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: March 1, 1997
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UCI Medical Affiliates, Inc.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 0-13265 59-2225346
(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.)
</TABLE>
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
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No Change
(Former name or former address, if changed
since last report.)
This document contains a total of 22 pages and the Exhibit Index is set
forth on sequentially numbered page 5 .
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Item 2. Acquisition or Disposition of Assets
Pursuant to the terms of an Asset Purchase Agreement (the "Agreement") executed
on February 18, 1998, to be effective March 1, 1998, 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 Allan M. Weldon, M.D., a South
Carolina resident ("Seller"). UCI of SC has acquired certain assets as outlined
in Sections 1 and 2 of the Agreement (including patient list and goodwill)
associated with Seller's practice located in Columbia, South Carolina. The
consideration for the acquisition shall be Two Hundred Thirty-Five Thousand and
00/100 ($235,000.00) Dollars, payable as outlined in Section 3 of the Agreement,
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
practice has been merged into the existing Midtown Family Practice Center
located in Columbia, South Carolina.
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/A 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/A as soon as practicable, but not later than 60 days
after this Report on Form 8-K is due to be filed.
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c) Exhibits
Exhibit 2.1 - Asset Purchase Agreement executed on February 18,
1998, to be effective March 1, 1998, 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 Allan M. Weldon, M.D., 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 Finance,
Chairman of the Board Chief Financial Officer and
Principal Accounting Officer
Date: March 11, 1998
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UCI MEDICAL AFFILIATES, INC.
EXHIBIT INDEX
TO
FORM 8-K
PAGE
NUMBER DESCRIPTION NUMBER
2.1 Asset Purchase Agreement executed on February 18, 6
1998, to be effective March 1, 1998, 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 Allan M. Weldon, M.D.,
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 this 18th
day of February, 1998, to be effective as of March 1, 1998, 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 Allan M. Weldon, M.D., a South
Carolina resident ("Seller").
Introduction. Seller owns and operates a medical practice located at
2757 Laurel Street, Columbia, South Carolina 29204 (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 12:01 a.m. on March 1, 1998 (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),
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 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.
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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 (excepting the Excluded Assets).
1.5 Possession. UCI of SC shall take, and Seller shall deliver, possession
of the Assets as of the Effective Date.
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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, at Seller's expense, any public
notices to be filed in a timely manner and to otherwise comply with all
requirements of the South Carolina Physician's Patient Records Act or any other
applicable law, regulation, rule or ordinance related to the transfer of the
Patient Records. Evidence of the filing of such notice shall be delivered by
Seller to Doctor's Care at Closing (as defined below).
2.4 Possession. Doctor's Care shall pick up and take, and Seller shall
relinquish, possession of the Patient Records as of the Effective Date.
3. Consideration for Acquisitions.
3.1. Purchase Price. The total purchase price ("Purchase Price") for
the Assets to be acquired by UCI of SC hereunder shall be Two Hundred
Thirty-Five Thousand and No/100 ($235,000.00) Dollars payable to Seller as
follows:
3.1.1 Common Stock. On the Effective Date, 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 Seventy-Five Thousand and No/100 ($75,000.00)
Dollars. For purposes hereof, the price per share of the Shares shall
be the closing ask price of such voting common stock on Friday,
February 13, 1998. 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). 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:
3.1.2.1 The sum of Fifty Thousand and No/100 ($50,000.00) Dollars shall be
paid by company check to Seller on the Effective Date.
3.1.2.2 The sum of One Hundred Ten Thousand and
No/100 ($110,000.00) Dollars shall be due and payable to
Seller in Thirty-Six (36) monthly installments, with the first
payment due on April 1, 1998, pursuant to a promissory note
substantially in the form attached hereto as Exhibit 3.1.2.2
(the "Note").
3.2 Assumption of Certain Leases. As of the Effective Date, UCI of SC
shall assume those leases of Seller described at Exhibit 3.2 attached hereto
(the "Assumed Leases"). The parties hereby acknowledge and agree that neither
UCI of SC, UCI, nor Doctor's Care shall assume or agree to pay, perform, or
discharge any liability or obligation of Seller which is not expressly set forth
at Exhibit 3.2 attached hereto. Seller shall be responsible for obtaining the
consent, if any, to the assumption of any such Assumed Leases by UCI of SC.
3.3 Allocation of Purchase Price. The parties hereto agree that the
Purchase Price for the Assets shall be allocated as provided in Exhibit 3.3
attached hereto.
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 Wednesday, February
18, 1998, commencing at 10:00 a.m. (local time), at the offices of Nexsen Pruet
Jacobs & Pollard, LLP at 1441 Main Street, Suite 1500, Columbia, South Carolina
or such other time and place as may be mutually agreed upon in writing by the
parties (alternatively "Closing"), 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 the Note.
4.2.3 Seller shall execute for delivery 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 for
delivery 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 for delivery
to the other the employment agreement substantially in the form of
Exhibit 4.2.5 attached hereto (the "Employment Agreement").
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 required 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 All the documents contemplated in this Section 4.2 shall be delivered
to the appropriate party on the Effective Date.
4.2.8 The parties hereto will take such other actions
contemplated at Closing by this Agreement.
4.3 Seller's Documents. On the Effective Date, 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 At Closing, Seller will execute for delivery 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 At Closing, Seller will execute for delivery 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 At Closing, Seller will execute for delivery to UCI an
Investment Letter substantially in the form attached hereto as Exhibit
4.2.1.
4.3.4 At Closing, Seller will execute for delivery to Doctor's
Care the Employment Agreement substantially in the form attached hereto
as Exhibit 4.2.5.
4.3.5 At Closing, Seller will execute for delivery 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.
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4.3.6 At Closing, Seller will execute for delivery 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 At Closing, Seller will execute for delivery 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 Seller will deliver to UCI of SC 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. On the Effective
Date, 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.
4.4.2 At Closing, UCI of SC will execute for delivery to
Seller the Note substantially in the form attached hereto as Exhibit
3.1.2.2.
4.4.3 At Closing, Doctor's Care will execute for delivery the
Employment Agreement substantially in the form attached hereto as
Exhibit 4.2.5.
4.5 Conditions of Title. As of the Effective Date, 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)
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 Employee Interviews. Within thirty (30) days after the
Effective Date, UCI of SC agrees to interview Seller's three (3)
employees (collectively the "Former Employees") for possible employment
with UCI of SC. Notwithstanding anything contained herein to the
contrary, UCI of SC shall be under no obligation to employ such Former
Employees; the decision by UCI of SC of whether or not to offer
employment to such Former Employees shall be made within the sole
discretion of UCI of SC, and UCI of SC may decline to offer employment
to such Former Employees for any or no reason.
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.
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, partnership, or other entity or
person.
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 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, the Premises or the Business. All of the Assets sold
hereunder, and the Premises leased hereunder, substantially comply with
applicable environmental, zoning, 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
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 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 to UCI of SC and/or Doctor's Care.
5.7 Insurance Coverage. Seller 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, as well as general
public liability "claims made" 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. For a period of one (1) year after Closing,
Seller shall maintain a comprehensive general liability "claims made" policy for
discontinued operations in the amount of $1,000,000 per occurrence, 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 and/or Premises prior to
the Effective Date. Seller shall exercise its best efforts to preserve the
goodwill of the employees, patients, suppliers and others having business
relationships with the Business through the Effective Date.
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 incurred prior to the
Effective Date within a reasonable amount of time following Closing and will
protect the reputations of UCI, UCI of SC and Doctor's Care, respectively, 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, including without limitation any payments on
the Assumed Leases which become due prior to the Effective Date, and which have
not been expressly assumed by UCI of SC pursuant to Section 3.2 hereunder.
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.
<PAGE>
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 the Effective Date 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 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.
5.16 Financial Statements. The financial statements attached hereto as
Exhibit 5.16 (collectively the "Financial Statements") consist of: (a) the
unaudited balance sheet and income statement of Seller as of December 31, 1997.
All the Financial Statements are true and correct and present fairly in all
material respects the financial condition and results of operations of Seller as
at their respective dates, including all material liabilities, contingent or
otherwise, and the results of operations of Seller for such periods in
accordance with generally accepted accounting principles consistently applied
during all such periods. All books and records of Seller upon which the
Financial Statements were based have been maintained in the normal course of
business and reflect in all material respects the transactions and results of
operations of Seller in accordance with generally accepted accounting principles
consistently applied during all such periods. There has been no material change
in the accounting methods or practices followed by Seller or in the
depreciation, amortization, or inventory valuation policies used or adopted by
Seller since fiscal year 1990.
5.17 No Change or Undisclosed Liabilities.
(a) Between the date of the Financial Statements and Closing,
there has been no material adverse change in the condition (financial or
otherwise) of Seller, and Seller has incurred no debts, liabilities, or
obligations, whether accrued, absolute, contingent, or otherwise and whether due
or to become due, except in the ordinary course of business.
(b) With the exception of the liabilities set forth on the
Financial Statements and specifically referenced as such on the Schedules
hereto, and the liabilities incurred in the ordinary course of the business of
the Company since the date of the latest of the Financial Statements or set
forth on Schedule 5.16, to the best of the Seller's knowledge, Seller does not
have any liabilities of any nature, whether absolute, accrued, contingent or
otherwise or whether due or to become due.
5.18 Disclosures. No representation or warranty by Seller contained in
this Agreement nor any statement or certificate furnished or to be furnished by
or on behalf of any Seller to Buyer or its representatives in connection
herewith or pursuant hereto contains or will contain any untrue statement of a
material fact, or omits or will omit to state any material fact required to make
the statements contained herein or therein not misleading. The list of Assets
attached hereto as Exhibit 1.1 represent the fixed assets of the Business (other
than the Excluded Assets) and is materially true, correct, and complete, and not
materially misleading.
5.19 Assumed Leases. Seller has satisfied all of its obligations
arising under the Assumed Leases prior to the Effective Date, and less than six
payments remain on that certain Equipment Lease Agreement dated July 14, 1993,
by and between Seller and Trans Leasing International. Furthermore, the total
remaining payments on that certain lease for a Xerox copier, by and between
Palmetto Office Machines, Inc. and Seller, do not exceed Four Hundred and No/100
($400.00) in the aggregate.
5.20 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 of their respective deed of
trust, order, judgment, law, or other contract, agreement or instrument to which
any of them is a party, or by which any 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 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.
<PAGE>
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.
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
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 which 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 non-prevailing party.
8.2 Proration of Taxes and Charges. All personal property taxes 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. Seller shall indemnify and hold Doctor's Care,
UCI of SC, and UCI, 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.
9.2 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 not expressly assumed by UCI of SC
pursuant to Section 3.2 hereunder.
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. Except as set forth in Section 3.2 hereof, 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 pursuant to Section
3.2, if any. All property taxes assessed against the Assets sold hereunder,
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.
<PAGE>
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:
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 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 Non-Compete, Employment Agreement,
or Investment Letter, or any other agreement or instrument ancillary hereto to
which Seller 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. Seller's Cure Period. Notwithstanding anything contained herein to the
contrary, for all potential breaches hereunder other than pursuant to Section 12
above, Seller shall have a grace period of ten (10) days after receiving written
notice from UCI of SC to cure to the satisfaction of UCI of SC any breach of
this Agreement.
14. Miscellaneous.
14.1 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.
14.2 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.
14.3 Survival. All representations, warranties, covenants, and
agreements herein contained shall survive the Closing hereunder.
14.4 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.
14.5 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.
Doctor's Care: Doctor's Care, P.A.
1901 Main Street, Suite 1200
Columbia, SC 29201
Attn.: M.F. McFarland, III, MD
Seller: Allan M. Weldon, M.D.
2508 Canterbury Road
Columbia, South Carolina 29204
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.
14.6 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.
14.7 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.
14.8 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.
14.9 Choice of Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of South Carolina.
14.10 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.
14.11 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.
14.12 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.
14.13 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.
14.14 Assignment. This Agreement is not assignable by any party without the
prior written consent of the other parties hereto.
[SIGNATURE PAGE ATTACHED]
<PAGE>
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 18th day of February, 1998, to be effective as of
March 1, 1998.
UCI OF SC: SELLER:
UCI MEDICAL AFFILIATES OF
SOUTH CAROLINA, INC.
/s/ Allan M. Weldon, M.D.
Allan M. Weldon, M.D.
By: /s/ Jerry F. Wells, Jr.
Jerry F. Wells, Jr.
Its: Chief Financial Officer
DOCTOR'S CARE:
DOCTOR'S CARE, P.A.
By: /s/ Jerry F. Wells, Jr.
Jerry F. Wells, Jr.
Its: Secretary
UCI:
UCI MEDICAL AFFILIATES, INC.
By: /s/ Jerry F. Wells, Jr.
Jerry F. Wells, Jr.
Its: Chief Financial Officer
<PAGE>
LIST OF EXHIBITS
Exhibit 1.2 List of Excluded Assets
Exhibit 2.2 Bill of Sale - Medical Records
Exhibit 3.1.2.2 Note
Exhibit 3.2 Assumed Leases
Exhibit 3.3 Allocation of Purchase Price
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
Exhibit 5.16 Financial Statement
