
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.
13.6 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.
13.7 Successors and Assigns. This Agreement shall be binding upon the
parties, and their respective successors, heirs, and assigns, and shall inure to
the benefit of the parties and their respective successors, heirs, and permitted
assigns.
13.8 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.
13.9 Choice of Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of South Carolina.
13.10 Jurisdiction. The parties hereto consent to exclusive jurisdiction,
subject to proper service of process, in the State of South Carolina regarding
any disputes arising hereunder.
13.11 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.
13.12 No Inference Against Author. No provision of this Agreement shall be
interpreted against any party because such party or its legal representative
drafted such provision.
13.13 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 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.
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13.14 Assignment. This Agreement is not assignable by any party without the
prior written consent of the other parties 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 officers, this 9th day of September, 1997.
UCI OF SC: SELLER:
UCI MEDICAL AFFILIATES OF
SOUTH CAROLINA, INC.
/s/ Leif Martin Adams, D. O.
Leif Martin Adams, D.O.
By: /s/ Jerry F. Wells, Jr.
Its: Executive Vice President of Finance
and Chief Financial Officer
DOCTOR'S CARE: UCI
DOCTOR'S CARE, P.A. UCI MEDICAL AFFILIATES, INC.
By: /s/ Jerry F. Wells, Jr. By: /s/ Jerry F. Wells, Jr.
Its: Executive Vice President of Finance, Its: Executive Vice President of
Chief Financial Officer & Secretary Finance and Chief
Financial Officer
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INDEX OF EXHIBITS
Exhibit 1.2 List of Excluded Assets
Exhibit 2.2 Bill of Sale - Patient Records
Exhibit 3.1.2 Promissory Note
Exhibit 4.2.1 Investment Letter
Exhibit 4.2.5 Employment Agreement
Exhibit 4.3.1 Bill of Sale
Exhibit 4.3.2 Assignment
Exhibit 4.3.6 Non-Competition Covenant
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