SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) February 9, 1998
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UCI Medical Affiliates, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-13265 59-2225346
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(Commission File Number) (I.R.S. Employer Identification No.)
1901 Main Street, Suite 1200, Columbia, SC 29201
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(Address of Principal Executive Offices) (Zip Code)
(803) 252-3661
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Pursuant to the terms of an Acquisition Agreement and Plan of
Reorganization dated February 9, 1998 (the "Agreement"), by and among UCI
Medical Affiliates of Georgia, Inc., a South Carolina corporation (the
"Company"); UCI Medical Affiliates, Inc., a Delaware corporation ("UCI");
MainStreet Healthcare Corporation, a Delaware corporation (the "Seller");
MainStreet Healthcare Medical Group, P.C., a Georgia professional corporation
(the "MainStreet Georgia PC"); MainStreet Healthcare Medical Group, PC, a
Tennessee professional corporation (the "MainStreet Tennessee PC"); Prompt Care
Medical Center, Inc., a Georgia corporation; Michael J. Dare; A. Wayne Johnson;
PENMAN Private Equity and Mezzanine Fund, L.P., a Delaware limited partnership;
and Robert G. Riddett, Jr., the Company (a wholly-owned subsidiary of UCI) will
acquire substantially all of the assets of Seller associated with Seller's
business for a purchase price of $8,050,000, plus the assumption of
approximately $685,000 of Seller's line of credit, all as described in the
Agreement. At the election of the Seller, the purchase price will consist of
either: (a) cash payment to the Seller of $900,000 and issuance to the Seller of
shares of UCI common stock having an aggregate value of $7,150,000 (determined
by the formula described below); or (b) cash payment of an aggregate of
$1,250,000 to certain creditors of the Seller identified to the Company by the
Seller and issuance to the Seller of shares of UCI common stock having an
aggregate value of $6,800,000 (determined by the formula described below). Under
the Agreement, the price per share utilized in the formula for determining the
number of shares of UCI common stock to be issued to the Seller is the average
of the closing prices of UCI's common stock for the trading days during the 30
calendar day period immediately prior to the closing, subject to a maximum price
per share of $3.125 and a minimum price per share of $2.375. The consideration
payable by the Company in connection with this acquisition was determined by
arms-length negotiations between the Company and the Seller. The funds used for
the cash portion of the purchase price under the Agreement are expected to be
provided from a cash distribution to the Company from its parent company, UCI,
out of the net proceeds expected to be received by UCI from the sale by UCI of
UCI common stock in a private placement scheduled to close on or about the date
of the closing of the Acquisition. The successful completion of such private
placement is a condition of closing under the Agreement. The closing of the
transactions contemplated by the Agreement is scheduled to occur on or about
March 31, 1998.
Seller provides non-medical management and administrative functions for
nine medical facilities in the State of Georgia and two medical facilities
located in the State of Tennessee. The medical services of the Georgia
facilities are provided by the MainStreet Georgia PC, and the medical services
of the Tennessee facilities are provided by the MainStreet Tennessee PC.
Pursuant to the Agreement, a Georgia professional corporation affiliated with
the Company will be incorporated prior to the date of the closing to purchase
substantially all of the assets (including patient records) of the MainStreet
Georgia PC for a purchase price of one hundred dollars. Similarly, pursuant to
the Agreement, a Tennessee professional corporation affiliated with the Company
will be incorporated prior to the date of the closing to purchase substantially
all of the assets (including patient records) of the MainStreet Tennessee PC for
a purchase price of one hundred dollars.
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Pursuant to the Agreement, the Company will also assume all of the
Seller's equipment and real property leases related to such facilities. The
Company expects to continue the operations at such facilities in substantially
the same manner as they were conducted prior to the acquisition.
All descriptions of the Agreement and the other documents noted herein
are qualified in their entirety by reference to such documents filed as Exhibits
to this Current Report on Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(A) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
The consolidated financial statements for MainStreet
Healthcare Corporation, the business to be acquired by a wholly-owned
subsidiary of UCI Medical Affiliates, Inc., are to be filed under cover
of an amendment to this report on Form 8-K not later than 60 days after
the date that this report on Form 8-K was required to be filed.
(B) PRO FORMA FINANCIAL INFORMATION.
The pro forma financial information for MainStreet Healthcare
Corporation, the business to be acquired by a wholly-owned subsidiary
of UCI Medical Affiliates, Inc., are to be filed under cover of an
amendment to this report on Form 8-K not later than 60 days after the
date that this report on Form 8-K was required to be filed.
(C) EXHIBITS.
Exhibit 2 Acquisition Agreement and Plan of Reorganization
dated February 9, 1998, by and among UCI Medical
Affiliates of Georgia, Inc., a South Carolina
corporation; UCI Medical Affiliates, Inc., a Delaware
corporation; MainStreet Healthcare Corporation, a
Delaware corporation; MainStreet Healthcare Medical
Group, P.C., a Georgia professional corporation;
MainStreet Healthcare Medical Group, PC, a Tennessee
professional corporation; Prompt Care Medical Center,
Inc., a Georgia corporation; Michael J. Dare; A.
Wayne Johnson; PENMAN Private Equity and Mezzanine
Fund, L.P., a Delaware limited partnership; and
Robert G. Riddett, Jr.
Exhibit 99 News release of UCI Medical Affiliates, Inc. dated
February 13, 1998.
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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.
By: /s/ M.F. McFarland III
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M. F. McFarland III
President
Date: February 17, 1998 By: /s/ Jerry F. Wells, Jr., C.P.A.
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Jerry F. Wells, Jr., C.P.A.
Executive Vice President of Finance and
Chief Financial Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
<S> <C> <C>
Exhibit 2 Acquisition Agreement And Plan of Reorganization dated
February 9, 1998, by and among UCI Medical Affiliates of
Georgia, Inc., a South Carolina corporation; UCI Medical
Affiliates, Inc., a Delaware corporation; MainStreet
Healthcare Corporation, a Delaware corporation; MainStreet
Healthcare Medical Group, P.C., a Georgia professional
corporation; MainStreet Healthcare Medical Group, PC, a
Tennessee professional corporation; Prompt Care Medical
Center, Inc., a Georgia corporation; Michael J. Dare; A.
Wayne Johnson; PENMAN Private Equity and Mezzanine
Fund, L.P., a Delaware limited partnership; and Robert G.
Riddett, Jr.
Exhibit 99 News release of UCI Medical Affiliates, Inc. dated February
13, 1998.
</TABLE>
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Exhibit 2
Acquisition Agreement And Plan of Reorganization dated February 9,
1998, by and among UCI Medical Affiliates of Georgia, Inc., a South
Carolina corporation; UCI Medical Affiliates, Inc., a Delaware
corporation; MainStreet Healthcare Corporation, a Delaware corporation;
MainStreet Healthcare Medical Group, P.C., a Georgia professional
corporation; MainStreet Healthcare Medical Group, PC, a Tennessee
professional corporation; Prompt Care Medical Center, Inc., a Georgia
corporation; Michael J. Dare; A. Wayne Johnson; PENMAN Private Equity
and Mezzanine Fund, L.P., a Delaware limited partnership; and Robert G.
Riddett, Jr.
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ACQUISITION AGREEMENT AND PLAN OF REORGANIZATION
This Acquisition Agreement and Plan of Reorganization ("Agreement") is
made as of the 9th day of February, 1998, by, between and among UCI Medical
Affiliates, Inc., a Delaware corporation ("UCI"); UCI Medical Affiliates of
Georgia, Inc., a South Carolina corporation ("UCI of GA"); MainStreet Healthcare
Corporation, a Delaware corporation ("MainStreet"); MainStreet Healthcare
Medical Group, P.C., a Georgia professional corporation ("MHMG-GA"); MainStreet
Healthcare Medical Group, PC, a Tennessee professional corporation ("MHMG-TN");
Prompt Care Medical Center, Inc., a Georgia corporation ("Prompt Care"); Michael
J. Dare ("Dare"); A. Wayne Johnson ("Johnson"); PENMAN Private Equity and
Mezzanine Fund, L.P., a Delaware limited partnership ("PENMAN"); and Robert G.
Riddett, Jr. ("Riddett").
INTRODUCTION.
MainStreet provides non-medical management and administrative functions
for nine medical facilities located in the State of Georgia (the "Georgia
Facilities") and two medical facilities located in the State of Tennessee (the
"Tennessee Facilities"). The medical services of the Georgia Facilities are
provided by MHMG-GA, and the medical services of the Tennessee Facilities are
provided by MHMG-TN. Prompt Care is a wholly-owned subsidiary of MainStreet, and
as of the date hereof has no assets or liabilities. The Class B Shareholders are
the sole holders of the Class B Common Stock, par value $.01 per share, of
MainStreet.
UCI of GA desires to acquire substantially all the assets of MainStreet
in transactions MainStreet intends will qualify as a reorganization under
Section 368(a)(1)(C) of the Internal Revenue Code of 1986, as amended, all upon
the terms and conditions set forth herein. In connection therewith, Doctor's
Care of GA desires to purchase substantially all the assets of MHMG-GA, and
Doctor's Care of TN desires to purchase substantially all the assets of MHMG-
TN, each pursuant to 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. DEFINITIONS. The following terms used in this Agreement shall have the
following meanings ascribed to them:
Acquisition Agreement and
Plan of Reorganization
Page 1
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1.1 "Agreement" shall mean this Acquisition Agreement And Plan of
Reorganization, in its entirety, together with all schedules and exhibits
attached hereto, which are incorporated herein by reference.
1.2 "Assets" shall mean collectively all the MainStreet Assets, MHMG-GA
Assets, and MHMG-TN Assets which are to be transferred to the Transferees
hereunder, excepting only the Excluded Assets.
1.3 "Assumed MainStreet Liabilities" shall have the meaning set forth
in Section 7.1.3 below.
1.4 "Business" shall mean collectively the MainStreet Business, MHMG-GA
Business, and MHMG-TN Business.
1.5 "Certified List of MainStreet Security Holders" shall have the
meaning set forth in Section 8.3.23 below.
1.6 "Class B Shareholders" shall mean collectively Dare, Johnson,
PENMAN, and Riddett, and "Class B Shareholder" shall mean one of them.
1.7 "Closing" shall have the meaning set forth in Section 8.1 below.
1.8 "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.9 "Dare" shall mean Michael J. Dare.
1.10 "Doctor's Care of GA" shall mean Doctor's Care of Georgia, P.C., a
Georgia professional corporation to be formed prior to Closing.
1.11 "Doctor's Care of TN" shall mean Doctor's Care of Tennessee, P.C.,
a Tennessee professional corporation to be formed prior to Closing.
1.12 "ERISA" shall mean the Employment Retirement Income Security Act
of 1974, as amended.
1.13 "Employee Benefit Plan" shall mean any fringe or benefit plans,
including without limitation, any retirement, pension, profit sharing,
thrift-savings, non-qualified deferred compensation, incentive compensation,
stock bonus, stock option (qualified or non-qualified), cash bonus, employee
stock ownership (including, without limitation, payroll related employee stock
ownership), insurance, medical, welfare or vacation plans of any kind and any
"employee benefit plan" (as defined in Section 3(3) of Title I of ERISA or any
voluntary employees' beneficiary association (as defined in Section 501(c)(9) of
the Code) or combination of the foregoing.
Acquisition Agreement and
Plan of Reorganization
Page 2
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1.14 "Encumbrances" means any and all restrictions on transfer, liens,
encumbrances, charges, pledges, security interests, taxes, claims, options,
warrants, purchase rights, contracts, commitments, equities, claims and demands.
1.15 "Excluded Assets" shall mean collectively the MainStreet Excluded
Assets, MHMG-GA Excluded Assets, MHMG-TN Excluded Assets, and such Excluded
Assets described in Section 6 below.
1.16 "Facilities" shall mean collectively the Headquarters, Georgia
Facilities, and Tennessee Facilities.
1.17 "Financial Statements" shall have the meaning set forth in Section
9.10.
1.18 "GAAP" shall have the meaning set forth in Section 9.10.
1.19 "Georgia Facilities" shall have the meaning set forth in the
introduction hereinabove, and as more fully described in Exhibit 1.19 attached
hereto.
1.20 "Headquarters" shall mean the premises located at 2370 Main
Street, Tucker, Georgia, at which the Business is headquartered.
1.21 "Indemnity Damages" shall mean all losses, damages, liabilities,
claims, suits, demands, penalties, assessments, obligations, causes of action,
or costs (including reasonable litigation expenses and legal fees) with respect
to which an indemnification right applies hereunder.
1.22 "Investment Letter" shall have the meaning set forth in Section
8.3.8.
1.23 "Johnson" shall mean A. Wayne Johnson.
1.24 "Knowledge" shall mean actual knowledge, and the Knowledge of
MainStreet shall mean the actual knowledge of the officers, directors, and/or
Class B Shareholders of MainStreet, or any one of them.
1.25 "MainStreet" shall mean MainStreet Healthcare Corporation, a
Delaware corporation.
1.26 "MainStreet Assets" shall mean collectively all the assets of
MainStreet, which are to be transferred to UCI of GA hereunder, as more fully
described in Section 2.1, excepting only the MainStreet Excluded Assets.
Acquisition Agreement and
Plan of Reorganization
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1.27 "MainStreet Business" shall mean MainStreet's medical management
business and related business operations headquartered at the Headquarters, and
primarily conducted by the Transferors at the Facilities.
1.28 "MainStreet Equipment Leases" shall have the meaning set forth in
Section 7.1.3 below.
1.29 "MainStreet Excluded Assets" shall mean the assets and rights
described in Section 2.2 to be retained by MainStreet.
1.30 "MainStreet Real Estate Leases" shall have the meaning set forth
in Section 7.1.3 below.
1.31 "MHMG-GA" shall mean MainStreet Healthcare Medical Group, P.C., a
Georgia professional corporation.
1.32 "MHMG-GA Assets" shall mean collectively all the assets of
MHMG-GA, which are to be transferred to Doctor's Care of GA hereunder, as more
fully described in Section 3.1, excepting only the MHMG-GA Excluded Assets.
1.33 "MHMG-GA Business" shall mean MHMG-GA's medical business and
related business operations headquartered at the Headquarters, and primarily
conducted by MHMG-GA at the Georgia Facilities.
1.34 "MHMG-GA Excluded Assets" shall mean the assets and rights
described in Section 3.2 to be retained by MHMG-GA.
1.35 "MHMG-TN" shall mean MainStreet Healthcare Medical Group, PC, a
Tennessee professional corporation.
1.36 "MHMG-TN Assets" shall mean collectively all the assets of
MHMG-TN, which are to be transferred to Doctor's Care of TN hereunder, as more
fully described in Section 4.1, excepting only the MHMG-TN Excluded Assets.
1.37 "MHMG-TN Business" shall mean MHMG-TN's medical business and
related business operations headquartered at the Headquarters, and primarily
conducted by MHMG-TN at the Tennessee Facilities.
1.38 "MHMG-TN Excluded Assets" shall mean the assets and rights
described in Section 4.2 to be retained by MHMG-TN.
Acquisition Agreement and
Plan of Reorganization
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1.39 "Non-Solicits" shall mean the non-solicit covenants to be entered
between UCI of GA and each of the Class B Shareholders pursuant to this
Agreement, substantially in the form attached hereto as Exhibit 8.3.7.
1.40 "Parties" shall mean collectively the UCI of GA, UCI, the
Transferors, and the Class B Shareholders, and "Party" shall mean one of them.
1.41 "PENMAN" shall mean PENMAN Private Equity and Mezzanine Fund,
L.P., a Delaware limited partnership.
1.42 "Person" means any individual, corporation, partnership, limited
partnership, limited liability company, trust, entity or unincorporated
organization, or a government or any agency or political subdivision thereof.
1.43 "Private Placement" shall have the meaning set forth in Section
8.6.3 below.
1.44 "Prompt Care" shall mean Prompt Care Medical Center, Inc., a
Tennessee corporation.
1.45 "Purchase Price" shall mean the total price for the MainStreet
Assets as described in Section 7.1.
1.46 "Riddett" shall mean Robert G. Riddett, Jr.
1.47 "Schedule of Exceptions" shall have the meaning set forth in
Section 9 below.
1.48 "Subsidiary" means any corporation with respect to which a
specified Person (or Subsidiary thereof) owns any capital stock or has the power
to vote or direct the voting of sufficient securities to elect one or more
directors.
1.49 "Tennessee Facilities" shall have the meaning set forth in the
introduction hereinabove, and as more fully described in Exhibit 1.49 attached
hereto.
1.50 "Transferees" shall mean UCI of GA, Doctor's Care of GA, and
Doctor's Care of TN.
1.51 "Transferors" shall mean collectively MainStreet, MHMG-GA,
MHMG-TN, and Prompt Care.
1.52 "UCI" shall mean UCI Medical Affiliates, Inc., a Delaware
corporation.
Acquisition Agreement and
Plan of Reorganization
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1.53 "UCI of GA" shall mean UCI Medical Affiliates of Georgia, Inc., a
South Carolina corporation.
1.54 "Universal" shall mean Universal Diagnostics, Inc., a Georgia
corporation.
2. SALE OF MAINSTREET ASSETS TO UCI OF GA.
2.1 Transfer of MainStreet Assets. At the Closing, for the
consideration herein provided, MainStreet shall convey, transfer, assign and
deliver, or cause to be conveyed, transferred, assigned, and delivered, to UCI
of GA, and UCI of GA shall purchase and accept from MainStreet, all of
MainStreet's right, title, and interest (as the case may be) in and to the
following assets (collectively "MainStreet Assets"):
2.1.1 All accounts receivable, machinery, equipment, computer
and telephone systems (including hardware and software), inventory, furniture,
furnishings, supplies, office equipment, and related tangible personal property
respecting the MainStreet Business conducted in the Facilities, including
(without limitation) the items described in Exhibit 2.1.1 attached hereto,
excluding only the MainStreet Excluded Assets.
2.1.2 All of the contract rights, leasehold interests,
goodwill, permits, licenses, computer hardware and software and related
intangible personal property of the MainStreet Business, excluding only the
MainStreet Excluded Assets. MainStreet shall be responsible for obtaining the
necessary consents, if any, to assignment of such intangible assets.
2.1.3 All of the inventory of the MainStreet Business,
wherever located, excluding only the MainStreet Excluded Assets.
2.1.4 Leases and contracts to be assumed by UCI of GA (which
are acceptable to UCI of GA in its sole discretion) at Closing, including
(without limitation) the MainStreet Equipment Leases and MainStreet Real Estate
Leases described in Section 7.1.3 herein. The parties hereto acknowledge and
agree that, except as expressly assumed hereunder, UCI of GA shall not assume
any contracts, equipment leases, personal property leases, real property leases,
or any other liabilities of any Transferor and/or shareholder of the
Transferors. MainStreet shall be responsible for obtaining the necessary
consents, if any, to the assignment of such leases, if any.
2.1.5 All repair and service contracts and warranties (which
are acceptable to UCI of GA in its sole discretion) used or useful in the
MainStreet Business, excluding only the MainStreet Excluded Assets.
Acquisition Agreement and
Plan of Reorganization
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2.1.6 All processes, patents, trademarks, trade names
(including without limitation "Prompt Care", "MainStreet Healthcare" and
"MainStreet Healthcare Corporation"), service marks and trade secrets, used or
useful in the Business.
2.1.7 All hold-back accounts associated with MainStreet's
credit obligations with Bank One, L.P. (formerly NPL-LP, Inc.).
2.1.8 All medical records and files associated with the
Business, to the extent such medical records or files are owned by MainStreet.
2.1.9 Every other asset (whether tangible, intangible,
personal, real, or mixed property, or interests therein) of MainStreet used or
useful in the ordinary course of the Business, including (without limitation)
promotional materials, licenses and permits, operations or other manuals,
recipes, menus, forms, prepaid expenses, deposits, warranties and contract
rights or commitments, excluding only the MainStreet Excluded Assets.
2.2 MainStreet Excluded Assets. Subject to Section 6 below, anything
contained in this Agreement to the contrary notwithstanding, the parties hereto
acknowledge and agree that MainStreet will not sell, assign, or convey to UCI of
GA, and UCI of GA will not acquire, any right, title, or interest whatsoever in
or to any of the assets or property of MainStreet listed in Exhibit 2.2 attached
hereto (collectively "MainStreet Excluded Assets"). MainStreet will make all
reasonable efforts to complete removal of the MainStreet Excluded Assets located
at the Facilities, if any, as of the date of Closing. Neither UCI of GA,
Doctor's Care of GA, nor Doctor's Care of TN shall be an insurer of the safety
or condition of the MainStreet Excluded Assets after Closing; and MainStreet
shall retain the risk of loss with respect to any MainStreet Excluded Assets
after Closing.
2.3 Assets Owned By Prompt Care or Universal. In the event any of the
Assets are owned in whole or part by Prompt Care and/or Universal which would
otherwise be Assets, Prompt Care and Universal will at Closing convey, transfer,
assign and deliver such Assets to UCI of GA.
2.4 Method of Transfer. The transfer and sale of the MainStreet Assets
will be evidenced by appropriate Bills of Sale, assignments and other
instruments executed and delivered by MainStreet to UCI of GA at Closing, as set
forth in this Agreement. UCI of GA shall take, and MainStreet shall deliver,
possession of the MainStreet Assets at completion of Closing.
3. SALE OF MHMG-GA ASSETS TO DOCTOR'S CARE OF GA.
3.1 Transfer of MHMG-GA's Assets. At Closing, for One Hundred and
No/100 ($100.00) Dollars and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, and no other monetary
consideration, MHMG-GA shall transfer and
Acquisition Agreement and
Plan of Reorganization
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deliver to Doctor's Care of GA all of MHMG-GA's right, title and interest in and
to all the assets of MHMG-GA, including without limitation all medical records
and files in MHMG-GA's possession that were made in treating patients of MHMG-GA
or its predecessors, all records transferred to MHMG-GA concerning prior
treatment of any patient, and all employment and non-compete agreements to which
MHMG-GA is a party (the "MHMG-GA Assets"), excluding only the MHMG-GA Excluded
Assets, if any.
3.2 MHMG-GA Excluded Assets. Subject to Section 6 below, anything
contained in this Agreement to the contrary notwithstanding, the parties hereto
acknowledge and agree that MHMG-GA will not sell, assign, or convey to Doctor's
Care of GA, and Doctor's Care of GA will not acquire, any right, title, or
interest whatsoever in or to any of the assets or property of MHMG-GA listed in
Exhibit 3.2 attached hereto (collectively "MHMG-GA Excluded Assets"). MHMG-GA
will make all reasonable efforts to complete removal of the MHMG-GA Excluded
Assets located at the Facilities, if any, as of the date of Closing. Neither UCI
of GA, Doctor's Care of GA, nor Doctor's Care of TN shall be an insurer of the
safety or condition of the MHMG-GA Excluded Assets after Closing; and MHMG-GA
shall retain the risk of loss with respect to any MHMG-GA Excluded Assets after
Closing.
3.3 Method of Transfer. The transfer of the MHMG-GA Assets will be
evidenced by an appropriate bill of sale substantially in the form attached
hereto as Exhibit 8.3, executed and delivered by MHMG-GA to Doctor's Care of GA
at the Closing, as set forth in this Agreement. Doctor's Care of GA shall take,
and MHMG-GA shall deliver, possession of the MHMG-GA Assets at completion of
Closing. MHMG-GA at its sole expenses shall comply with any applicable law,
regulation, rule, or ordinance related to the transfer of medical records
hereunder, including but not limited to the publication of any required public
notice.
4. SALE OF MHMG-TN ASSETS TO DOCTOR'S CARE OF TN.
4.1 Transfer of MHMG-TN's Assets. At Closing, for One Hundred and
No/100 ($100.00) Dollars and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, and no other monetary
consideration, MHMG-TN shall transfer and deliver to Doctor's Care of TN all of
MHMG-TN's right, title and interest in and to all the assets of MHMG-TN,
including without limitation all medical records in MHMG-TN's possession that
were made in treating patients of MHMG-TN or its predecessors, all records
transferred to MHMG-TN concerning prior treatment of any patient, and all
employment and non-compete agreements to which MHMG-TN is a party (the "MHMG-TN
Assets"), excluding only the MHMG-TN Excluded Assets, if any.
4.2 MHMG-TN Excluded Assets. Subject to Section 6 below, anything
contained in this Agreement to the contrary notwithstanding, the parties hereto
acknowledge and agree that MHMG-TN will not sell, assign, or convey to Doctor's
Care of TN, and Doctor's Care of TN will not acquire, any right, title, or
interest whatsoever in or to any of the assets or property of
Acquisition Agreement and
Plan of Reorganization
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MHMG-TN listed in Exhibit 4.2 attached hereto (collectively "MHMG-TN Excluded
Assets"). MHMG-TN will make all reasonable efforts to complete removal of the
MHMG-TN Excluded Assets located at the Facilities, if any, as of the date of
Closing. Neither UCI of GA, Doctor's Care of GA, nor Doctor's Care of TN shall
be an insurer of the safety or condition of the MHMG-TN Excluded Assets after
Closing; and MHMG-TN shall retain the risk of loss with respect to any MHMG-TN
Excluded Assets after Closing.
4.3 Method of Transfer. The transfer of the MHMG-TN Assets will be
evidenced by an appropriate bill of sale substantially in the form attached
hereto as Exhibit 8.4, executed and delivered by MHMG-TN to Doctor's Care of TN
at the Closing, as set forth in this Agreement. Doctor's Care of TN shall take,
and MHMG-TN shall deliver, possession of the MHMG-TN Assets at completion of
Closing. MHMG-TN at its sole expenses shall comply with any applicable law,
regulation, rule, or ordinance related to the transfer of medical records
hereunder, including but not limited to the publication of any required public
notice.
5. NOT A SALE OF BUSINESS. This transaction constitutes the sale of assets by
each Transferor 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 the Transferees purchase and acquire and each Transferor sell
and transfer the complete operating process of the Business and all properties
and interest necessary to operate the MainStreet Business, MHMG-GA Business, and
MHMG-TN Business, respectively, substantially as each is presently being
operated, excepting only the MainStreet Excluded Assets, MHMG-GA Excluded
Assets, and MHMG-TN Excluded Assets.
6. ADDITIONAL EXCLUDED ASSETS. Notwithstanding anything contained herein, the
following assets shall be retained by Transferors as Excluded Assets and shall
not be included in the Assets sold, transferred, assigned, conveyed, and
delivered to Transferees hereunder:
6.1 Employee Benefit Plan Assets. The rights of any Transferor under,
and any funds and property held in trust or any other funding vehicle pursuant
to, any Employee Benefit Plan and any contracts, agreements or other documents
relating to Employee Benefit Plans to the extent that no liabilities relating to
or arising from such Employee Benefit Plans assets appear in the Financial
Statements; and
6.2 Certain Corporate Records. The corporate minute books and records,
stock ledger, corporate seal, and income tax records and returns of each
Transferor, and any worksheets, notes, files or documents primarily related
thereto, wherever located.
7. CONSIDERATION FOR MAINSTREET ACQUISITION.
7.1 MainStreet Consideration. Subject to Section 7.3 below, the
aggregate purchase price (the "Purchase Price") for the MainStreet Assets will
be Eight Million Fifty Thousand and
Acquisition Agreement and
Plan of Reorganization
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No/100 ($8,050,000) Dollars, plus the assumption of certain liabilities of
MainStreet as described in Section 7.2 below. Such purchase price shall be
payable in accordance with either of the following options which shall be
selected by MainStreet and disclosed to UCI to GA in writing no later than the
close of business on March 23, 1998:
7.1.1 Purchase Price Option A. At Closing, UCI of GA will
tender to MainStreet a cash payment of Nine Hundred Thousand and No/100
($900,000) Dollars, and the balance of the purchase price will be paid
in shares of the voting common stock of UCI, $0.05 par value per share
(the "Shares"); or
7.1.2 Purchase Price Option B. At Closing, UCI will tender to
MainStreet such number of Shares having an aggregate value of Six
Million Eight Hundred Thousand and No/100 ($6,800,000.00) Dollars, as
adjusted pursuant to Section 7.3 below as necessary. In addition, UCI
of GA will pay, within ten (10) days after Closing, an aggregate of One
Million Two Hundred Fifty Thousand and No/100 ($1,250,000.00) Dollars
directly to certain creditors of MainStreet as directed to UCI of GA by
MainStreet in writing no later than the date of Closing.
The Shares when issued, will be duly authorized, validly issued, fully
paid and non-assessable. For purposes hereof, the price per share of the Shares
utilized for determining the number of Shares to be issued to MainStreet will be
the average of the closing prices of the $0.05 par value voting common stock of
UCI as conclusively determined by The Nasdaq Stock Market, Inc. for the trading
days during the thirty calendar day period immediately prior to Closing;
provided however, the price per share utilized for such determination shall not
be less than $2.375, nor more than $3.125 per share; provided however,
appropriate adjustments in the price per share utilized shall be made in order
to give effect to changes in the number of outstanding shares as a result of
stock dividends, stock splits, reverse stock splits, consolidations,
recapitalization or other relevant change. The parties hereto acknowledge that
the Shares shall be issued to MainStreet pursuant to an exemption from
registration under the securities laws, such as Rule 506 of SEC Regulation D,
and the Shares shall be restricted shares subject to Rule 144 of the Securities
Act of 1933. The certificates evidencing the Shares shall bear a restrictive
legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, PLEDGED,
TRANSFERRED, ASSIGNED 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 TRANSFER SUCH
Acquisition Agreement and
Plan of Reorganization
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SECURITIES ONLY 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 OR
THAT SUCH REGISTRATION IS NOT REQUIRED AND THAT SUCH TRANSFER
WILL NOT VIOLATE ANY APPLICABLE STATE SECURITIES LAWS.
7.2 Assumption of Certain MainStreet Liabilities.
7.2.1 The Transferees will not assume each of the Transferor's
obligations and liabilities, including (without limitation) the current and
long-term liabilities, contingent liabilities, medical malpractice claims,
environmental claims, workers' compensation claims, and sales, income and
payroll taxes. Notwithstanding the foregoing, as of the date of Closing, UCI of
GA shall assume the following liabilities of MainStreet (the "Assumed MainStreet
Liabilities"): (a) UCI of GA will assume MainStreet's existing operating and
capital equipment leases (the "MainStreet Equipment Leases"), more fully
described on Exhibit 7.2.1(a) attached hereto, provided the aggregate
outstanding balances of such MainStreet Equipment Leases as of the date of
Closing do not exceed the amount shown on Exhibit 7.2.1(a) attached hereto; (b)
UCI of GA will elect at UCI of GA's option to either assume MainStreet's
existing real property leases for the Georgia Facilities and Tennessee
Facilities (the "MainStreet Real Estate Leases") more fully described on Exhibit
7.2.1(b) attached hereto or enter into new leases with similar terms; and (c)
UCI of GA will assume MainStreet's line of credit obligation with Bank One, N.A.
(formerly NPL-LP, Inc.) provided the outstanding balance (less applicable
lending hold-back amounts) of such obligation as of the date of Closing does not
exceed Six Hundred Eighty-Five Thousand ($685,000) Dollars and the terms remain
unchanged (unless otherwise requested or agreed by UCI of GA in writing).
7.2.2 Unless MainStreet selects Purchase Price Option B as set
forth in Section 7.1.2 above, the Parties hereby acknowledge and agree that UCI
of GA shall not assume or agree to pay, perform, or discharge any liability or
obligation of MainStreet which is not expressly set forth above. As of the date
of Closing, MainStreet shall be current with respect to all payments then due
and owing pursuant to the Assumed MainStreet Liabilities, and none of the
Assumed MainStreet Liabilities shall otherwise be in default or subject to
acceleration.
7.2.3 MainStreet shall be responsible for obtaining the
consent, if any, to the assumption of any such Assumed MainStreet Liabilities by
UCI of GA. UCI of GA agrees to cooperate with MainStreet in MainStreet's efforts
to obtain such consents and the written release of MainStreet for the Assumed
MainStreet Liabilities; provided however, UCI of GA shall not be required to
pre-pay or refinance any of the Assumed MainStreet Liabilities or incur any
additional liability or pay any additional amount in connection with any such
consents or releases.
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Plan of Reorganization
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7.3 Adjustment For Certain Assumed MainStreet Liabilities.
7.3.1 In the event MainStreet selects Purchase Price Option A
as described in Section 7.1.1 above and the aggregate outstanding balance of the
MainStreet Equipment Leases as of the date of Closing exceed the amounts shown
on Exhibit 7.2.1(a) attached hereto, and/or the outstanding balance (less
applicable lending hold-back amounts) of MainStreet's line of credit obligation
with Bank One, N.A. (formerly NPL-LP. Inc.) as of the date of Closing exceeds
Six Hundred Eight-Five Thousand ($685,000) Dollars, the Purchase Price tendered
by UCI of GA at Closing as set forth in Section 7.1.1 above, shall be reduced by
the aggregate amount such liabilities exceed such limits. In the event of any
such adjustment, such Purchase Price set forth in Section 7.1.1 shall be
adjusted and applied in the following order to the extent necessary: (i) first
to reduce the cash amount payable to MainStreet, and (ii) second to reduce the
number of Shares to be delivered by UCI to MainStreet.
7.3.2 In the event MainStreet selects Purchase Price Option B
as described in Section 7.1.2 above and the aggregate outstanding balance of the
MainStreet Equipment Leases as of the date of Closing exceed the amounts shown
on Exhibit 7.2.1(a) attached hereto, and/or the outstanding balance (less
applicable lending hold-back amounts) of MainStreet's line of credit obligation
with Bank One, N.A. (formerly NPL-LP. Inc.) as of the date of Closing exceeds
Six Hundred Eight-Five Thousand ($685,000) Dollars, such adjustment shall be
applied in the following order to the extent necessary: (i) first to reduce the
cash tendered by UCI of GA to the designated creditors of MainStreet as set
forth in Section 7.1.2 above, and (ii) second to reduce the number of Shares to
be delivered by UCI to MainStreet.
7.3.3 In the event the aggregate outstanding balance of the
MainStreet Equipment Leases as of the date of Closing in less than the amounts
shown on Exhibit 7.2.1(a) attached hereto, and/or the outstanding balance (less
applicable lending hold-back amounts) of MainStreet's line of credit obligation
with Bank One, N.A. (formerly NPL-LP. Inc.) as of the date of closing is less
than Six Hundred Eighty-Five Thousand ($685,000) Dollars, the purchase price and
the stock tendered by UCI and UCI of GA at Closing each as set forth in Section
7.1.1 and 7.1.2 above, shall be increased by the aggregate amount such
liabilities is less than such limits.
7.4 Limitation On Amount Of Assumed MainStreet Liabilities.
Notwithstanding the foregoing, in no event shall the sum of the cash portion of
the Purchase Price paid by the Transferees hereunder and the total amount of the
Assumed MainStreet Liabilities assumed by UCI of GA exceed twenty (20%) percent
of the Purchase Price.
7.5 Allocation of Purchase Price. The purchase price for the MainStreet
Assets shall be allocated among the MainStreet Assets as set forth in a letter
to be provided by UCI of GA to MainStreet within thirty (30) days of the
Closing; provided however, the amount allocated to the fixed assets of the
Transferors shall be determined by an appraisal firm selected by UCI of GA in
its sole discretion. The cost and expenses of such appraisal shall be paid by
UCI of GA. The
Acquisition Agreement and
Plan of Reorganization
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Parties shall use the foregoing allocation for reporting the purchase and sale
of the Assets for federal, state, and local tax purposes and for completing the
requisite filings with the Internal Revenue Service.
8. CLOSING.
8.1 Date of Closing. The closing of the sale and purchase of the Assets
and related transactions to be effective as of 11:59 p.m. on the date of
Closing, and subject to the terms and conditions of this Agreement, shall take
place on March 31, 1998, commencing at 10:00 a.m. (local time), at the offices
of Nexsen Pruet Jacobs & Pollard, LLP, 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 (the "Closing"). In the event Closing set forth in this
Section 8 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.
8.2 Transactions at Closing. At the Closing, and subject to the terms
and conditions of this Agreement:
8.2.1 UCI of GA shall pay to MainStreet the consideration then
owing to it pursuant to, and in accordance with, Section 7.1 above.
8.2.2 Doctor's Care of GA shall pay to MHMG-GA the
consideration then owing to it pursuant to, and in accordance with, Section 3.1
above.
8.2.3 Doctor's Care of TN shall pay to MHMG-TN the
consideration then owing to it pursuant to, and in accordance with, Section 4.1
above.
8.2.4 Each of the Transferors and the Class B Shareholders, as
applicable, shall execute and deliver to UCI, UCI of GA, Doctor's Care of GA, or
Doctor's Care of TN, 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 8.3 below.
8.2.5 UCI of GA, Doctor's Care of GA, and Doctor's Care of TN
shall execute and deliver to each of the Transferors and the Class B
Shareholders, as applicable, the documents, agreements and instruments in form
and substance required by this Agreement, as described in Section 8.4..
8.2.6 All employees of each of the Transferors directly and
primarily associated with the Business will cease to be employees of the
Transferors, and the Transferees, or any one of them, may, subject to the
exercise of the Transferees' sole discretion, offer immediately or thereafter to
hire any or all of such persons. The Transferees, or any one of them, shall no
less than fourteen (14) days prior to the date of Closing, notify Mainstreet of
the Transferor's
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Plan of Reorganization
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employees who the Transferees, or any one of them, shall offer employment as of
Closing. The Transferees shall be required to hire only those employees of the
Transferors which the Transferees, or any one of them, elects in its sole
discretion to hire, and the Transferees shall not assume any liability
whatsoever to any employee of any of the Transferors not hired by any of the
Transferees. Each of the Transferors jointly and severally 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 date of Closing.
8.2.7 The parties hereto will take such other actions
contemplated at Closing by this Agreement.
8.3 Transferors' and Class B Shareholders' Documents. At Closing, each
of the Transferors and each of the Class B Shareholders, as applicable, shall
deliver, or cause to be delivered, at Transferors' expense, the following duly
executed, lawful and effective documents and instruments:
8.3.1 A bill of sale for tangible personal property and
fixtures composing portions of the MainStreet Assets substantially in the form
attached hereto as Exhibit 8.3.1 to UCI of GA.
8.3.2 An assignment of intangible personal property composing
portions of the MainStreet Assets substantially in the form attached hereto as
Exhibit 8.3.2 to UCI of GA.
8.3.3 A bill of sale for tangible personal property and
fixtures composing portions of the MHMG-GA Assets substantially in the form
attached hereto as Exhibit 8.3.3 to Doctor's Care of GA.
8.3.4 An assignment of intangible personal property composing
portions of the MHMG-GA Assets substantially in the form attached hereto as
Exhibit 8.3.4 to Doctor's Care of GA.
8.3.5 A bill of sale for tangible personal property and
fixtures composing portions of the MHMG-TN Assets substantially in the form
attached hereto as Exhibit 8.3.5 to Doctor's Care of TN.
8.3.6 An assignment of intangible personal property composing
portions of the MHMG-TN Assets substantially in the form attached hereto as
Exhibit 8.3.6 to Doctor's Care of TN.
8.3.7 Each of the Class B Shareholders shall each execute and
deliver to UCI of GA a non-solicit covenant substantially in the form of Exhibit
8.3.7 attached hereto (the "Non- Solicits").
Acquisition Agreement and
Plan of Reorganization
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8.3.8 MainStreet and each of the security holders of
MainStreet (including without limitation the Class B Shareholders) shall execute
and deliver to UCI an Investment Letter substantially in the form attached
hereto as Exhibit 8.3.8 (the "Investment Letter").
8.3.9 MainStreet will deliver to UCI of GA copies of such duly
filed UCC termination statements, mortgages or lien satisfactions and other
documents, as are reasonably required by UCI of GA to evidence UCI of GA's
clear, marketable and insurable title to the MainStreet Assets; provided
however, the Parties acknowledge that Bank One, L.P. shall retain a lien on
MainStreet's accounts receivable as collateral for MainStreet's line of credit
obligation being assumed by UCI of GA as set forth in Section 7.1.3 above.
8.3.10 MHMG-GA will deliver to Doctor's Care of GA copies of
such duly filed UCC termination statements, mortgages or lien satisfactions and
other documents, as are reasonably required by Doctor's Care of GA to evidence
Doctor's Care of GA's clear, marketable and insurable title to the MHMG-GA
Assets.
8.3.11 MHMG-TN will deliver to Doctor's Care of TN copies of
such duly filed UCC termination statements, mortgages or lien satisfactions and
other documents, as are reasonably required by Doctor's Care of TN to evidence
Doctor's Care of TN's clear, marketable and insurable title to the MHMG-TN
Assets.
8.3.12 Each Transferor will deliver to UCI of GA such duly
executed termination statements, or upon UCI of GA's request lease assignments,
of the MainStreet Real Estate Leases and other documents, as are reasonably
required by UCI of GA to evidence UCI of GA's clear, marketable and insurable
leasehold interest in each of the Georgia Facilities and Tennessee Facilities.
8.3.13 Each Transferor shall deliver to UCI of GA such duly
executed consents, if the assignment of the MainStreet Equipment Leases, to UCI
of GA.
8.3.14 Copy of the patient list of each Transferor as of the
date of Closing.
8.3.15 MHMG-GA's Articles of Amendment, in a form satisfactory
to UCI of GA, changing the name of MHMG-GA to a name other than "MainStreet
Healthcare Medical Group, P.C.", thus making such name available to UCI of GA.
8.3.16 MHMG-TN's Articles of Amendment, in a form satisfactory
to UCI of GA, changing the name of MHMG-TN to a name other than "MainStreet
Healthcare Medical Group, PC", thus making such name available to UCI of GA.
8.3.17 Each Transferor shall deliver to UCI of GA at Closing
evidence of insurance as set forth in Section 9.19.3 herein.
Acquisition Agreement and
Plan of Reorganization
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8.3.18 MainStreet shall execute and deliver to UCI of GA an
Affidavit and Certificate of Assumed Liabilities substantially in the form
attached hereto as Exhibit 8.3.18.
8.3.19 Officers' Certificate of each of the Transferors
substantially in the form attached hereto as Exhibit 8.3.19.
8.3.20 Legal Opinion of Transferors' and Class B Shareholders'
counsel dated the date of Closing, substantially in the form attached hereto as
Exhibit 8.3.20.
8.3.21 MainStreet shall cause the owner as of Closing of
MainStreet's facility located at 2362 Main Street, Tucker, Georgia to execute
and deliver to UCI of GA a lease of MainStreet's facility located at 2362 Main
Street, Tucker, Georgia, substantially in the form attached hereto as Exhibit
8.3.21. As of the date hereof, MainStreet is the owner of such facility. On or
before the Closing, MainStreet shall not convey such facility to any person or
entity other than a Class B Shareholder without the prior written consent of UCI
which shall not be unreasonably withheld.
8.3.22 Certificate of Existence or Good Standing of each of
the Transferors issued by the Secretary of State of its state of formation and
dated within twenty days prior to Closing.
8.3.23 MainStreet shall execute and deliver to UCI of GA a
true and complete list of the holders of MainStreet's securities as of the date
of Closing, substantially in the form attached hereto as Exhibit 8.3.23 (the
"Certified List of MainStreet Security Holders").
8.3.24 A report of each Transferor's accounts receivable (with
aging data) and unbilled cost of fee by patient or customer as of the date of
Closing, and a schedule of advance payments (advances) by patient or customer as
of the date of Closing.
8.4 Documents of UCI, UCI of GA, Doctor's Care of GA, or Doctor's Care
of TN. At Closing, UCI and/or UCI of GA, at their expense, shall deliver or
cause to be delivered to the Transferors or the Class B Shareholders (as the
case may be) the following duly executed, lawful, and effective documents and
instruments:
8.4.1 UCI will deliver a copy of the instructions to the
transfer agent of UCI's common stock instructing the transfer agent to issue
certificate(s) evidencing the Shares to MainStreet.
8.4.2 UCI will deliver to MainStreet the registration rights
agreement substantially in the form attached hereto as Exhibit 8.4.2.
8.4.3 Officers' Certificate of each of the Transferees
substantially in the form attached hereto as Exhibit 8.4.3.
Acquisition Agreement and
Plan of Reorganization
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8.4.4 Legal Opinion of Transferees' counsel dated the date of
Closing, substantially in the form attached hereto as Exhibit 8.4.4.
8.4.5 UCI of GA shall execute and deliver to MainStreet a
lease of MainStreet's facility located at 2362 Main Street, Tucker, Georgia,
substantially in the form attached hereto as Exhibit 8.3.21, and shall pay such
initial rental thereunder.
8.4.6 Certificate of Existence or Good Standing of UCI and
each of the Transferees issued by the Secretary of State of its state of
formation and dated within twenty days prior to Closing.
8.5 Conditions of Title.
8.5.1 Assets. At Closing, the Assets shall be conveyed by
appropriate instruments of conveyance free and clear of all claims, security
interests, liens and Encumbrances except (a) personal property and ad valorem
taxes for the year of Closing (which shall be prorated as provided in this
Agreement), and (b) Bank One, L.P. shall retain a lien on MainStreet's accounts
receivable as collateral for MainStreet's line of credit obligation being
assumed by UCI of GA as set forth in Section 7.1.3 above.
8.5.2 Leasehold. At Closing, UCI of GA shall hold a leasehold
interest in each of the Georgia Facilities and Tennessee Facilities free and
clear of all claims, security interests, liens and Encumbrances except real
property taxes for the year of Closing which are not yet due and payable.
8.6 Covenants Prior to Closing.
8.6.1 Access to Information. Subject to any restrictions of
applicable law or third party confidentiality agreements, upon reasonable
notice, each Party shall, and shall cause its Subsidiaries to, afford to the
officers, directors, employees, accountants, counsel, investment bankers,
financial advisors, financing sources and other representatives of the other
Parties hereto (collectively, "Representatives") reasonable access, during
normal business hours throughout the period prior to the date of Closing, to all
of its properties, books, contracts, commitments and records and, during such
period, each party shall and shall cause its Subsidiaries to, furnish promptly
to the other (i) access to each report, schedule and other document filed or
received by it or any of its Subsidiaries pursuant to the requirements of
federal or state securities laws or filed with or sent to the SEC or any other
federal or state regulatory agency or commission and (ii) access to all
information concerning themselves, their Subsidiaries, directors, officers and
shareholders and such other matters as may be reasonably requested by the other
party in connection with any filings, applications or approvals required or
contemplated by this Agreement.
Acquisition Agreement and
Plan of Reorganization
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8.6.2 Reasonable Best Efforts. Subject to the terms and
conditions herein provided and to applicable legal requirements, each of the
Parties agrees to use its reasonable best efforts to take, or cause to be taken,
all action and so do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the transactions contemplated by this Agreement, including, without limitation,
the obtaining of all necessary waivers, consents and approvals and the effecting
of all necessary registrations and filings.
8.6.3 Private Placement. UCI will use its commercially
reasonable best efforts to consummate a private placement through Laidlaw & Co
of up to $2.5 million (the "Private Placement"). UCI, based on conditions that
are prevailing of the date hereof and that have been brought to its attention,
knows of no circumstance or condition that it expects will prevent the
successful completion of the Private Placement.
8.6.4 UCI Stockholders Meeting. UCI, acting through its Board
of Directors, shall, subject to and in accordance with applicable law and its
Certificate of Incorporation, as amended, and its By-Laws, (i) promptly and duly
call, give notice of, convene and hold as soon as practicable following the date
hereof a meeting of the holders of UCI common stock for the purpose of voting to
approve to the extent required by applicable law the transaction contemplated
herein, and recommend approval and adoption thereof, (ii) prepare and file with
the SEC and upon clearance thereof submit to stockholders a proxy statement in
appropriate form for the solicitation of proxies with respect to the foregoing,
and (iii) take all reasonable action to solicit and obtain such approval.
8.6.5 Operation in Regular Course. Until Closing, UCI shall
carry on its business substantially in the same manner as it was carried on
prior to the date hereof; provided however nothing contained herein shall
preclude or in any way restrict UCI's acquiring one or more medical practices or
consummating the Private Placement.
8.7 Transactions Subsequent to Closing.
8.7.1 Employment Matters. Nothing contained herein shall be
construed to create any liability for UCI or any of the Transferees to present
or past employees of any Transferor or any other person or entity or regulatory
agency for periods prior to the date of Closing.
8.7.2 Books and Records. To the extent that any of
Transferors' books, records and documents are to be transferred to Transferees
hereunder, and Transferors may have need to have access to such transferred
books, records, and documents held by Transferees after the Closing, the
Transferees agree that they shall maintain for at least three (3) years after
the Closing (or for such longer period as may be required by applicable law) the
respective books, records and documents transferred hereunder. During said
period, representatives of Transferors shall be permitted to inspect and make
copies of said books, records and documents transferred to
Acquisition Agreement and
Plan of Reorganization
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Transferees, if any, during normal business hours and upon reasonable notice for
purposes related to winding up the affairs relating to the Business or for any
other appropriate purpose.
8.7.3 Trade Name. Each Transferor and Class B Shareholder
shall discontinue use of the trade names "MainStreet Healthcare" and "Prompt
Care".
8.7.4 Accounts Receivable. Each Transferor shall cooperate
with UCI of GA's attempts to collect the accounts receivable constituting
portions of the Assets and will promptly pay over to UCI of GA any proceeds of
such accounts receivable.
8.7.5 Transitional Permits. Each Transferor agrees, to the
extent permitted by law, that Transferees may operate for a period of up to 30
days after Closing under any permits or licenses of Transferors respecting the
Business which may not be assignable until similar permits or licenses are
issued to Transferees, provided Transferees promptly make and pursue application
for such permits and licenses and indemnifies Transferors for any loss or damage
from Transferees' operations under such permits or licenses. In the event that
any such permit or license is held in the name of an officer or agent of any
Transferor, Transferors shall use best efforts to cause such person to cooperate
in carrying out the intent of this Section.
8.7.6 Restrictions Against Competition.
8.7.6.1 For a period of three (3) years after
Closing, none of the Transferors:
8.7.6.1.1 shall own, operate, or establish,
in competition with UCI and/or any of the Transferees, an urgent care,
family care, or industrial and/or occupational medical business located
anywhere within the States of South Carolina, Tennessee, and Georgia.
8.7.6.1.2 shall, directly or through an
affiliate, solicit or divert (or assist another person or entity to
solicit or divert) any patient of the Business from purchasing or using
any of the services of the Transferees, or any one of them.
8.7.6.1.3 shall, directly or through an
affiliate, solicit or in any manner attempt to solicit or induce any
person employed by, or an agent of, one or more of the Transferees to
terminate such person's association or contract of employment or
agency, as the case may be, with such entity.
Acquisition Agreement and
Plan of Reorganization
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8.7.6.2 If any Transferor shall violate any of the
provisions of this Section 8.6.6, the Transferees shall be entitled to recover
any non-speculative lost profits incurred by any one or more of the Transferees
as a result of, growing out of, or in connection with, any such violation by a
Transferor. This remedy shall be in addition to, and not in limitation of, any
injunctive relief or other rights, remedies, or damages, to which any one or
more of the Transferees is or may be entitled as a result of this Agreement. In
the event of a breach or threatened breach by a Transferor of any of the
provisions of this Section 8.6.6, the Transferees, in addition to, and not in
limitation of, any other rights, remedies, or damages available to any one or
more of the Transferees at law or in equity, shall be entitled to a temporary
restraining order, preliminary injunction, and permanent injunction in order to
prevent or restrain any such breach by a Transferor or by a Transferor's
partners, agents, representatives, servants, employers, employees, companies,
consulting clients, and/or any and all persons directly or indirectly acting for
or with a Transferor. Each Transferor agrees that in the event of any breach by
a Transferor of the covenants set forth in this Section 8.6.6, the Transferees
shall suffer irreparable harm for which the remedy of monetary damages may be
inadequate.
8.7.6.3 Each of the Transferors acknowledges and
agrees that the restrictions contained in this Section 8.6.6 is reasonably
related to the value of the Assets sold to Transferees hereunder and that the
scope of this restriction is reasonable in time and territory. In the event
that, notwithstanding the foregoing, any of the provisions of this Section 8.6.6
or any parts thereof shall be held to be invalid or unenforceable, the remaining
provisions or parts thereof shall nevertheless continue to be valid and
enforceable as though the invalid or unenforceable portions or parts had not
been included therein. In the event that any provisions of Section 8.6.6
relating to the time period and/or the areas of restriction and/or the scope of
restricted activities and/or related aspects shall be declared by a court of
competent jurisdiction to exceed the maximum restrictiveness such court deems
reasonable and enforceable, the time period and/or areas of restriction and/or
the scope of restricted activities and/or related aspects deemed reasonable and
enforceable by the court shall become and thereafter be the maximum restriction
in such regard, and the restriction shall remain enforceable to the fullest
extent deemed reasonable by such court. In the event any Class B Shareholder
violates the terms of their respective Non- Solicit, a form of which is attached
hereto as Exhibit 8.3.7, such violation shall be deemed to be a violation by
each of the Transferors of the terms of this Section 8.6.6.
8.7.7 Confidentiality. Subsequent to Closing, each of
the Transferors shall hold in confidence all documents and information
concerning the Business and the Assets (except that Transferors may, after
reasonable notice to UCI of GA disclose such documents and information, or
copies or summaries thereof, to Transferors professional advisors, shareholders,
creditors, and any governmental authority reviewing the transactions
contemplated hereby, or as required in Transferors' reasonable judgment pursuant
to federal or state laws or regulations or court order). Such confidential
information shall not include information that can be demonstrated by
Acquisition Agreement and
Plan of Reorganization
Page 20
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independent documentary evidence to be publicly available other than as a result
of acts in breach of this Section or any Non-Solicit.
8.7.8 Publicity. Upon UCI of GA's request (if any), at a date
reasonably agreed upon by UCI of GA and MainStreet, but no later than thirty
(30) business days after Closing, MainStreet, at UCI of GA's expense, shall mail
to all those patients of Transferors designated by UCI of GA, a letter
substantially on the form provided by UCI of GA, subject to MainStreet's
approval (which shall not be unreasonably withheld) advising of the sale
hereunder and containing a request of Transferors that to the extent requested
by UCI of GA, such patient shall continue its relationships with Transferees.
Other than as directed or expressly permitted by Transferees or expressly
required by law, the Transferors and the Class B Shareholders shall not take any
action or make any disclosures which might reasonably be anticipated to have an
adverse affect on the Transferee's respective business operations relating to
the Assets. This provision shall not, however, be construed to prohibit any
Party from making any disclosures to any governmental authority which it is
required to make by law or from filing this Agreement with, or disclosing the
terms of this Agreement to, any governmentally-regulated institutional lender to
such Party, or prohibit Transferees or Transferors from disclosing to their
respective investors, lenders, and financial advisors such terms of this
transaction as are customarily disclosed to them in connection with the
disposition of such assets. The Parties hereto acknowledge and agree that UCI
may elect, either prior to or after Closing, in it sole discretion, to issue a
press release after consulting with MainStreet, and file documents with the SEC
and Nasdaq concerning the proposed acquisition and this Agreement.
8.7.9 Taxes. Each of the Transferors shall file such tax
returns and reports and pay such taxes to be paid by them as are required for
periods ending with the date of Closing.
8.7.10 Creditors. Each of the Transferors shall as and when
due use their reasonable best efforts within eleven (11) months after the date
of Closing to pay all of Transferors' valid liabilities not expressly assumed by
UCI of GA pursuant to Section 7.1.3 hereunder, and perform all of Transferors'
valid obligations which any of the Transferors have incurred in connection with
the Assets or the operation of the Business.
8.7.11 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.
8.7.12 Audit. At UCI of GA's expense, Transferors, no later
than May 30, 1998, shall provide UCI with the audited financial statements of
the Transferors for the period commencing April 1, 1997, and ending March 31,
1998.
8.7.13 Board of Directors. On or about the date of Closing,
Johnson shall be appointed to the Board of Directors of UCI. Also, to the extent
permitted by law, as long as
Acquisition Agreement and
Plan of Reorganization
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MainStreet or PENMAN is the holder of record of not less than five (5%) of the
issued and outstanding shares of the common stock of UCI, a representative of
PENMAN shall be invited to attend, at PENMAN's expense, all meetings of the
Board of Directors of UCI occurring after the date of Closing. For so long as
such representative of PENMAN is entitled to such invitation as set forth above,
such representative of PENMAN shall be given notice of all meetings of the Board
of Directors of UCI at the same time such notices are given to the directors of
UCI, and, to the extent permitted by law, shall be entitled to all information
generally made available to the directors of UCI. Such representative shall not
be entitled to vote on any matter.
8.8 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.
9. REPRESENTATIONS AND WARRANTIES OF TRANSFERORS AND CLASS B SHAREHOLDERS.
Except as otherwise set forth in the Schedule of Exceptions attached hereto as
Exhibit 9 (the "Schedule of Exceptions"), each of the Transferors and Class B
Shareholders severally and not jointly represent, warrant, and covenant to UCI
and the Transferees that the representations and warranties contained in this
Section 9 are true, correct and complete as of the date of this Agreement:
9.1 Organization of MainStreet; Authority. MainStreet is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, with the corporate power and authority to enter into this
Agreement and the other documents related thereto and to carry out and perform
its obligations under the terms of this Agreement and such other documents
related thereto. MainStreet has the full and unrestricted corporate power and
authority to own, operate and lease its assets and properties and to carry on
its business as currently conducted. MainStreet is qualified to do business and
in good standing in the State of Georgia, and as of the date of Closing the
State of Tennessee, which jurisdictions constitute the only jurisdictions in
which the nature of MainStreet's business requires it to be so qualified or in
which the failure to be so qualified, if required, would have a material adverse
effect on the MainStreet Business taken as a whole. The execution and delivery
of this Agreement and documents related thereto and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by all
requisite corporate or other action on the part of MainStreet and each of the
Class B Shareholders. This Agreement has been, and at the Closing the documents
related thereto shall be, duly executed and delivered by MainStreet and each of
the Class B Shareholders and constitutes the valid, binding and enforceable
obligation of MainStreet and each of the Class B Shareholders, enforceable in
accordance with its terms and conditions, subject to applicable bankruptcy,
reorganization, insolvency, moratorium and other laws affecting creditors'
rights generally from time to time in effect and to general equitable
principles.
Acquisition Agreement and
Plan of Reorganization
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9.2 Organization of MHMG-GA; Authority. MHMG-GA is a professional
corporation duly organized, validly existing and in good standing under the laws
of the State of Georgia, with the corporate power and authority to enter into
this Agreement and the other documents related thereto and to carry out and
perform its obligations under the terms of this Agreement and such other
documents related thereto. MHMG-GA has the full and unrestricted corporate power
and authority to own, operate and lease its assets and properties and to carry
on its business as currently conducted. MHMG-GA is qualified to do business and
in good standing in every jurisdiction in which the nature of MHMG-GA's business
requires it to be so qualified or in which the failure to be so qualified, if
required, would have a material adverse effect on the MHMG-GA Business taken as
a whole. The execution and delivery of this Agreement and documents related
thereto and the consummation of the transactions contemplated hereby and thereby
have been duly authorized by all requisite corporate or other action on the part
of MHMG-GA. This Agreement has been, and at the Closing the documents related
thereto shall be, duly executed and delivered by MHMG-GA and constitutes the
valid, binding and enforceable obligation of MHMG-GA, enforceable in accordance
with its terms and conditions, subject to applicable bankruptcy, reorganization,
insolvency, moratorium and other laws affecting creditors' rights generally from
time to time in effect and to general equitable principles.
9.3 Organization of MHMG-TN; Authority. MHMG-TN is a professional
corporation duly organized, validly existing and in good standing under the laws
of the State of Tennessee, with the corporate power and authority to enter into
this Agreement and the other documents related thereto and to carry out and
perform its obligations under the terms of this Agreement and such other
documents related thereto. MHMG-TN has the full and unrestricted corporate power
and authority to own, operate and lease its assets and properties and to carry
on its business as currently conducted. MHMG-TN is qualified to do business and
in good standing in every jurisdiction in which the nature of MHMG-TN's business
requires it to be so qualified or in which the failure to be so qualified, if
required, would have a material adverse effect on the MHMG-TN Business taken as
a whole. The execution and delivery of this Agreement and documents related
thereto and the consummation of the transactions contemplated hereby and thereby
have been duly authorized by all requisite corporate or other action on the part
of MHMG-TN. This Agreement has been, and at the Closing the documents related
thereto shall be, duly executed and delivered by MHMG-TN and constitutes the
valid, binding and enforceable obligation of MHMG-TN, enforceable in accordance
with its terms and conditions, subject to applicable bankruptcy, reorganization,
insolvency, moratorium and other laws affecting creditors' rights generally from
time to time in effect and to general equitable principles.
9.4 Organization of Prompt Care; Authority. Prompt Care is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Tennessee, with the corporate power and authority to enter into
this Agreement and the other documents related thereto and to carry out and
perform its obligations under the terms of this Agreement and such other
documents related thereto. Prompt Care is a wholly-owned Subsidiary of
MainStreet. As of the Closing, Prompt Care owns no assets and owes no
liabilities and has no interest in the
Acquisition Agreement and
Plan of Reorganization
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<PAGE>
Assets to be sold to Transferees hereunder or the proceeds thereof. The
execution and delivery of this Agreement and documents related thereto and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all requisite corporate or other action on the part of Prompt
Care. This Agreement has been, and at the Closing the documents related thereto
shall be, duly executed and delivered by Prompt Care and constitutes the valid,
binding and enforceable obligation of Prompt Care, enforceable in accordance
with its terms and conditions, subject to applicable bankruptcy, reorganization,
insolvency, moratorium and other laws affecting creditors' rights generally from
time to time in effect and to general equitable principles.
9.5 Ability to Carry Out the Agreement. None of the Transferors or
Class B Shareholders is subject to or bound by any provision of:
(i) any law, statute, rule, regulation, ordinance or judicial
or administrative decision;
(ii) any articles or certificate of incorporation or bylaws;
(iii) any contract, agreement, mortgage, deed of trust, lease,
note, stockholders' agreement, bond, indenture, other instrument or
agreement, license, permit, trust, custodianship or other restriction
of any kind or character whatsoever: or
(iv) any judgment, order, writ, injunction or decree of any
court, governmental body, administrative agency or arbitrator;
that would prevent or be violated by, or would result in any penalty, forfeiture
or material contract termination as a result of, or under which there would be a
default as a result of, nor is the consent of any Person under any contract or
agreement which has not been obtained required for, the execution, delivery and
performance by each of the Transferors and Class B Shareholders of this
Agreement and the transactions contemplated hereby.
9.6 Capitalization of MainStreet; Ownership. The authorized capital
stock of MainStreet consists solely of: (i) 20,000 shares of preferred stock,
par value $.01 per share (the "MainStreet Preferred Shares") of which 6,000
shares of the MainStreet Preferred Shares are 5.0% cumulative redeemable
preferred stock of which 4,367 shares are issued and outstanding, and the
remaining 14,000 shares of MainStreet Preferred Shares are "blank check
preferred" of which 2,500 shares have been designated 10% cumulative redeemable
preferred stock of which 412 shares are issued and outstanding; (ii) 5,000,000
shares of Class A non-voting convertible common stock, par value $0.01 per
share, of which 276,000 shares are issued and outstanding, and (iii) 20,000,000
shares of Class B common stock, par value $.01 per share, of which 6,460,452
shares are issued and outstanding. The shares of capital stock and other
securities described in Exhibit 9.6 hereto are the only shares of capital stock
and other securities of
Acquisition Agreement and
Plan of Reorganization
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<PAGE>
MainStreet which are issued and outstanding. All shares of the securities of
MainStreet are held of record by the respective security holders as set forth in
Exhibit 9.6 hereto.
9.7 Capitalization of MHMG-GA; Ownership. The authorized capital stock
of MHMG-GA consists solely of one hundred thousand (100,000) shares of common
stock, no par value, of which 5,000 shares are issued and outstanding and owned
by Pamela K. Erdman, M.D., and 5,000 shares are issued and outstanding and owned
by Harold Holloway, M.D.
9.8 Capitalization of MHMG-TN; Ownership. The authorized capital stock
of MHMG- TN consists solely of two thousand (2,000) shares of common stock, of
which 100 shares are issued and outstanding and owned by Laykoon Huang, M.D.
9.9 Universal, Subsidiaries and Affiliates. Universal is a Georgia
corporation whose Article of Incorporation were filed with the Georgia Secretary
of State on January 27, 1997, but no further steps have been taken to organize
Universal, including but not limited to the issuance of stock. Universal owns no
assets and owes no liabilities and has no interest in the Assets to be sold to
Transferees hereunder or in the proceeds thereof. MainStreet does not have, and
has never had, any Subsidiary other than Prompt Care and Universal and does not
control, directly or indirectly, or have any direct or indirect equity
participation or any interest in any corporation, partnership, limited liability
company, trust, venture, business, enterprise, firm or other business
association other than Prompt Care and Universal. Neither MHMG-GA nor MHMG-TN
has, and has never had, any Subsidiary and does not control, directly or
indirectly, or have any direct or indirect equity participation or any interest
in any corporation, partnership, limited liability company, trust, venture,
business, enterprise, firm or other business association.
9.10 Financial Statements. Attached hereto as Exhibit 9.10 are the
following financial statements of the Transferors (collectively the "Financial
Statements"): (i) the audited consolidated balance sheet as of March 31, 1997,
audited consolidated statements of operations, audited consolidated statement of
stockholder's equity, and audited consolidated statement of cash flows for the
fiscal year ended March 31, 1997; and (ii) the unaudited consolidated balance
sheet, unaudited consolidated statements of operations, unaudited consolidated
statement of stockholder's equity, and unaudited consolidated statement of cash
flows as of and for the nine (9) months ended December 31, 1997. The Financial
Statements (including the notes thereto) have been prepared in conformity with
United States generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods covered thereby, are true, correct and
complete, fairly present in all material respects the financial position of the
Transferors at the dates thereof and the results of operations of the
Transferors for the periods covered thereby (subject in the case of unaudited
statements to normal year-end adjustments), and are consistent with the books
and records of the Transferors (which books and records are materially correct
and complete).
9.11 Conduct of Business Since March 31, 1997; Absence of Material
Adverse Change. Since March 31, 1997, there has been no material adverse change
in the Business, operations,
Acquisition Agreement and
Plan of Reorganization
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results of operations, assets, properties or financial condition of any of the
Transferors. Since such date, except as contemplated in this Agreement: (i) each
of the Transferors has conducted its respective businesses in the manner
theretofore conducted and only in the ordinary course consistent with past
practices; and (ii) without limiting the generality of the foregoing, none of
the Transferors has:
9.11.1 incurred any loss of, or injury to, the assets or
properties of any of the Transferors as the result of any fire, explosion,
flood, windstorm, earthquake, labor trouble, riot, accident, act of God, public
enemy or armed forces, or other casualty (whether or not covered by insurance
payable to any of the Transferors);
9.11.2 mortgaged, pledged or subjected to lien, charge,
security interest or any other Encumbrance, other than in the ordinary course of
business, any of its assets or properties with respect to any obligations;
9.11.3 sold, exchanged, transferred or otherwise disposed of
any of its assets or properties, tangible and intangible, or cancelled any debts
or claims, other than in the ordinary course of business;
9.11.4 written down the value of any assets or properties or
written off as uncollectible any notes or accounts receivable, except
write-downs and write-offs in the ordinary course of business consistent with
past practices;
9.11.5 made any material change in any method of accounting or
accounting practice except where required by a change in GAAP or reflected in
the Financial Statements;
9.11.6 waived or released any rights of material value; or
9.11.7 agreed or committed, whether in writing or not, to do
any of the foregoing.
9.12 Title to Assets; Absence of Liens.
9.12.1 MainStreet has good, valid and marketable title to, or
valid and subsisting leasehold interests in, all the MainStreet Assets, free and
clear of any and all Encumbrances, except for Encumbrances reflected in the
Financial Statements including that certain lien on MainStreet's accounts
receivable held by Bank One, L.P., and which do not unreasonably or materially
interfere with the conduct of MainStreet's business operations as currently
conducted.
9.12.2 MHMG-GA has good, valid and marketable title to all the
MHMG-GA Assets, free and clear of any and all Encumbrances. The MHMG-GA Assets
consist solely of the medical records of the patients of MHMG-GA.
Acquisition Agreement and
Plan of Reorganization
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9.12.3 MHMG-TN has good, valid and marketable title to all the
MHMG-TN Assets, free and clear of any and all Encumbrances. The MHMG-TN Assets
consist solely of the medical records of the patients of MHMG-TN.
9.13 Status of Assets. The Assets sold hereunder constitute all of the
assets of the Business (taking into account the Excluded Assets) and include all
property, rights, and intangibles necessary for Transferees to operate after
Closing a business similar to the Business as is presently conducted. All
material inventory systems, computer systems, telephone 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 good and
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 GA is materially accurate, and such accounts
receivable reflect valid, binding, and enforceable rights of the Business which
shall be lawfully transferred to UCI of GA hereunder.
9.14 Litigation. There are no judicial or administrative actions or
proceedings pending, or to the best of each Transferors's and/or each Class B
Shareholders' 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 a material adverse effect
upon any of the Transferors' and/or any Class B Shareholders' ability to enter
into this Agreement or perform its obligations hereunder or upon the use,
enjoyment, or value of the Assets for the Transferees.
9.15 Compliance with Laws. Each of the Transferors is in compliance
with all laws, ordinances, and regulations that govern their respective
ownership and present use of the Assets, the violation of which would have a
material adverse effect on the Assets or the Business. All of the Assets sold
hereunder, and each of the Facilities leased hereunder, substantially comply
with applicable environmental, zoning, health, OSHA, consumer products, and fire
safety regulations where such non-compliance does not have a material effect on
the Business or Assets.
9.16 Brokers. None of the Transferors nor any Class B Shareholder has
dealt with any broker in connection with this transaction other than Laidlaw &
Company, and no brokerage commission nor claim thereof shall accrue or become
payable to any person or entity respecting this transaction other than Laidlaw &
Company. Each of the Transferors and Class B Shareholders acknowledge and agree
that any and all commissions payable to Laidlaw & Company in connection with
consummation of the transactions contemplated herein shall be paid by
MainStreet. Notwithstanding the foregoing, the Parties acknowledge that certain
commissions shall be payable to Laidlaw & Company by UCI in connection with
certain capital raising transactions unrelated to the transactions contemplated
herein, including but not limited to that certain Private Placement.
Acquisition Agreement and
Plan of Reorganization
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9.17 Payables, Taxes, and Creditors. Each of the Transferors and Class
B Shareholders shall not hinder, delay, defraud, or avoid any obligation to any
past, present or future creditor in the transactions contemplated by this
Agreement. The consideration to be received by the Transferors from the
Transferees pursuant to this Agreement is more than a reasonably equivalent
value in exchange for the transfer of the Assets. Each of the Transferors is
currently solvent and will not be rendered insolvent as a result of the
transactions contemplated hereby. None of the Transferors has 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.
9.18 Employee Benefits.
9.18.1 Exhibit 9.18.1 lists each Employee Benefit Plan that
any of the Transferors maintain or to which any of the Transferors contribute.
Each such Employee Benefit Plan (and each related trust, insurance contract or
fund) complies in form and in operation in all material respects with the
applicable requirements of ERISA, the Code, and other applicable laws.
9.18.2 All required reports and descriptions (including Form
5500 Annual Reports, Summary Annual Reports, PBGC-1's and Summary Plan
Descriptions) have been filed or distributed appropriately with respect to each
such Employee Benefit Plan. The requirements of Part 6 of Subtitle B of Title I
of ERISA and of Code Section 4980B have been met with respect to each such
Employee Benefit Plan which is an Employee Welfare Benefit Plan.
9.18.3 All contributions (including all employer contributions
and employee salary reduction contributions) which are due have been paid to
each such Employee Benefit Plan which is an Employee Pension Benefit Plan, and
all contributions for any period ending on or before the date of Closing which
are not yet due, have been paid to each such Employee Pension Benefit Plan or
accrued in accordance with the past custom and practice of the Transferors. All
premiums or other payments for all periods ending on or before the date of
Closing have been paid with respect to each such Employee Benefit Plan which is
an Employee Welfare Benefit Plan.
9.18.4 Each such Employee Benefit Plan which is an Employee
Pension Benefit Plan meets the requirements of a "qualified plan" under Code
Section 401(a) and has received, within the last two (2) years, a favorable
determination letter from the Internal Revenue Service.
9.18.5 The Transferors have delivered to UCI of GA correct and
complete copies of the plan documents and summary plan descriptions, the most
recent determination letter received from the Internal Revenue Service, the most
recent Form 5500 Annual Report and all related trust agreements, insurance
contracts and other funding agreements which implement each such Employee
Benefit Plan.
Acquisition Agreement and
Plan of Reorganization
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<PAGE>
9.18.6 None of the Transferors has 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 any of the Transferors for the alleged violation of the Code
with respect to the Business, or their respective operations.
9.19 Insurance.
9.19.1 Exhibit 9.19.1 sets forth the following information
with respect to each insurance policy (including policies providing property,
casualty, liability or workers' compensation coverage or bond or surety
arrangements) or self-insurance arrangement to which any of the Transferors is a
party, a named insured, or otherwise the beneficiary of coverage as of the date
hereof.
(i) the name, address and telephone number of the
agent;
(ii) the name of the insurer, the name of the
policyholder and the name of each covered insured;
(iii) the policy number and the period of coverage;
(iv) the scope (including an indication of whether
the coverage was on a claims made, occurrence or other basis) and
amount (including a description of how deductibles and ceilings are
calculated and operate) of coverage; and
(v) a description of any retroactive premium
adjustments or other loss-sharing arrangements.
9.19.2 With respect to each such insurance policy: (i) to the
Knowledge of each Transferor and each Class B Shareholder, the policy is legal,
valid, binding, enforceable and in full force and effect; (ii) to the Knowledge
of each Transferor and each Class B Shareholder, the policy if it is an
"occurrence policy" shall continue to be legal, valid, binding, enforceable and
in full force and effect on identical terms following the consummation of the
transactions contemplated by this Agreement; (iii) to the Knowledge of each
Transferor and each Class B Shareholder, each of the Transferors are not nor is
any other party to the policy in breach or default (including with respect to
the payment of premiums or the giving of notices), and no event has occurred
which, with notice or the lapse of time, would constitute such a breach or
default, or permit termination, modification or acceleration, under the policy;
(iv) no party to the policy has repudiated any provision thereof; and (v) no
claims have been made during the past five years. Each of the Transferors has
been covered since their respective dates of formation by insurance in scope and
amount consistent with current coverage, taking into account the growth of their
respective businesses.
Acquisition Agreement and
Plan of Reorganization
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9.19.3 For a period of one (1) year after the date of Closing,
the Transferors, at their expense, shall maintain a comprehensive general
liability "claims made" policy for discontinued operations of the Transferors in
the amount of $1,000,000 per occurrence, and UCI and each of the Transferees
shall be listed as additional insureds under such policy. Evidence of such
insurance shall be delivered to Transferees at Closing.
9.20 Directors, Officers and Employees. Exhibit 9.20 contains a correct
and complete listing as of the date hereof of all of the directors, officers and
employees of each of the Transferors, respectively, showing their names,
positions and current wage or salary and rights to bonuses.
9.21 Labor Relations; Employees.
9.21.1 None of the Transferors has a collective bargaining
agreement with any of its employees; there is no labor union organizing activity
pending or, to the Knowledge of each of the Transferors, threatened with respect
to any Transferor; and none of the Transferors has experienced any strikes,
grievances, claims of unfair labor practices or other collective bargaining
disputes. None of the Transferors has committed any unfair labor practices.
9.21.2 There is no pending claim nor, to the Knowledge of each
Transferor, threatened (including, but not limited to, governmental agencies of
any kind) against any of the Transferors arising out of any federal, state,
county, local or foreign statute, ordinance or regulation relating to
discrimination against employees or any other employee practices, including
without limitation retirement or labor relations, or occupational, safety and/or
health standards, sexual harassment or intentional infliction of emotional
distress.
9.22 Real Property.
9.22.1 Other than MainStreet's facility located at 2362 Main
Street, Tucker, Georgia which is owned by MainStreet, none of the Transferors
owns any real property.
9.22.2 Exhibit 7.2.1(b) lists and describes briefly all real
property leased or subleased to or by each of the Transferors, including but not
limited to each of the MainStreet Real Estate Leases. MainStreet has delivered
to UCI of GA correct and complete copies of the leases and subleases (as amended
to date) listed in Exhibit 7.2.1(b). With respect to each such lease and
sublease:
(i) to each Transferor's Knowledge, the lease or sublease is
legal, valid, binding, enforceable and in full force and effect:
(ii) None of the Transferors is, and, to MainStreet's
Knowledge, no other party to the lease or sublease is, in breach or
default, and, to the Knowledge of MainStreet, no
Acquisition Agreement and
Plan of Reorganization
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event has occurred which, with notice or lapse of time, would
constitute a breach or default or permit termination, modification or
acceleration thereunder;
(iii) no party to the lease or sublease has repudiated any
provision thereof;
(iv) there are no disputes, oral agreements or forbearance
programs in effect as to the lease or sublease;
(v) with respect to each sublease, the representations and
warranties set forth in clauses (i) through (iv) above are true and
correct with respect to the underlying lease;
(vi) none of the Transferors has assigned, transferred,
conveyed, mortgaged, deeded in trust or encumbered any interest in the
leasehold or subleasehold;
(vii) all facilities leased or subleased thereunder have
received all approvals of governmental authorities (including licenses
and permits) required in connection with the operation thereof and have
been operated and maintained in accordance with applicable laws, rules
and regulations;
(viii) all facilities leased or subleased thereunder are
supplied with utilities and other services necessary for the operation
of said facilities;
(ix) to the Knowledge of MainStreet, the owner of the facility
leased or subleased has good and marketable title to the parcel of real
property, free and clear of any Encumbrance, easement, covenant or
other restriction, except for installments of special easements not yet
delinquent and recorded easements, covenants and other restrictions
which do not unreasonably interfere with the Transferors' current use
of the property; and
(x) as of the date of Closing, MainStreet shall have paid all
payments then due and owing pursuant to such leases and such leases
shall not otherwise be in default or subject to acceleration.
9.23 Equipment Leases. Exhibit 7.2.1(a) lists and describes briefly all
equipment leased to or by each of the Transferors, including but not limited to
each of the MainStreet Equipment Leases. MainStreet has delivered to UCI of GA
correct and complete copies of the leases (as amended to date) listed in Exhibit
7.2.1(a). With respect to each such lease:
(i) to each Transferor's Knowledge, the lease is legal, valid,
binding, enforceable and in full force and effect:
(ii) None of the Transferors is, and, to MainStreet's
Knowledge, no other party to the lease is, in breach or default, and,
to the Knowledge of MainStreet, no event has
Acquisition Agreement and
Plan of Reorganization
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<PAGE>
occurred which, with notice or lapse of time, would constitute a breach
or default or permit termination, modification or acceleration
thereunder;
(iii) no party to the lease has repudiated any provision
thereof;
(iv) there are no disputes, oral agreements or forbearance
programs in effect as to the lease;
(v) none of the Transferors has assigned, transferred,
conveyed, mortgaged, deeded in trust or encumbered any interest in the
leasehold;
(vi) all equipment leased thereunder has received all
approvals of governmental authorities (including licenses and permits)
required in connection with the operation thereof and has been operated
and maintained in accordance with applicable laws, rules and
regulations;
(vii) to the Knowledge of MainStreet, the owner of the
equipment leased has good and marketable title to equipment, free and
clear of any Encumbrance; and
(viii) as of the date of Closing, MainStreet shall have paid
all payments then due and owing pursuant to such leases and, to the
Knowledge of each Transferor and each Class B Shareholder, such leases
shall not otherwise be in default or subject to acceleration.
9.24 Line of Credit. As of the Closing, none of the terms of
MainStreet's line of credit obligation with Bank One, N.A. (formerly NPL-LP.
Inc.) shall have changed from the terms set forth in those certain loan
documents supplied by MainStreet to UCI of GA (unless otherwise requested or
agreed by UCI of GA in writing). As of the date of Closing, MainStreet shall
have paid all payments then due and owing pursuant to such line of credit and
such obligation shall not otherwise be in default or subject to acceleration.
The Parties hereto acknowledge that Bank One, L.P shall retain a lien on
MainStreet's accounts receivable being conveyed to UCI of GA hereunder.
9.25 Environmental Matters.
9.25.1 In all material respects, each of the Transferors is in
compliance with all local, state and federal statutes, ordinances, and
regulations dealing with the protection of the environment or public health and
safety, including, but not limited to, the Comprehensive Environmental Response,
Compensation, and Liability Act (codified as amended, 42 U.S.C. ss.ss. 9601 et
seq.) ("CERCLA") and the Resource Conservation and Recovery Act (codified as
amended, 42 U.S.C. ss.ss. 6901 et seq.) ("RCARA").
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Plan of Reorganization
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9.25.2 Each of the Transferors has obtained all required
local, state and federal permits, licenses, certificates and approvals, if any,
relating to: (i) air emissions; (ii) discharges to surface water or groundwater;
(iii) noise emissions; (iv) solid or liquid waste disposal; (v) the use,
generation, storage, transportation or disposal of toxic or hazardous substances
or wastes (intended hereby and hereafter to include any and all such materials
listed in any local, state or federal statute, ordinance or regulation); (vi)
the use, storage, transportation or disposal of petroleum or petroleum products;
or (vii) other environmental, health and safety matters.
9.25.3 Each of the Transferors has not caused, suffered,
permitted or sustained any emission, spill, release or discharge of any toxic or
hazardous substances or wastes, or any petroleum products, into or upon: (i) the
air; (ii) soils or any improvements located thereon, whether on a Transferors'
property or elsewhere; (iii) surface water or groundwater; or (iv) a sewer,
septic system or waste treatment, storage or disposal system except in
accordance with applicable law or a valid government permit, license,
certificate or approval.
9.25.4 None of the Transferors, nor any of the Class B
Shareholders has received written notice of any actual or potential claims,
orders, directives, citations or causes of action based on actual or alleged
violations of any local, state, or federal statutes, ordinances or regulations
dealing with the protection of the environment or public health and safety,
including, but not limited to, CERCLA or RCARA, or written notice of any actual
or potential common law claims or causes of action based upon any Transferor's
actual or alleged involvement with or use of any substance regulated by local,
state or federal statutes, ordinances or regulations dealing with the protection
of the environment or public health and safety.
9.25.5 None of the Transferors, nor any of the Class B
Shareholders has received oral or written notice of any actual or potential
claims, orders, directives, citations or causes of action under any local, state
or federal statutes, ordinances or regulations dealing with the protection of
the environment or public health and safety, including, but not limited to,
CERCLA and RCARA, based upon or arising out of its actual or alleged disposal of
hazardous wastes or substances, whether on or off real property being operated
by any of the Transferors.
9.26 Consents. No consent, approval or authorization of or designation,
declaration or filing with any state, federal or foreign governmental authority
is required in connection with the valid execution and delivery of this
Agreement and the consummation by the Transferors and Class B Shareholders of
the transactions contemplated hereby. At Closing, no consent of any third party
which has not been obtained is required in connection with the transfer and
assignment of the Assets hereunder.
9.27 Zoning. To the best of each Transferor's and each Class B
Shareholder's Knowledge, each of the Georgia Facilities and Tennessee Facilities
is currently zoned for commercial operations and are in compliance with
applicable zoning laws and ordinances; and
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Plan of Reorganization
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each of the Transferors and Class B Shareholders does not know that the status
of such zoning is in question or subject to change by the appropriate
governmental authorities.
9.28 Normal Course. MainStreet has 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 MainStreet Assets prior to the Closing. MHMG-GA has 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 MHMG-GA Assets prior to the Closing. MHMG-TN has
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 MHMG-TN Assets prior to the
Closing. Each of the Transferors shall exercise their respective best efforts to
preserve the goodwill of the employees, patients, suppliers and others having
business relationships with the Business through the date of Closing.
9.29 Workers' Compensation. There are no worker compensation or similar
claims or actions pending or threatened, and each of the Transferors and/or each
of the Class B Shareholders do not know of facts which would make such claims
timely, by past or present employees of any of the Transferors.
9.30 No Adverse Conditions. Except as previously disclosed in writing
to UCI of GA, to the best of each Transferor and/or Class B Shareholder's
Knowledge 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 the Transferees' ability to operate a business
similar to the Business utilizing the Assets. Notwithstanding the foregoing, if
the condition or circumstance existed as of the date of execution of this
Agreement but was not disclosed as set forth above, no Transferor or Class B
Shareholder shall be in violation of this Section 9.30 in the event such adverse
condition or circumstance is cured as of Closing to UCI of GA's reasonable
satisfaction. In the event the adverse condition or circumstance arises
subsequent to the execution of this Agreement, and a Transferor or Class B
Shareholder has Knowledge of such condition or circumstance, such condition or
circumstance shall be disclosed in writing to UCI of GA.
9.31 Copies of Documents. True, correct and complete copies of all
documents listed in the exhibits and schedules hereto with respect to the
representations and warranties contained in this Section 9 have been heretofore
delivered to UCI of GA.
9.32 Disclosure. Each disclosure in the Schedule of Exceptions
disclosed as an exception to a representation or warranty of the Transferors and
Class B Shareholders shall be deemed adequate to disclose an exception to a
representation or warranty made herein to which it relates only if such
disclosure refers to an agreement delivered to UCI of GA or identifies the
exception with reasonable particularity and includes a brief description of the
facts or obligation.
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Plan of Reorganization
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To the Knowledge of each of the Transferors and Class B Shareholders, no
information about any of the Transferors contained in this Agreement or any
document executed in connection therewith, the Financial Statements, or any
written statement furnished by or on behalf of the Transferors or Class B
Shareholders pursuant to the terms of this Agreement contains any untrue
statement of material fact or omits to state any material fact necessary in
order to make the statements and information contained herein or therein not
misleading in light of the circumstances under which made.
9.33 Representations and Warranties at Closing. Except as expressly
otherwise permitted in this Agreement, the representations and warranties of
each Transferor and/or each Class B Shareholder set forth in this Agreement
shall be true as of the date of Closing as though such representations and
warranties were made on such date, unless they reference a specific earlier date
whereupon, as of the Closing, they shall be true as at the earlier date
referenced. Notwithstanding the foregoing, Transferor and the Class B
Shareholders shall promptly notify Transferees of any occurrence or state of
facts which would result in any of the representations and warranties contained
in this Section 9 not being true and correct if made anew at the time of such
notice. From time to time prior to Closing, Transferor and the Class B
Shareholders shall promptly supplement and amend any Exhibit referenced in this
Section 9 with respect to any matter hereafter arising which, if existing or
occurring at the date of this Agreement, would have been required to be set
forth or described on an Exhibit referenced in this Section 9. No such
supplement or amendment shall have the effect of curing any inaccuracy or
misrepresentation in any representation or warranty in this Agreement as of the
date hereof unless each Transferee elects in writing to waive such inaccuracy or
misrepresentation.
9.34 Value of Assets and Future Profitability. Except as expressly set
forth herein, Transferors and the Class B Shareholders make no representation or
warranty of any kind whatsoever, including as to the value of the Assets or the
future profitability or future earnings performance of the business of UCI of GA
after the date of Closing.
10. REPRESENTATIONS AND WARRANTIES OF UCI AND THE TRANSFEREES. UCI and UCI of
GA, jointly and severally, represent, warrant, and covenant to the Transferors
and Class B Shareholders that the representations and warranties contained in
this Section 10 are true, correct and complete as of the date of this Agreement:
10.1 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 GA 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.
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Plan of Reorganization
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10.2 Authority. Other than the approval of shareholders of UCI, UCI and
UCI of GA 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. This Agreement has been, and at
the Closing the documents related thereto shall be, duly executed and delivered
by UCI and UCI of GA, and constitute valid and binding obligations of UCI and
UCI of GA 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.
10.3 Ability to Carry Out the Agreement. Other than the required
approval of the shareholders of UCI, neither UCI nor UCI of GA is subject to or
bound by any provision of:
(i) any law, statute, rule, regulation, ordinance or judicial
or administrative decision;
(ii) any articles or certificate of incorporation or bylaws;
(iii) any contract, agreement, mortgage, deed of trust, lease,
note, shareholders' agreement, bond, indenture, other instrument or
agreement, license, permit, trust, custodianship other restriction of
any kind or character whatsoever; or
(iv) any judgment, order, writ, injunction or decree of any
court, governmental body, administrative agency or arbitrator;
that would prevent or be violated by or would result in any penalty, forfeiture
or contract termination as a result of, or under which there would be a default
as a result of, nor is the consent of any Person under any material agreement
which has not been obtained required for, the execution, delivery and
performance by either UCI or UCI of GA of this Agreement and the transactions
contemplated hereby, other than violations, penalties, forfeitures, contract
terminations, defaults or failure to obtain consents which, singly or in the
aggregate, shall not have a material adverse effect on the enforceability or
validity of this Agreement or the ability of UCI and UCI of GA to perform their
respective obligations hereunder.
10.4 Capitalization. UCI is authorized to issue: (i) Ten Million
(10,000,000) shares of UCI Common Stock of which 5,744,965 shares are issued and
outstanding as of the date hereof; and (ii) Ten Million (10,000,000) shares of
Preferred Stock, $0.01 par value per share, none of which is issued and
outstanding. Upon the approval of the shareholders of UCI which is anticipated
prior to Closing, UCI shall amend its certificate of incorporation to authorize
Thirty Million (30,000,000) shares of UCI common stock. As of Closing, all of
the Shares to be issued in the transaction described herein shall be duly
authorized and reserved for issuance pursuant to
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Plan of Reorganization
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this Agreement, and, upon the consummation of the transactions contemplated
hereby, shall be validly issued, fully paid, nonassessable and not subject to
preemptive rights.
10.5 Securities Law Filings. UCI has previously furnished to MainStreet
and the Class B Shareholders copies of: (i) its Annual Report on Form 10-KSB/A
for the year ended September 30, 1997, as filed with the SEC; and (ii) its
Quarterly Report on Form 10-QSB for the quarters ended December 31, 1997. UCI
has filed all documents required to be filed with the SEC since January 1, 1996
(the "UCI SEC Documents"). As of their respective dates, the UCI SEC Documents
compiled in all material respects with the requirements of the Securities Act of
1933, as amended, or the Securities and Exchange Act of 1934, as amended, as the
case may be, and none of the UCI SEC Documents contained any untrue statement of
a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The consolidated
financial statements of UCI included in the UCI SEC Documents complied as to
form in all material respects with the applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles (except, in
the case of the unaudited statements, as permitted by Form 10-QSB of the SEC)
applied on a consistent basis during the periods involved (except as may be
indicated therein or in the notes thereto) and fairly, accurately and completely
present the consolidated financial position of UCI and its consolidated
Subsidiaries, at the respective dates thereof and the consolidated results of
its operations and its consolidated cash flows for the respective periods then
ended (subject, in the case of the unaudited statements, to normal year-end
audit adjustments and to any other adjustments described therein).
10.6 Litigation. There are no judicial or administrative actions or
proceedings pending, or to the best Knowledge of UCI and UCI of GA, 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.
10.7 Taxes. UCI has paid or caused to be paid promptly when due all
city, county and state ad valorem taxes and similar taxes and assessments
imposed upon or assessed against the assets of UCI or its Subsidiaries prior to
the Closing.
10.8 Compliance with Laws. UCI and UCI of GA is in compliance with all
laws, ordinances, and regulations that govern their respective assets, the
violation of which would have a material adverse effect on the business of UCI
taken as a whole.
10.9 Payables and Creditors. UCI of GA shall pay all accounts payable
and taxes, assessments, and charges respecting the Assets incurred after the
date of Closing within a reasonable amount of time following Closing in
accordance with their terms and will protect the
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Plan of Reorganization
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reputation of the Transferors by paying all the valid debts and obligations of
each of the Transferors which have been expressly assumed by UCI of GA
hereunder.
10.10 Disclosure. To the Knowledge of UCI and UCI of GA, no information
about any of the Transferees contained in this Agreement or any document
executed in connection therewith, or any written statement furnished by or on
behalf of the Transferees pursuant to the terms of this Agreement contains any
untrue statement of material fact or omits to state any material fact necessary
in order to make the statements and information contained herein or therein not
misleading in light of the circumstances under which made.
10.11 Representations and Warranties at Closing. Except as expressly
otherwise permitted in this Agreement, the representations and warranties of UCI
and UCI of GA set forth in this Agreement shall be true as of the date of
Closing as though such representations and warranties were made on such date,
unless they reference a specific earlier date whereupon, as of the Closing, they
shall be true as at the earlier date referenced.
11. CONDITIONS PRECEDENT.
11.1 Conditions of UCI and the Transferees. The obligations of UCI and
the Transferees hereunder shall be subject, to the extent not waived, to the
satisfaction of each of the following conditions at the Closing:
11.1.1 Representation and Warranties. The representations and
warranties of all of the Transferors and all of the Class B Shareholders
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 date of Closing as though such representations
and warranties had been made as of the date of Closing.
11.1.2 Performance of this Agreement. All of the Transferors
shall have performed and complied in all material respects with all covenants,
conditions, and agreements required by this Agreement to be performed or
complied with by it prior to or at the Closing.
11.1.3 Consents, Regulatory Filings, and Approvals. All third
party consents, approvals, licenses, and permits, if any, the granting of which
are necessary for the consummation of the transactions contemplated hereby,
shall have been obtained, and all waiting periods specified by law, if any, the
passing of which are necessary for such consummation, shall have passed.
11.1.4 Litigation, Injunctions. There shall be no injunction,
order or decree of any court or governmental agency or authority prohibiting or
enjoining UCI or any of the Transferees from consummating the transactions
contemplated hereby or materially affecting the Assets.
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Plan of Reorganization
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11.1.5 Deliveries. The deliveries of documents which each of
the Transferors and each of the Class B Shareholders is obligated to make under
Section 8.3 shall have been made.
11.1.6 Real Estate Leases. As of Closing, UCI of GA shall have
entered into valid and binding leases or validly assumed the existing leases for
all of the Georgia Facilities and Tennessee Facilities.
11.1.7 Computer Equipment Installation. Prior to Closing, each
of the Transferors shall provide UCI of GA and its agents during the term of
this Agreement reasonable access to each of the Georgia Facilities and Tennessee
Facilities to install any and all computer equipment, at UCI of GA's expense.
11.1.8 Medical Providers. As of Closing, Transferees shall
have entered into employment agreements with no less than ten (10) of the
physician-employees and/or physician assistant/nurse practitioner employees of
the Transferors (collectively the "Medical Providers") executing; provided
however, the Transferees reserve the right to require Transferors to deliver
executed employment agreements from certain Medical Providers to be disclosed by
UCI of GA to Transferors prior to Closing. All such employment agreements shall
also include non-compete provisions which are consistent with such employee's
current non-compete agreements with the Transferors.
11.1.9 Private Placement. As of Closing, UCI shall have
successfully completed the Private Placement.
11.1.10 Approval of Shareholders of UCI. The Parties hereto
acknowledge that the transactions described herein require the approval of the
shareholders of UCI. In the event, the shareholders of UCI fail for any reason
to timely approve the transactions described herein, this Agreement shall be
null, void, and without effect, and no Party shall have any further obligation
to any other Party hereunder.
11.1.11 No Material Adverse Change. Since December 31, 1997,
there shall have been no material adverse change in the assets, Business,
operations, results of operations or financial condition of MainStreet, except
events or changes contemplated by this Agreement, changes consented to in
writing by UCI of GA and changes in the ordinary course of business which are
not, either individually or in the aggregate, materially adverse.
11.2 Transferors' Conditions. Each of the Transferors' and each of the
Class B Shareholders' obligations to sell the Assets shall be subject, to the
extent not waived, to the satisfaction of each of the following conditions at
the Closing:
11.2.1 Representation and Warranties. The representations and
warranties of UCI and the Transferees contained in this Agreement shall be true
and correct in all material respects
Acquisition Agreement and
Plan of Reorganization
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as of the date when made and, except for changes specifically contemplated by
this Agreement, on and as of the date of Closing as though such representations
and warranties had been made as of the date of Closing.
11.2.2 Performance of this Agreement. UCI and the Transferees
shall have performed and complied in all material respects with all covenants,
conditions, and agreements required by this Agreement to be performed or
complied with by them respectively prior to or at the Closing.
11.2.3 Consents, Regulatory Filings, and Approvals. All third
party consents, approvals, licenses, and permits, if any, the granting of which
are necessary for the consummation by each of the Transferors of the
transactions contemplated hereby, shall have been obtained and all waiting
periods specified by law, the passing of which are necessary for such
consummation, if any, shall have passed.
11.2.4 Litigation, Injunctions. There shall be no injunction,
order or decree of any court or governmental agency or authority prohibiting or
enjoining any of the Transferors from consummating the transactions contemplated
hereby.
11.2.5 Deliveries. The deliveries of documents which UCI and
the Transferees are obligated to make under Section 8.4 shall have been made.
11.2.6 No Material Adverse Change. Since December 31, 1997,
there shall have been no material adverse change in the assets, business,
operations, results of operations or financial condition of UCI, except events
or changes contemplated by this Agreement, changes consented to in writing by
MainStreet and changes in the ordinary course of business which are not, either
individually or in the aggregate, materially adverse.
12. COST AND EXPENSES.
12.1 Transactional Cost. The Parties 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.
12.2 Proration of Taxes and Charges. All personal property taxes and
like charges (which are not terminated and paid as of Closing by the
Transferors), if any, relating to the personal (tangible and intangible)
property comprising the Assets shall be prorated as of the date of closing, 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,
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Plan of Reorganization
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a net balance is owed by Transferors to Transferees, 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. Transferors shall be responsible for, and
shall pay, all sales taxes, if any, applicable to the sale of the Assets as
called for herein.
13. INDEMNITY RIGHTS.
13.1 General Indemnity
13.1.1 By Transferors and Class B Shareholders. Each of the
Transferors and the Class B Shareholders shall jointly and severally (but with
respect to the Class B Shareholders severally and not jointly in accordance with
their respective Percentage of Responsibility as set forth in Section 13.5
below) indemnify and hold UCI and each of the Transferees and their respective
officers, directors and agents harmless, from any and all Indemnity Damages
asserted against or incurred by UCI or any of the Transferees as a result of any
breach by any of the Transferors and/or any of the Class B Shareholders of any
covenant, warranty representation, or agreement, made by any of the Transferors
and/or any of the Class B Shareholders herein or in agreements related hereto
including but not limited to litigation expenses and legal fees that might be
incurred because of such breach.
13.1.2 By Transferees and UCI. Each of the Transferees and UCI
shall indemnify and hold each of the Class B Shareholders and Transferors and
their respective officers, directors and agents harmless, from any and all
Indemnity Damages asserted against or incurred by any of the Transferors as a
result of any breach by UCI and/or any of the Transferees of any covenant,
warranty representation, or agreement, made by UCI and/or any of the Transferees
herein or in agreements related hereto including but not limited to litigation
expenses and legal fees that might be incurred because of such breach.
13.2 Special Indemnities. Each of the Transferors and the Class B
Shareholders shall jointly and severally (but with respect to the Class B
Shareholders severally and not jointly in accordance with their respective
Percentage of Responsibility as set forth in Section 13.5 below) indemnify and
hold UCI and each of the Transferees and their respective officers, directors,
and agents harmless from any and all Indemnity Damages asserted against or
incurred by UCI or any of the Transferees as a result of:
13.2.1 Award or Settlement. Any lawsuit or similar claim
against any of the Transferors and/or any of the Class B Shareholders arising
from events or conditions prior to the date of Closing.
13.2.2 Title to Assets. Any challenge to: (a) any of the
Transferors' title to the Assets, or (b) the transfer of such title and interest
to the Transferees pursuant to the Agreement.
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Plan of Reorganization
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13.2.3 Accounts Payable. Any accounts payable, taxes,
assessments, or charges of any of the Transferors and/or any of the Class B
Shareholders, provided such accounts payable is not expressly assumed by UCI of
GA herein.
13.2.4 Bulk Sales. Any and all Indemnity Damages asserted
against or incurred by UCI or any of the Transferees under any applicable
Uniform Commercial Code - Bulk Transfers Act respecting this Agreement.
13.2.5 Worker's Compensation Award. Any and all Indemnity
Damages asserted against or incurred by UCI or any of the Transferees as a
result of any Worker's Compensation award or settlement with respect to any
claim of an employee of any of the Transferors arising from an accident or
work-related injury occurring prior to the Closing.
13.2.6 Medical Malpractice Claims. Any and all Indemnity
Damages asserted against or incurred by UCI or any of the Transferees as a
result of any medical malpractice claim arising from prior to the Closing.
13.3 Provisions of General Application. With respect to any right of
indemnification arising under this Agreement, the following provisions shall
apply:
13.3.1 Procedures. The indemnified Party and the indemnifying
Party agree to cooperate in the defense of any third party claim or action
subject to this Section 13, to permit the cooperation and participation of the
other Parties in any such claim or action, and to promptly notify the other
Parties of the occurrence of any indemnified event or any material developments
or amounts due respecting any indemnification event.
13.3.2 No Implications. Neither the rights of any Party to
indemnification from another Party nor the obligations of any Party to indemnify
another Party, under this Agreement shall in any way imply or create, and each
Party specifically disclaims, any responsibility whatsoever by such Party for
any other Party's liabilities to any other person or entity or governmental
body.
13.3.3 Settlement. No settlement of an action covered by this
Section 13 shall be made without the prior written consent of UCI and
MainStreet, which consent shall not be unreasonably withheld or delayed;
provided however, that anything in this Agreement to the contrary
notwithstanding, (a) if there is a reasonable probability that a claim may
materially and adversely affect an indemnifying party other than as a result of
money damages or other money payments, the indemnifying party shall have the
right, at its own cost and expense, to compromise or settle such claim in any
reasonable manner, but (b) the indemnifying party shall not, without prior
written consent of the indemnified party, settle or compromise any claim or
consent to the entry of any judgment which does not include as an unconditional
term thereof the giving by the claimant or the plaintiff to the indemnified
party a release from all liability in respect of such
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Plan of Reorganization
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claim. In any event, all Parties hereto shall retain the right to participate in
the prosecution of any such actions, and the Party prosecuting such action shall
act reasonably and in accordance with good business judgment giving due
recognition to the interests of the other Parties to this Agreement.
13.3.4 Insurance. Prior to enforcing any claim for
indemnification against the indemnifying parties under this Agreement, the
indemnified parties shall administratively file in good faith with any insurers
all forms and submissions required by applicable policies for the proceeds or
other benefits of insurance coverage, if any, applicable to the claim or event
from which such indemnification right arose. In the event that insurance
proceeds are paid to the indemnified parties respecting an event to which an
indemnification right applies hereunder, such indemnification right shall apply
only to the extent that the amount of damages indemnified against exceeds such
insurance proceeds actually paid to the indemnified parties; provided however,
that: (a) such insurance proceeds shall not affect or be applied towards the
maximum liability established in Section 13.4 (b) below, and (b) shall not be a
condition precedent to asserting such indemnification claim under this
Agreement. If the indemnifying parties incur indemnity costs or pay indemnity
damages under this Agreement, and the indemnified parties subsequently receive
insurance proceeds for the same claim or event, then the indemnified parties
shall refund such indemnity costs or damage payments to the indemnifying parties
from such insurance proceeds to the extent that the indemnified party has
received benefits from both sources (i.e., payments of indemnity damages from
the indemnifying party and such insurance proceeds) in excess of the amount of
indemnity damages incurred by or asserted against the indemnified parties.
13.3.5 Cooperation. The Parties agree to cooperate fully with
each other in connection with the mitigation, defense, negotiation or settlement
of any such legal proceeding, claim or demand, and in any event, all Parties
shall retain the right to participate in the defense of any such legal
proceeding, claim or demand. Subject to rights of or duties to any insurer or
other third person having liability therefor, the indemnifying parties shall
have the right within fifteen (15) days after receipt of the notice described in
Section 13.3.1 to assume the control of the defense, compromise or settlement of
any such action, suit, proceeding, claim, liability, demand or assessment,
including at its own expense, employment of counsel; provided however, that if
the indemnifying parties shall have exercised their right to assume such
control, the indemnified party: (a) may, in its sole discretion and expense,
employ counsel to represent it (in addition to counsel employed by the
indemnifying parties) in any such matter, and in such event counsel selected by
the indemnifying parties shall be required to cooperate with such counsel of the
indemnified party in such defense, compromise or settlement for the purpose of
informing and sharing information with such indemnified party; and (b) shall, at
its own expense, make available to the indemnifying parties those employees of
the indemnified parties and their affiliates whose assistance, testimony or
presence is reasonably deemed by the indemnifying parties necessary or
beneficial to assist them in evaluating and defending any such action, suit,
proceeding, claim, liability, demand or assessment; provided further, however,
that any such access shall be
Acquisition Agreement and
Plan of Reorganization
Page 43
<PAGE>
conducted in such a manner as not to interfere unreasonably with the operations
of the businesses of the indemnified parties.
13.4 Limitations. Anything contained in this Agreement to the contrary
notwithstanding: (a) each indemnifying party hereunder shall not be liable for
any claim for indemnification asserted by an indemnified party or by any party
pursuant to any provision of this Agreement after the first (1st) anniversary
date of the Closing; (b) the Transferors and Class B Shareholders aggregate
liability to the Transferees, and the Transferees aggregate liability to the
Transferors and Class B Shareholders, for such indemnification claims under this
Agreement shall each not exceed Three Million and No/100 Dollars
($3,000,000.00); and (c) an indemnifying party shall not become liable for any
such indemnification claims under this Agreement unless and until the aggregate
of all such claims exceeds One Hundred Twenty-Five Thousand and No/100 Dollars
($125,000.00) in which event the indemnified party shall be entitled to
indemnification from the first dollar of loss, but then only up to the amount
limitation in Section 13.4(b) above in the aggregate. Notwithstanding the
foregoing, the limitations of Section 13.4 above shall apply to all claims for
indemnification under this Agreement except claims by any Transferee or UCI
related to any Indemnity Damages asserted or incurred by UCI or any of the
Transferees related to, or in connection with, any litigation or claim set forth
on Exhibit 9.14 attached hereto.
13.5 Ratable Percentages. Notwithstanding anything contained herein to
the contrary, whenever any claim for Indemnity Damages arises pursuant to
Sections 13.1.1 or 13.2 above, payment by the Class B Shareholders thereunder in
each and every case shall be made to the indemnified parties in the following
percentages:
Responsible Party Percentage of Responsibility
----------------- ----------------------------
Johnson 22.0%
PENMAN 78.0%
Riddett 0.0%
Dare 0.0%
In no event shall any Class B Shareholder be liable for Indemnity Damages with
respect to any individual claim hereunder in an amount in excess of the product
of multiplying: (i) such Class B Shareholder's Percentage of Responsibility set
forth opposite such Class B Shareholder's name above, by (ii) the aggregate
amount of such Indemnity Damages not paid by a Transferor. Nothing contained in
this Section 13.5 shall in any way be deemed to limit in any way the liability
of any Transferor hereunder.
13.6 Holdback.
13.6.1 Holdback Shares. At Closing, MainStreet for itself and
on behalf of Johnson shall be deemed to have directed UCI to withhold from
issuance to MainStreet such number of Shares having an aggregate value equal to
Three Hundred Thousand and No/100
Acquisition Agreement and
Plan of Reorganization
Page 44
<PAGE>
($300,000.00). The withheld Shares are herein referred to as the "Holdback
Shares." For all purposes of this Section 13.6, including the price per share
utilized for determination of the number of Holdback Shares, shall be the price
per share utilized in Section 7.1 above. The Parties hereto acknowledge and
agree that such Holdback Shares are intended to be a portion of such Shares
distributable to Johnson upon the ultimate liquidation or other distribution by
MainStreet. Until such distribution occurs, it is agreed that such Holdback
Shares shall be an asset of MainStreet and available to satisfy claims of UCI
and the Transferees against MainStreet under this Agreement. After such
distribution, any Holdback Shares held in escrow as of such date, shall be
deemed to be an asset of Johnson, and Johnson will receive the Holdback Shares
subject to the escrow. At Closing, the Holdback Shares shall be issued to
MainStreet but delivered to Nexsen Pruet Jacobs & Pollard, LLP ("Escrow Agent")
to be held in escrow along with the stock powers relating thereto executed by
MainStreet, subject to the terms and conditions hereinafter set forth. The
liability of Johnson under the indemnification provisions of this Section 13
shall be recovered at the indemnified party's sole discretion either from
Johnson individually, or following distribution to him, from such Holdback
Shares, or both. Such indemnified party shall not be required to make a claim
for any Holdback Shares prior to asserting a claim against Johnson individually.
As used in this Section 13.6, "J/MS" means MainStreet until the Holdback Shares
are distributed to Johnson, and Johnson thereafter.
13.6.2 Holdback Termination. The Holdback Shares shall be
distributed to J/MS as follows.
13.6.2.1 On the first anniversary of the date of
Closing, the Holdback Shares remaining in escrow shall be delivered to J/MS;
except that if any claims made pursuant to Sections 13.1.1 or 13.2 have not been
resolved as of such date, then the Holdback Shares equal to the amount of such
unresolved claims shall remain in escrow.
13.6.2.2 Any Holdback Shares not so distributed to
J/MS pursuant to the foregoing shall be retained in escrow until such claims are
resolved pursuant to Section 13.6.3 and 13.6.4 below.
13.6.3 Assertion of Claims Against Holdback. Subject to the
limitations set forth in Sections 13.4 and 13.5 above, if UCI or any Transferee
shall have any claim of indemnification against J/MS pursuant to Section 13
hereof, it shall promptly give written notice thereof to J/MS, including in such
notice a brief description of the facts upon which such claim or adjustment is
based and the amount thereof (the "Claim Notice"). Unless J/MS shall give
written notice, within twenty (20) days after receipt of the Claim Notice, to
UCI and the Escrow Agent objecting to the forfeiture of any Holdback Shares for
application to such claims, the lesser of (a) that number of the Holdback Shares
that is equal in value to the sum of the amount of claim or claims to be
satisfied, or (b) all the Holdback Shares, shall be forfeited to UCI. Such claim
or claims shall be deemed satisfied to the extent of such forfeiture.
Acquisition Agreement and
Plan of Reorganization
Page 45
<PAGE>
13.6.4 Resolution of Conflicts; Arbitration.
13.6.4.1 If J/MS gives such written objection to UCI
and the Escrow Agent, Escrow Agent shall continue to hold the Holdback Shares
until the rights of J/MS, on the one hand, and the indemnified party, on the
other hand, with respect thereto have been agreed upon between Johnson and the
indemnified party or until such rights are settled by arbitration or judicial
action.
13.6.4.2 J/MS and the indemnified party shall attempt
promptly and in good faith for a period of thirty (30) days to agree upon the
rights of the parties with respect to each of such claims. If J/MS and such
indemnified party should so agree, a memorandum setting forth such agreement
shall be prepared and signed by both parties and the Holdback Shares shall be
distributed or forfeited in accordance with the terms thereof.
13.6.4.3 If no such agreement can be reached after
such period of good faith negotiation, either the indemnified party or J/MS may
demand arbitration of the matter unless the amount of the damage or loss is at
issue in pending litigation with a third party, in which event arbitration shall
not be commenced until such amount is ascertained or both parties agree to
arbitration; and in any such event the matter shall be settled by arbitration
conducted by three arbitrators. The indemnified party shall select one
arbitrator and J/MS shall select another arbitrator, and the two arbitrators so
selected shall select a third arbitrator. The decision of the arbitrators as to
the validity and amount of any claim in such Claim Notice shall be binding and
conclusive upon the Parties. Judgment upon any award rendered by the arbitrators
may be entered in any court having jurisdiction. Any such arbitration shall be
held in Columbia, South Carolina. Any such arbitration shall be conducted under
the rules then in effect of the American Arbitration Association, and shall be
based on the provisions and limitations of this Section 13. The non-prevailing
party shall pay all costs and expenses of the prevailing party in connection
with any such arbitration.
13.7 Exclusive Remedies. Anything contained in this Agreement to the
contrary notwithstanding, the indemnification rights set forth in this Section
13, all of which are subject to the terms, limitations, and restrictions of this
Article 13, shall be the exclusive remedy for monetary damages sustained as a
result of a breach of a representation, warranty, covenant, or agreement under
this Agreement. Such limitations set forth in this Section 13 shall not impair
the rights of any of the parties: (a) to seek non-monetary equitable relief,
including (without limitation) specific performance or injunctive relief to
redress any default or breach of this Agreement; or (b) to seek enforcement,
collection, damages, or such non-monetary equitable relief to redress any
default or breach of any Non-Solicits to be delivered at Closing hereunder. In
connection with the seeking of any non-monetary equitable relief, each of the
Parties acknowledges and agrees that the other Parties hereto would be damaged
irreparably in the event any of the provisions of this Agreement are not
performed in accordance with their specific terms or otherwise are breached.
Acquisition Agreement and
Plan of Reorganization
Page 46
<PAGE>
13.8 Cross Default.
13.8.1 Transferees and UCI. Notwithstanding anything contained
herein to the contrary, in the event UCI or any of the Transferees breach this
Agreement 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 UCI and each of the Transferees of
this Agreement.
13.8.2 Transferors and Class B Shareholders. Notwithstanding
anything contained herein to the contrary but subject to Section 13.5, in the
event any of the Transferors and/or any of the Class B Shareholders breach this
Agreement or any other agreement or instrument ancillary hereto (other than a
Non-Solicit or any Investment Letter) 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 each of the Transferors and Class B Shareholders of
this Agreement.
14. EXISTING LIABILITIES. Except as specifically set forth in Section 7.2 above,
neither UCI nor any of the Transferees assumes any, and hereby expressly
disclaims all, obligations or liabilities of each of the Transferors, 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 Closing, except for the obligations arising and
maturing after the date of Closing to perform under those liabilities expressly
assumed by UCI of GA hereunder. All property taxes assessed against the Assets
sold hereby shall be prorated as of the date of Closing, and each of the
Transferors shall jointly and severally promptly pay when due, or reimburse
Transferees for, all such taxes which remain any of the Transferors'
responsibility.
15. RISK OF LOSS. In the event the Assets or any substantial part thereof shall
be damaged or destroyed prior to the date of Closing 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,
each of the Transferors shall promptly notify UCI of GA that such damage,
destruction, or action has occurred and the estimated extent thereof. In the
event of such damage, destruction, condemnation or eminent domain, UCI of GA
must within five (5) days of receipt of such notice either:
15.1 Termination. Terminate this Agreement by giving Transferors
written notice of such termination and thereupon all parties shall be released
of all further liability to the others; or
15.2 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 GA to terminate this Agreement), all proceeds of insurance covering
Acquisition Agreement and
Plan of Reorganization
Page 47
<PAGE>
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 GA. In the
event UCI of GA elects to require the consummation of the transactions
contemplated herein, neither Transferor shall compromise or settle any such
claim or action at any time without the written consent of UCI of GA which shall
not be unreasonably withheld. Each Transferor shall cooperate with the
collection of such amounts. Further, in such event, the representations and
warranties of the Transferors and the Class B Shareholders, as set forth herein
shall be modified equitably to account for such claim or action.
16. MISCELLANEOUS.
16.1 Termination.
16.1.1 This Agreement constitutes the binding and irrevocable
agreement of the Parties to consummate the transactions contemplated hereby, the
consideration for which is comprised of the covenants set forth herein and the
expenditures and obligations incurred and to be incurred by the Parties in
respect of this Agreement, and this Agreement may be terminated or abandoned
only as follows:
16.1.1.1 By UCI of GA and MainStreet. This Agreement
may be terminated without liability upon the mutual written consent of
UCI of GA and MainStreet.
16.1.1.2 By UCI of GA. In the event that Closing has
not been completed by April 15, 1998 as a result of the
non-satisfaction or non-fulfillment in any material respect of any of
the conditions upon Transferees' obligations specified in Section 11.1
(which had not been previously waived by Transferees), then UCI of GA
shall be entitled at its option to terminate this Agreement by notice
to the other Parties; provided however, that UCI of GA shall not be
entitled to terminate this Agreement if the non-satisfaction or
non-fulfillment of any such condition resulted from or was proximately
caused by UCI or any Transferee's breach of this Agreement or was
frustrated or made impossible by the wrongful act or failure to act of
UCI or any Transferee.
16.1.1.3 By MainStreet. In the event that Closing has
not been completed by April 15, 1998 as a result of the non-fulfillment
or non-satisfaction in any material respect of any of the conditions
upon Transferors' obligations specified in Section 11.2 (which had not
been previously waived by Transferors), then MainStreet shall be
entitled at its option to terminate this Agreement by notice to the
other Parties; provided however, that MainStreet shall not be entitled
to terminate this Agreement if the non-satisfaction or non-fulfillment
of any such condition resulted from or was proximately caused by any
Class B Shareholder or Transferor's breach of this Agreement or was
frustrated or made impossible by the wrongful act or failure to act of
any Class B Shareholder or Transferor.
Acquisition Agreement and
Plan of Reorganization
Page 48
<PAGE>
16.1.2 Effect on Agreement. In the event of termination of
this Agreement pursuant Section 16.1.1.1 above, this Agreement shall forthwith
become void, the transactions contemplated hereby shall be abandoned and there
shall be no liability or obligation on the part of the Transferors, Transferees
or Class B Shareholders or their respective officers, directors or partners. In
the event of termination of this Agreement pursuant Sections 16.1.1.2 or
16.1.1.3 above: (a) the Transferors and Class B Shareholders' exclusive remedy
for UCI or any Transferee's breach of this Agreement, or wrongful act or failure
to act by UCI or any Transferee, which was the cause for such termination of the
Agreement shall be pursuant to Section 13 above; and (b) UCI and each
Transferees' exclusive remedy for any breach of this Agreement by any Transferor
or Class B Shareholder, or wrongful act or failure to act by any Transferor or
Class B Shareholder, which was the cause for such termination of the Agreement
shall be pursuant to Section 13 above, and the terms and conditions set forth
therein.
16.1.3 Return of Documents. Upon termination of this Agreement
pursuant to Section 16.1.1 above, each Party, if so requested by any other
Party, will return promptly every document furnished to it by or on behalf of
the other Party in connection with the transaction contemplated hereby, whether
so obtained before or after the execution of this Agreement, and any copies
thereof (except for copies of documents publicly available) which may have been
made, and will use reasonable efforts to cause its representatives and any
representatives of financial institutions and others to whom such documents were
furnished promptly to return such documents and any copies of thereof any of
them may have been made.
16.2 Entire Agreement. This Agreement, including the exhibits and
schedules attached 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.
16.3 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.
16.4 Survival. All representations, warranties, covenants, and
agreements herein contained shall survive the Closing hereunder; except that the
representations and warranties contained in Sections 9 and 10 shall terminate as
of the first (1st) anniversary date of the Closing.
16.5 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.
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Plan of Reorganization
Page 49
<PAGE>
16.6 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 of GA: UCI Medical Affiliates of
--------- Georgia, Inc.
1901 Main Street, Suite 1200
Columbia, SC 29201
Attn.: Jerry F. Wells
with copy to: Julian Hennig III, Esquire
Nexsen Pruet Jacobs & Pollard, LLP
P.O. Drawer 2426
Columbia, SC 29202
UCI: UCI Medical Affiliates, Inc.
--- 1901 Main Street, Suite 1200
Columbia, SC 29201
Attn.: Jerry F. Wells
with copy to: Julian Hennig III, Esquire
Nexsen Pruet Jacobs & Pollard, LLP
P.O. Drawer 2426
Columbia, SC 29202
MainStreet: MainStreet Healthcare Corporation
---------- 2370 Main Street
Tucker, Georgia 30084
Attn: A. Wayne Johnson
with copy to: Sheldon E. Friedman, Esquire
S. Friedman & Associates, P.C.
1050 Crown Pointe Parkway
Suite 1550
Atlanta, GA 30338
MHMG-GA: MainStreet Healthcare Medical Group, P.C.
------- 2370 Main Street
Tucker, Georgia 30084
Attn: A. Wayne Johnson
Acquisition Agreement and
Plan of Reorganization
Page 50
<PAGE>
with copy to: Sheldon E. Friedman, Esquire
S. Friedman & Associates, P.C.
1050 Crown Pointe Parkway
Suite 1550
Atlanta, GA 30338
MHMG-TN: MainStreet Healthcare Medical Group, PC
------- 2370 Main Street
Tucker, Georgia 30084
Attn: A. Wayne Johnson
with copy to: Sheldon E. Friedman, Esquire
S. Friedman & Associates, P.C.
1050 Crown Pointe Parkway
Suite 1550
Atlanta, GA 30338
Prompt Care: Prompt Care Medical Center, Inc.
----------- 2370 Main Street
Tucker, Georgia 30084
Attn: A. Wayne Johnson
with copy to: Sheldon E. Friedman, Esquire
S. Friedman & Associates, P.C.
1050 Crown Pointe Parkway
Suite 1550
Atlanta, GA 30338
Dare: Michael J. Dare
---- 2370 Main Street
Tucker, Georgia 30084
with copy to: Sheldon E. Friedman, Esquire
S. Friedman & Associates, P.C.
1050 Crown Pointe Parkway
Suite 1550
Atlanta, GA 30338
Johnson: A. Wayne Johnson
------- 2370 Main Street
Tucker, Georgia 30084
Acquisition Agreement and
Plan of Reorganization
Page 51
<PAGE>
with copy to: Sheldon E. Friedman, Esquire
S. Friedman & Associates, P.C.
1050 Crown Pointe Parkway
Suite 1550
Atlanta, GA 30338
PENMAN: PENMAN Private Equity and Mezzanine
------ Fund, L.P.
333 West Wacker Drive
Suite 510
Chicago, IL 60606
Attn: Kelvin J. Pennington
with copy to: Mark D. Schindel
333 West Wacker Drive
Suite 510
Chicago, IL 60606
with additional
copy to: Mark Kindelin, Esquire
Altheimer & Gray
10 South Wacker Drive
Chicago, IL 60606
Riddett: Robert G. Riddett, Jr.
------- 2370 Main Street
Tucker, Georgia 30084
with copy to: Sheldon E. Friedman, Esquire
S. Friedman & Associates, P.C.
1050 Crown Pointe Parkway
Suite 1550
Atlanta, GA 30338
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)
three (3) business days after being duly deposited in the United States mail,
certified, return receipt requested.
16.7 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
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Plan of Reorganization
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<PAGE>
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
16.8 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.
16.9 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.
16.10 Choice of Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of South Carolina.
16.11 Venue and Jurisdiction. The Parties hereto hereby (i) agree that
any litigation, action or proceeding arising out of or relating to this
Agreement shall be instituted in a state or federal court in the City and State
of Columbia, South Carolina, (ii) waive any objection which it might have now or
hereafter to any such litigation, action or proceeding based upon improper venue
or inconvenient forum, and (iii) irrevocably submit to the jurisdiction of such
courts in any such litigation, action or proceeding.
16.12 No Trading of UCI Common Stock. Each of the Transferors and the
Class B Shareholders hereby agrees not to buy or sell the common stock of UCI
from the date hereof until the earlier of: (a) the date of Closing, or (b) the
lawful termination of this Agreement.
16.13 Third Parties. The provisions of this Agreement are not intended
to be for the benefit of any third parties other than Doctor's Care of TN and
Doctor's Care of GA, and no third party shall be deemed to have any privity of
contract with any of the Parties hereto by virtue of this Agreement other than
Doctor's Care of TN and Doctor's Care of GA.
16.14 Time of Essence. The Parties acknowledge and agree that time is
of the essence in the performance of this Agreement.
16.15 Cumulative Remedies. All rights and remedies of a Party hereunder
shall be cumulative and in addition to such rights and remedies as may be
available to a Party at law or equity.
16.16 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.
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Plan of Reorganization
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<PAGE>
16.17 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.
16.18 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.
16.19 Assignment. This Agreement is not assignable by any Party without
the prior written consent of the other Party(ies) hereto; except that upon
notice to MainStreet, any of the Transferees shall be entitled to assign its
right to receive title to its portion of the Assets hereunder to a corporation
or partnership controlled by, under common control with, or controlling, such
Transferee; provided that upon such assignment the assignee shall become bound
by and subject to this Agreement, such Transferee shall not be released from any
term, condition, or covenant of this Agreement, and the relevant instruments,
certificates, opinions, and documents to be delivered at Closing hereunder shall
be modified to accommodate such assignment.
[SIGNATURE PAGE ATTACHED]
Acquisition Agreement and
Plan of Reorganization
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Acquisition
Agreement and Plan of Reorganization under seal with the corporate parties
acting by and through their duly authorized officers, effective as of the date
first above written.
UCI MEDICAL AFFILIATES, INC. MAINSTREET HEALTHCARE CORPORATION
By: /s/ Jerry F. Wells, Jr. By: /s/ Robert G. Riddett, Jr.
----------------------- --------------------------
Its: Executive Vice President and Its: President
Chief Financial Officer
UCI MEDICAL AFFILIATES OF GEORGIA MAINSTREET HEALTHCARE
INC. MEDICAL GROUP, P.C., a Georgia
corporation
By: /s/ Jerry F. Wells, Jr. By: /s/ Pamela K. Erdman, M.D.
----------------------- --------------------------
Its: Executive Vice President and Its: President
Chief Financial Officer
PENMAN PRIVATE EQUITY AND MAINSTREET HEALTHCARE
MEZZANINE FUND, L.P. MEDICAL GROUP, PC, a Tennessee
corporation
By: PENMAN Asset Management, L.P.
Its: General Partner
By: /s/ A. Wayne Johnson
--------------------
By: /s/ Kelvin S. Pennington Its: Chairman and Secretary
------------------------
Kelvin J. Pennington
Its: General Partner PROMPT CARE MEDICAL CENTER, INC.
By: /s/ A. Wayne Johnson
--------------------
/s/ Robert G. Riddett, Jr. Its: Chairman and Secretary
- ------------------------------
Robert G. Riddett, Jr.
/s/ Michael J. Dare
- ------------------------------
Michael J. Dare
/s/ A. Wayne Johnson
- ------------------------------
A. Wayne Johnson
Acquisition Agreement and
Plan of Reorganization
Page 55
<PAGE>
INDEX OF EXHIBITS
Exhibit 1.19 Addresses of Georgia Facilities
Exhibit 1.49 Addresses of Tennessee Facilities
Exhibit 2.1 List of MainStreet Assets
Exhibit 2.2 List of MainStreet Excluded Assets
Exhibit 3.2 List of MHMG-GA Excluded Assets
Exhibit 4.2 List of MHMG-TN Excluded Assets
Exhibit 7.2.1(a) List of MainStreet Equipment Leases
Exhibit 7.2.1(b) List of MainStreet Real Estate Leases
Exhibit 8.3.1 MainStreet Bill of Sale
Exhibit 8.3.2 MainStreet Assignment and Assumption
Exhibit 8.3.3 MHMG-GA Bill of Sale
Exhibit 8.3.4 MHMG-GA Assignment and Assumption
Exhibit 8.3.5 MHMG-TN Bill of Sale
Exhibit 8.3.6 MHMG-TN Assignment and Assumption
Exhibit 8.3.7 Form of Non-Solicits
Exhibit 8.3.8 Form of Investment Letter
Exhibit 8.3.18 Form of Affidavit and Certificate of Assumed Liabilities
Exhibit 8.3.19 Form of Transferor's Officers Certificate
Exhibit 8.3.20 Form of Legal Opinion of Transferors' and Class B
Shareholders' Counsel
Exhibit 8.3.21 Form of Lease
Exhibit 8.3.23 Certified List of MainStreet Security Holders
Exhibit 8.4.2 Form of Registration Rights Agreement
Exhibit 8.4.3 Form of Transferees' Officers Certificate
Exhibit 8.4.4 Form of Legal Opinion of Transferees' Counsel
Exhibit 9.6 Security holders of MainStreet
Exhibit 9.10 Financial Statements
Exhibit 9.18.1 Employee Benefit Plans
Exhibit 9.19.1 Insurance
Exhibit 9.20 List of Directors, Officers and Employees of each
Transferor
Acquisition Agreement and
Plan of Reorganization
Page 56
Exhibit 1.19
Addresses of Georgia Facilities
1. Post Office Box 1135
12 Seventh Street
Auburn, GA 30011
2. 1678-A Mulkey Road
Austell, GA 30106
3. Post Office Box 81246
1491 Old Salem Road
Conyers, GA 30013
4. 4168 Tate Street
Covington, GA 30014
5. 719 Scenic Hwy, SW
Lawrenceville, GA 30046
6. 5014 Snapfinger Woods Drive
Decatur, GA 30035
7. 2270 Oak Road
Snellville, GA 30078
8. 1324 Rockbridge Road
Stone Mountain, GA 30087
9. 2362 Main Street
Tucker, GA 30084
Exhibit 1.49
Addresses of Tennessee Facilities
1. 10412 Kingston Pike
Knoxville, TN 37922
2. 180-B West Inskip Drive
Knoxville, TN 37912
Exhibit 2.1
List of MainStreet Assets
[See Attached]
<PAGE>
EXHIBIT 2.1
MAINSTREET ASSETS
Asset Account: Location: Cost:
- -------------- --------- -----
Building Improvements Tucker 195,667
Covington 3,967
Lawrenceville 19,658
Valdosta 3,275
Knoxville 10,774
Austell 5,542
Snellville 7,763
Conyers 10,141
Snapfinger 5,358
--------
262,146
Furniture & Fixtures Tucker 17,701
Stone Mountain 445
Lawrenceville 4,581
Valdosta 763
Knoxville 2,032
Austell 51,450
Snellville 58,734
Auburn 2,000
Macon 315
Snapfinger 22,900
-------
160,920
Clinic Equipment Tucker 119,372
Stone Mountain 41,935
Covington 78,684
Lawrenceville 130,654
Valdosta 17,000
Knoxville 61,663
Austell 51,216
Snellville 106,829
Macon 26,386
Snapfinger 60,247
Ultrasound 58,000
-------
751,986
<PAGE>
EXHIBIT 2.1
MAINSTREET ASSETS
(CONTINUED)
Signage Tucker 2,088
Stone Mountain 570
Covington 3,062
Lawrenceville 1,886
Valdosta 2,617
Knoxville 5,011
Austell 318
Snellville 132
Conyers 1,810
------
17,495
Office Equipment Tucker 589
Covington 228
Valdosta 800
Austell 3,004
------
4,620
Computers Various 76,041
Tucker 2,489
Stone Mountain 1,781
Lawrenceville 169
Valdosta 5,051
Austell 2,141
------
87,672
Computer Software Various 94,150
Leasehold Improvements Tucker 928
Covington 2,700
Lawrenceville 7,620
Austell 2,042
Snellville 37,449
Conyers 2,927
Snapfinger 425
-------
54,091
Total Included Assets 1,433,080
=========
Exhibit 2.2
-----------
<PAGE>
List of MainStreet Excluded Assets
1. Cash and cash accounts located in corporate checking accounts and petty
cash funds located in practices (other than the hold-back accounts
associated with MainStreet's credit obligations with Bank One. L.P.
(formerly NPL-LP, Inc.));
2. Accounts receivable from employees of Transferors;
3. Real property located at 2362 Main Street, Tucker, Georgia;
4. Furniture, fixtures, equipment, and software used at 2370 Main Street,
Tucker, Georgia (the "Headquarters");
5. Any lease for the use of the Headquarters;
6. Ford Motor Company leases (Ford 150 Truck & Ford 250 Van).
Exhibit 3.2
List of MHMG-GA Excluded Assets
None.
Exhibit 4.2
List of MHMG-TN Excluded Assets
None.
Exhibit 7.2(a)
List of MainStreet Equipment Leases
[See Attached]
<PAGE>
EXHIBIT 7.2(A)
LIST OF MAINSTREET
EQUIPMENT LEASES
CAPITAL LEASES:
<TABLE>
<CAPTION>
TOTAL
ORIGINAL LEASE MONTH MONTH
LESSOR: LOCATION: EQUIPMENT: COST: PAYMENTS: STARTED ENDING
- ------- --------- ---------- ----- --------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
BB&T LEASING CORPORATION Tucker XMA X-Ray System 18,600.00 24,180.48 Dec-96 Nov-00
P.O. Box 400
Asheville, NC 28802
AFFILIATED CAPITAL Snellville Matrix Pro-Elecdt 20,145.00 22,042.08 Jun-97 May-00
Finance Administration
P.O. Box 1207
Northbrook, IL 60065
MICHAEL DARE Lawrenceville Matrix Pro-Elecdt 20,145.00 20,145.00 Aug-97 Mar-99
4704 Lavista Rd
Tucker, GA 30084
ROBERT RIDDETT Snapfinger Matrix Pro-Elecdt 23,650.00 23,650.00 Aug-97 Jul-99
51 Hanarry Dr.
Lawrenceville, GA 30045
BELL SOUTH FINANCIAL SERV Snapfinger Norstar Tele System 10,726.18 Feb-95 Jan-99
P.O. Box 105679
Atlanta, GA 30348
STATE BANK OF SOUTH ORANGE Snapfinger Biomedics EKG Syst 16,922.00 26,447.00 Jun-97 Oct.01
Valley & Third Street
South Orange, NJ 07079
COPELCO CAPITAL Mobile BioSound AU3 System 58,000.00 68,381.00 May-97 Apr-02
700 East Gate Drive
Mt. Laurel, NJ 08054
AFFILIATED CAPITAL Snapfinger Neurometer CPT Sys 11,545.00 11,298.96 Jun-97 May-00
Finance Administration
P.O. Box 1207
Northbrook, IL 60065
</TABLE>
<PAGE>
EXHIBIT 7.2(A) CONTINUED
LIST OF MAINSTREET
EQUIPMENT LEASES
OPERATING LEASES:
<TABLE>
<CAPTION>
Month
Lessor: Location: Equipment: Ending Lessee
- ------ -------- --------- ------ ------
<S> <C> <C> <C> <C>
COPELCO CAPITAL Tucker (3) QBC Autoread May-01 MainStreet Healthcare
700 East Gate Drive Lawrenceville
Mt. Laurel, NJ 0054 Covington
PITNEY BOWES Tucker (7) Meter Equipment Jun-01 MainStreet Healthcare
CREDIT Stone Mountain
P.O. Box 85460 Covington
Louisville, KY Lawrenceville
40285 Knoxville (n)
Knoxville (w)
Austell
IKON CAPITAL Headquarters (4) Sharp Copiers Feb-00 MainStreet Healthcare
1738 Bass Road Tucker
Macon, GA 31210 Lawrenceville
Covington
SYMRNA BANK & Austell Computer System Sept-98 MainStreet Healthcare
TRUST
P.O. Box 813000
Smyrna, GA 30080
COPELCO CAPITAL Snapfinger Copier Sept-98 MainStreet Healthcare
700 East Gate Drive
Mt. Laurel, NJ
08054
EASTSIDE BANK Snellville Various F,F,E Nov-01 MainStreet Healthcare
P.O. Box 549
Snellville, GA 30278
FORT MOTOR CREDIT Mobile 1996 Ford Van Jun-98 MainStreet Healthcare
P.O. Box 105332
Atlanta, GA 30353
</TABLE>
Exhibit 7.2(b)
List of MainStreet Real Estate Leases
[See Attached]
<PAGE>
EXHIBIT 7.2(B)
LIST OF MAINSTREET
REAL ESTATE LEASES
<TABLE>
<CAPTION>
(4/98-3/99) (4/99-3/00)
Predicated Predicated (4/00-3/01)
Month Month Type of FY 1999 FY 2000 Predicated FY
Practice Location # Lessor Started Ending Lease Expense Exense 2001 Expenses
- ----------------- - ------ ------- ------ ----- ------- ------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Tucker 002 MainStreet Healthcare Apr-96 Mar-05 Standard 48,068.88 48,068.88 48,068.88
2352 Main Street 2370 Main Street
Tucker, GA 30084 Tucker, GA 30084
Stone Mountain 003 Dr. Harold Holloway May-96 Apr-01 Standard 34,733.16 34,733.16 34,733.16
1324 Rockbridge Rd 130 Mockingbird Dr.
Stone Mt., GA Amercus, GA 31709
30087
Covington 004 Dr. Edward R. Bailey Apr-96 Mar-01 Standard 36,000.00 36,000.00 36,000.00
4168 Tate Street 1840 Ridgemill Terr
Covington, GA Dacula, GA 30211
30209
Lawrenceville 005 Dr. M.T. Bagheri Nov-97 Oct-99 Standard 30,557.85 16,334.61 n/a
719 Scenic Hwy 719 Scenic Hwy
Suite B & C Suite A
Lawrenceville, GA Lawrenceville, Ga
30045 30045
Knoxville (West) 007 Lay Properties Dec-96 Nov-01 Standard 91,006.00 91,006.00 91,006.00
10412 Kingston Pike 1463 N Campbell
Knoxville, TN Start Rd.
37912 Knoxville, TN 37932
Knoxville (North) 007 Lay Properties Dec-96 Nov-01 Standard 54,000.00 54,000.00 54,000.00
108B Inskip Drive 1453 N Campbell
Knoxville, TN Start Rd
37912 Knoxville, TN 37932
Austell 008 BAC Properties Jan-97 Dec-01 Standard 54,000.00 54,000.00 54,000.00
1678 Mulkey Road 1676 Mulkey Road
Suites A&B Suite D
Austell, GA 30001 Austell, GA 30001
Snellville 010 Robert Robinson Jan-97 Dec-02 Sublease 58,710.00 58,710.00 58,710.00
2270 Oak Road P.O. Box 6279
Snellville, GA Fernandina Beach, FL
30278 32035
Conyers 011 Dr. Ellis/Petit Jan-97 Dec-02 Sublease 54,000.00 54,000.00 54,000.00
1491 Old Salem Rd Partnership
Conyers, GA 30208 535 Cooper Road
Loganville, GA 30052
Auburn 012 Columbia Barrow Jan-98 Dec-98 Standard 8,937.00 n/a n/a
12 Seventh Street Med Ctr.
Auburn, GA 30203 316 North Broad St
Winder, GA 30680
Snapfinger 014 Mildred L. Davis Mar-97 Monthly Standard 1,100.00 n/a n/a
6014 Snapfinger 3551 Knotsberry Lane (Per Month)
Woods Duluth, GA 30135
Decatur, GA 30035
Univ. Diagnostics 015 Dr. Robert F. Eaves Apr-95 Annual Sublease 12,000.00 n/a n/a
2390 Main Street 5394 Leather Stking
Tucker, GA 30084 Lane
Stone Mtn. GA 30087
</TABLE>
EXHIBIT 7.2(B)
LIST OF MAINSTREET
REAL ESTATE LEASES
(CONTINUED)
(4/01-3/02) (4/02-Forward)
Predicated FY Future
Practice Location # Lessor 2002 Expenses Obligation)
- ----------------- - ------ ------------- -----------
Tucker 002 MainStreet Healthcare 48,068.88 192,275.52
2352 Main Street 2370 Main Street
Tucker, GA 30084 Tucker, GA 30084
Stone Mountain 003 Dr. Harold Holloway 2,894.43 n/a
1324 Rockbridge Rd 130 Mockingbird Dr.
Stone Mt., GA Amercus, GA 31709
30087
Covington 004 Dr. Edward R. Bailey n/a n/a
4168 Tate Street 1840 Ridgemill Terr
Covington, GA Dacula, GA 30211
30209
Lawrenceville 005 Dr. M.T. Bagheri n/a n/a
719 Scenic Hwy 719 Scenic Hwy
Suite B & C Suite A
Lawrenceville, GA Lawrenceville, Ga
30045 30045
Knoxville (West) 007 Lay Properties 60,672.00 n/a
10412 Kingston Pike 1463 N Campbell
Knoxville, TN Start Rd.
37912 Knoxville, TN 37932
Knoxville (North) 007 Lay Properties 36,000.00 n/a
108B Inskip Drive 1453 N Campbell
Knoxville, TN Start Rd
37912 Knoxville, TN 37932
Austell 008 BAC Properties 54,000.00 n/a
1678 Mulkey Road 1676 Mulkey Road
Suites A&B Suite D
Austell, GA 30001 Austell, GA 30001
Snellville 010 Robert Robinson 58,710.00 44,032.50
2270 Oak Road P.O. Box 6279
Snellville, GA Fernandina Beach, FL
30278 32035
Conyers 011 Dr. Ellis/Petit 54,000.00 40,500.00
1491 Old Salem Rd Partnership
Conyers, GA 30208 535 Cooper Road
Loganville, GA 30052
Auburn 012 Columbia Barrow n/a n/a
12 Seventh Street Med Ctr.
Auburn, GA 30203 316 North Broad St
Winder, GA 30680
Snapfinger 014 Mildred L. Davis n/a n/a
6014 Snapfinger 3551 Knotsberry Lane
Woods Duluth, GA 30135
Decatur, GA 30035
Univ. Diagnostics 015 Dr. Robert F. Eaves n/a n/a
2390 Main Street 5394 Leather Stking
Tucker, GA 30084 Lane
Stone Mtn. GA 30087
Exhibit 8.3.1
MainStreet Bill of Sale
[See Attached]
<PAGE>
BILL OF SALE
(MainStreet Healthcare Corporation, a Delaware corporation)
KNOW ALL MEN BY THESE PRESENTS, that MAINSTREET HEALTHCARE
CORPORATION, a Delaware corporation, with its principal office at 2370 Main
Street, Tucker, Georgia (the "Seller"), for the consideration paid by UCI
MEDICAL AFFILIATES OF GEORGIA, INC., a South Carolina corporation with offices
at 1901 Main Street, Suite 1200, Columbia, South Carolina 29201 (the "Buyer")
set forth in that certain Acquisition Agreement and Plan of Reorganization dated
as of February 9, 1998, by and between among others Seller; Buyer; UCI Medical
Affiliates, Inc., a Delaware corporation; MainStreet Healthcare Medical Group,
P.C., a Georgia professional corporation; MainStreet Healthcare Medical Group,
PC, a Tennessee professional corporation; Prompt Care Medical Center, Inc., a
Georgia corporation; Michael J. Dare; A. Wayne Johnson; PENMAN Private Equity
and Mezzanine Fund, L.P., a Delaware limited partnership; and Robert G. Riddett,
Jr. (the "Agreement"), the receipt and sufficiency whereof is hereby
acknowledged, has bargained and sold and by these presents does sell, assign and
transfer unto Buyer all of Seller's right, title and interest in and to, all the
MainStreet Assets described in the Agreement, all as provided in the Agreement.
TO HAVE AND TO HOLD the same unto Buyer, its successors and assigns,
forever. AND Seller does for itself and its successors and assigns, covenant and
agree to and with Buyer, its successors and assigns, to warrant and defend the
sale and conveyance of the aforesaid assets hereby sold unto Buyer.
This Bill of Sale is made, executed and delivered pursuant to the
Agreement, and is subject to all of the terms, provisions, and conditions
thereof, including (without limitation) the indemnification therein. To the
extent of any conflict between the terms hereof and thereof, the terms of the
Agreement shall be controlling.
All capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Agreement unless the context clearly requires
otherwise.
IN WITNESS WHEREOF, Seller has duly executed this Bill of Sale to be
effective as of 11:59 p.m. on the 31st day of March, 1998.
IN THE PRESENCE OF: MAINSTREET HEALTHCARE CORPORATION, a
Delaware corporation
(CORPORATE SEAL)
__________________________ By:_________________________________________
(Witness) Its:_______________________________________
__________________________
(Witness)
<PAGE>
____________________________ )
STATE OF ) PROBATE
____________________________ )
COUNTY OF
PERSONALLY APPEARED before me the undersigned witness who, after first
being duly sworn, deposes and says that s/he saw the within named MAINSTREET
HEALTHCARE CORORATION, a Delaware corporation, by__________________________, its
______________________, sign, seal and, as its act and deed, deliver the within
written Bill of Sale for the uses and purposes therein mentioned and that s/he
with the other witness whose signature appears above, witnessed the execution
thereof.
____________________________
Witness
SWORN to before me this_________
day of____________________________________, 1998.
______________________________________________(L.S.)
Notary Public for___________________________________
My Commission Expires:_________________
Exhibit 8.3.2
MainStreet Assignment and Assumption
[See Attached]
<PAGE>
ASSIGNMENT AND ASSUMPTION AGREEMENT
(MainStreet Healthcare Corporation, a Delaware corporation)
KNOW ALL MEN, that MAINSTREET HEALTHCARE CORPORATION, a Delaware
corporation with its principal office at 2370 Main Street, Tucker, Georgia (the
"Assignor"), for and in consideration of good and valuable consideration to it
in hand paid at or before the ensealing and delivery of these presents, by UCI
MEDICAL AFFILIATES OF GEORGIA, INC., a South Carolina corporation ("Assignee"),
the receipt and sufficiency whereof is hereby acknowledged, hereby assigns to
Assignee all of Assignor's right, title and interest in and to all the
intangible assets and rights composing portions of the MainStreet Assets as
described in the Acquisition Agreement and Plan of Reorganization dated
effective as of February 9, 1998, by and between Assignor; Assignee; UCI Medical
Affiliates, Inc., a Delaware corporation; MainStreet Healthcare Medical Group,
PC, a Tennessee professional corporation; MainStreet Healthcare Medical Group,
P.C., a Georgia professional corporation; Prompt Care Medical Center, Inc., a
Georgia corporation; Michael J. Dare; A. Wayne Johnson; PENMAN Private Equity
and Mezzanine Fund, L.P., a Delaware limited partnership; and Robert G. Riddett,
Jr. (the "Agreement"), all as provided in the Agreement.
Assignee hereby covenants with Assignor to assume and faithfully
perform and discharge all of the terms, covenants, liabilities and obligations
set forth on Schedule 1 attached hereto (subject to the Agreement) maturing and
to be performed or discharged by Assignor, if any, under the above assigned
contracts beginning on the date hereof and henceforth.
This Assignment is made, executed, and delivered pursuant to the
Agreement, and is subject to all the terms, provisions and conditions thereof,
including (without limitation) the mutual indemnifications therein. To the
extent of any conflict between the terms hereof and thereof, the terms of the
Agreement shall be controlling. All capitalized terms not otherwise defined
herein shall have the meanings ascribed to them in the Agreement unless the
context clearly requires otherwise.
[SIGNATURE PAGE ATTACHED]
ASSIGNMENT AND ASSUMPTION AGREEMENT
PAGE 1
<PAGE>
IN WITNESS WHEREOF, the parties have duly executed this Assignment and
Assumption Agreement to be effective as of the 31st day of March, 1998.
ASSIGNOR:
---------
IN THE PRESENCE OF: MAINSTREET HEALTHCARE CORPORATION, a
Delaware corporation
(CORPORATE SEAL)
_______________________ By:_________________________________________
(Witness) Its:_______________________________________
_______________________
(Witness)
ASSIGNEE:
---------
UCI MEDICAL AFFILIATES OF GEORGIA, INC.,
a South Carolina corporation
_______________________
(Witness)
By:_________________________________________
Its:_______________________________________
_______________________
(Witness)
ASSIGNMENT AND ASSUMPTION AGREEMENT
PAGE 2
<PAGE>
SCHEDULE 1
LIABILITIES TO BE ASSUMED
1. MainStreet Equipment Leases (as defined in the Agreement);
2. MainStreet Real Estate Leases (as defined in the Agreement); and
3. that certain line of credit obligation with Bank One, N.A. (formerly
NPL-LP, Inc.),
All as set forth in that certain Asset Purchase Agreement and Plan of
Reorganization dated as of February 9, 1998.
ASSIGNMENT AND ASSUMPTION AGREEMENT
PAGE 3
Exhibit 8.3.3
MHMG-GA Bill of Sale
[See Attached]
<PAGE>
BILL OF SALE
(MainStreet Healthcare Medical Group, P.C., a Georgia professional corporation)
KNOW ALL MEN BY THESE PRESENTS, that MAINSTREET HEALTHCARE MEDICAL
GROUP, P.C., a Georgia professional corporation, with its principal office at
2370 Main Street, Tucker, Georgia (the "Seller"), for the consideration paid by
UCI MEDICAL AFFILIATES OF GEORGIA, INC., a South Carolina corporation with
offices at 1901 Main Street, Suite 1200, Columbia, South Carolina 29201 (the
"Buyer") set forth in that certain Acquisition Agreement and Plan of
Reorganization dated as of February 9, 1998, by and between among others Seller;
Buyer; UCI Medical Affiliates, Inc., a Delaware corporation; MainStreet
Healthcare Corporation, a Delaware corporation; MainStreet Healthcare Medical
Group, PC, a Tennessee professional corporation; Prompt Care Medical Center,
Inc., a Georgia corporation; Michael J. Dare; A. Wayne Johnson; PENMAN Private
Equity and Mezzanine Fund, L.P., a Delaware limited partnership; and Robert G.
Riddett, Jr. (the "Agreement"), the receipt and sufficiency whereof is hereby
acknowledged, has bargained and sold and by these presents does sell, assign and
transfer unto Buyer all of Seller's right, title and interest in and to, all the
MHMG-GA Assets described in the Agreement, all as provided in the Agreement.
TO HAVE AND TO HOLD the same unto Buyer, its successors and assigns,
forever. AND Seller does for itself and its successors and assigns, covenant and
agree to and with Buyer, its successors and assigns, to warrant and defend the
sale and conveyance of the aforesaid assets hereby sold unto Buyer.
This Bill of Sale is made, executed and delivered pursuant to the
Agreement, and is subject to all of the terms, provisions, and conditions
thereof, including (without limitation) the indemnification therein. To the
extent of any conflict between the terms hereof and thereof, the terms of the
Agreement shall be controlling.
All capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Agreement unless the context clearly requires
otherwise.
IN WITNESS WHEREOF, Seller has duly executed this Bill of Sale to be
effective as of 11:59 p.m. on the 31st day of March, 1998.
IN THE PRESENCE OF: MAINSTREET HEALTHCARE MEDICAL GROUP,
P.C., a Georgia professional corporation
(CORPORATE SEAL)
__________________________ By:______________________________________
(Witness) Its:____________________________________
__________________________
(Witness)
<PAGE>
STATE OF ____________________________________________ )
) PROBATE
COUNTY OF ___________________________________________ )
PERSONALLY APPEARED before me the undersigned witness who, after first
being duly sworn, deposes and says that s/he saw the within named MAINSTREET
HEALTHCARE MEDICAL GROUP, P.C., a Georgia professional corporation, by
_____________________________, its ___________________________, sign, seal and,
as its act and deed, deliver the within written Bill of Sale for the uses and
purposes therein mentioned and that s/he with the other witness whose signature
appears above, witnessed the execution thereof.
___________________________
Witness
SWORN to before me this__________
day of ___________________________________, 1998.
__________________________________________ (L.S.)
Notary Public for___________________________
My Commission Expires:______________
Exhibit 8.3.4
MHMG-GA Assignment and Assumption
[See Attached]
<PAGE>
ASSIGNMENT AND ASSUMPTION AGREEMENT
(MainStreet Healthcare Medical Group, P.C., a Georgia professional corporation)
KNOW ALL MEN, that MAINSTREET HEALTHCARE MEDICAL GROUP, P.C., a
Georgia professional corporation with its principal office at 2370 Main Street,
Tucker, Georgia (the "Assignor"), for and in consideration of good and valuable
consideration to it in hand paid at or before the ensealing and delivery of
these presents, by UCI MEDICAL AFFILIATES OF GEORGIA, INC., a South Carolina
corporation ("Assignee"), the receipt and sufficiency whereof is hereby
acknowledged, hereby assigns to Assignee all of Assignor's right, title and
interest in and to all the intangible assets and rights composing portions of
the MHMG-GA Assets as described in the Acquisition Agreement and Plan of
Reorganization dated effective as of February 9, 1998, by and between Assignor;
Assignee; UCI Medical Affiliates, Inc., a Delaware corporation; MainStreet
Healthcare Corporation, a Delaware corporation; MainStreet Healthcare Medical
Group, PC, a Tennessee professional corporation; Prompt Care Medical Center,
Inc., a Georgia corporation; Michael J. Dare; A. Wayne Johnson; PENMAN Private
Equity and Mezzanine Fund, L.P., a Delaware limited partnership; and Robert G.
Riddett, Jr. (the "Agreement"), all as provided in the Agreement.
Assignee hereby covenants with Assignor to assume and faithfully
perform and discharge all of the terms, covenants, liabilities and obligations
set forth on Schedule 1 attached hereto (subject to the Agreement) maturing and
to be performed or discharged by Assignor, if any, under the above assigned
contracts beginning on the date hereof and henceforth.
This Assignment is made, executed, and delivered pursuant to the
Agreement, and is subject to all the terms, provisions and conditions thereof,
including (without limitation) the mutual indemnifications therein. To the
extent of any conflict between the terms hereof and thereof, the terms of the
Agreement shall be controlling. All capitalized terms not otherwise defined
herein shall have the meanings ascribed to them in the Agreement unless the
context clearly requires otherwise.
[SIGNATURE PAGE ATTACHED]
ASSIGNMENT AND ASSUMPTION AGREEMENT
PAGE 1
<PAGE>
IN WITNESS WHEREOF, the parties have duly executed this Assignment and
Assumption Agreement to be effective as of the 31st day of March, 1998.
ASSIGNOR:
---------
IN THE PRESENCE OF: MAINSTREET HEALTHCARE MEDICAL GROUP,
P.C., a Georgia professional corporation
(CORPORATE SEAL)
_______________________ By:_________________________________________
(Witness) Its:______________________________________
_______________________
(Witness)
ASSIGNEE:
---------
UCI MEDICAL AFFILIATES OF GEORGIA, INC.,
a South Carolina corporation
_______________________
(Witness)
By:_________________________________________
Its:______________________________________
_______________________
(Witness)
ASSIGNMENT AND ASSUMPTION AGREEMENT
PAGE 2
<PAGE>
SCHEDULE 1
LIABILITIES TO BE ASSUMED
None
ASSIGNMENT AND ASSUMPTION AGREEMENT
PAGE 3
Exhibit 8.3.5
MHMG-TN Bill of Sale
[See Attached]
<PAGE>
BILL OF SALE
(MainStreet Healthcare Medical Group, PC, a Tennessee professional corporation)
KNOW ALL MEN BY THESE PRESENTS, that MAINSTREET HEALTHCARE MEDICAL
GROUP, PC, a Tennessee professional corporation, with its principal office at
2370 Main Street, Tucker Georgia (the "Seller"), for the consideration paid by
UCI MEDICAL AFFILIATES OF GEORGIA, INC., a South Carolina corporation with
offices at 1901 Main Street, Suite 1200, Columbia, South Carolina 29201 (the
"Buyer") set forth in that certain Acquisition Agreement and Plan of
Reorganization dated as of February 9, 1998, by and between among others Seller;
Buyer; UCI Medical Affiliates, Inc., a Delaware corporation; MainStreet
Healthcare Corporation, a Delaware corporation; MainStreet Healthcare Medical
Group, P.C., a Georgia professional corporation; Prompt Care Medical Center,
Inc., a Georgia corporation; Michael J. Dare; A. Wayne Johnson; PENMAN Private
Equity and Mezzanine Fund, L.P., a Delaware limited partnership; and Robert G.
Riddett, Jr. (the "Agreement"), the receipt and sufficiency whereof is hereby
acknowledged, has bargained and sold and by these presents does sell, assign and
transfer unto Buyer all of Seller's right, title and interest in and to, all the
MHMG-TN Assets described in the Agreement, all as provided in the Agreement.
TO HAVE AND TO HOLD the same unto Buyer, its successors and assigns,
forever. AND Seller does for itself and its successors and assigns, covenant and
agree to and with Buyer, its successors and assigns, to warrant and defend the
sale and conveyance of the aforesaid assets hereby sold unto Buyer.
This Bill of Sale is made, executed and delivered pursuant to the
Agreement, and is subject to all of the terms, provisions, and conditions
thereof, including (without limitation) the indemnification therein. To the
extent of any conflict between the terms hereof and thereof, the terms of the
Agreement shall be controlling.
All capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Agreement unless the context clearly requires
otherwise.
IN WITNESS WHEREOF, Seller has duly executed this Bill of Sale to be
effective as of 11:59 p.m. on the 31st day of March, 1998.
IN THE PRESENCE OF: MAINSTREET HEALTHCARE MEDICAL GROUP, PC,
a Tennessee professional corporation
(CORPORATE SEAL)
_______________________ By:_____________________________________
(Witness) Its:__________________________________
_______________________
(Witness)
<PAGE>
STATE OF ___________________________ )
) PROBATE
COUNTY OF __________________________ )
PERSONALLY APPEARED before me the undersigned witness who, after first
being duly sworn, deposes and says that s/he saw the within named MAINSTREET
HEALTHCARE MEDICAL GROUP, PC, a Tennessee professional corporation, by
_________________________, its _______________________, sign, seal and, as its
act and deed, deliver the within written Bill of Sale for the uses and purposes
therein mentioned and that s/he with the other witness whose signature appears
above, witnessed the execution thereof.
___________________________
Witness
SWORN to before me this ______
day of ___________________________________, 1998.
___________________________________________(L.S.)
Notary Public for__________________________________
My Commission Expires:_______________________
Exhibit 8.3.6
MHMG-TN Assignment and Assumption
[See Attached]
<PAGE>
ASSIGNMENT AND ASSUMPTION AGREEMENT
(MainStreet Healthcare Medical Group, PC, a Tennessee professional corporation)
KNOW ALL MEN, that MAINSTREET HEALTHCARE MEDICAL GROUP, PC, a
Tennessee professional corporation with its principal office at 2370 Main
Street, Tucker, Georgia (the "Assignor"), for and in consideration of good and
valuable consideration to it in hand paid at or before the ensealing and
delivery of these presents, by UCI MEDICAL AFFILIATES OF GEORGIA, INC., a South
Carolina corporation ("Assignee"), the receipt and sufficiency whereof is hereby
acknowledged, hereby assigns to Assignee all of Assignor's right, title and
interest in and to all the intangible assets and rights composing portions of
the MHMG-TN Assets as described in the Acquisition Agreement and Plan of
Reorganization dated effective as of February 9, 1998, by and between Assignor;
Assignee; UCI Medical Affiliates, Inc., a Delaware corporation; MainStreet
Healthcare Corporation, a Delaware corporation; MainStreet Healthcare Medical
Group, P.C., a Georgia professional corporation; Prompt Care Medical Center,
Inc., a Georgia corporation; Michael J. Dare; A. Wayne Johnson; PENMAN Private
Equity and Mezzanine Fund, L.P., a Delaware limited partnership; and Robert G.
Riddett, Jr. (the "Agreement"), all as provided in the Agreement.
Assignee hereby covenants with Assignor to assume and faithfully
perform and discharge all of the terms, covenants, liabilities and obligations
set forth on Schedule 1 attached hereto (subject to the Agreement) maturing and
to be performed or discharged by Assignor, if any, under the above assigned
contracts beginning on the date hereof and henceforth.
This Assignment is made, executed, and delivered pursuant to the
Agreement, and is subject to all the terms, provisions and conditions thereof,
including (without limitation) the mutual indemnifications therein. To the
extent of any conflict between the terms hereof and thereof, the terms of the
Agreement shall be controlling. All capitalized terms not otherwise defined
herein shall have the meanings ascribed to them in the Agreement unless the
context clearly requires otherwise.
[SIGNATURE PAGE ATTACHED]
<PAGE>
IN WITNESS WHEREOF, the parties have duly executed this Assignment and
Assumption Agreement to be effective as of the 31st day of March, 1998.
ASSIGNOR:
---------
IN THE PRESENCE OF: MAINSTREET HEALTHCARE MEDICAL GROUP,
P.C., a Tennessee professional corporation
(CORPORATE SEAL)
_______________________ By:_________________________________________
(Witness) Its:______________________________________
_______________________
(Witness)
ASSIGNEE:
---------
UCI MEDICAL AFFILIATES OF GEORGIA, INC.,
a South Carolina corporation
_______________________
(Witness)
By:_________________________________________
Its:______________________________________
_______________________
(Witness)
<PAGE>
SCHEDULE 1
LIABILITIES TO BE ASSUMED
None
Exhibit 8.3.7
Form of Non-Solicits
[See Attached]
<PAGE>
NON-SOLICIT COVENANT
THIS NON-SOLICIT COVENANT ("Agreement"), is made and entered into to be
effective as of this 31st day of March, 1998, by and between UCI Medical
Affiliates of Georgia, Inc., a South Carolina corporation ("UCI of GA"), and
_____________________________ ("Shareholder").
Preliminary Statement
---------------------
Shareholder is currently a shareholder of MainStreet Healthcare
Corporation, a Delaware corporation ("Mainstreet"). Mainstreet has owned and
operated various medical-related facilities and equipment in the States of
Georgia and Tennessee (the "Business").
Pursuant to that certain Acquisition Agreement and Plan of
Reorganization dated February ____, 1998 (the "Acquisition Agreement"), by and
among UCI of GA; UCI Medical Affiliates, Inc., a Delaware corporation ("UCI");
Mainstreet; MainStreet Healthcare Medical Group, P.C., a Georgia corporation
("MSH of GA"); Mainstreet Healthcare Medical Group, PC, a Tennessee corporation
("MSH of TN"); Michael J. Dare; A. Wayne Johnson; PENMAN Private Equity and
Mezzanine Fund, L.P., a Delaware limited partnership; and Robert G. Riddett,
Jr., Mainstreet transferred substantially all of Mainstreet's assets (the
"Assets") to UCI of GA as set forth in the Acquisition Agreement. Upon the
closing of the transactions contemplated in the Acquisition Agreement, UCI of GA
intends to operate the Assets acquired by it for UCI of GA's business similar to
the Business of Mainstreet. In connection therewith, UCI of GA has contracted
with Doctor's Care of Georgia, P.C., a Georgia professional corporation ("DC of
GA") to provide health care services at such facilities within the State of
Georgia, and with Doctor's Care of Tennessee, P.C., a Tennessee professional
corporation ("DC of TN") to provide health care services at such facilities
within the State of Tennessee. For purposes herein MainStreet, MSH of GA, and
MSH of TN are collectively referred to herein as the "MainStreet Entities".
Mainstreet has conducted the Business for several years, and
Shareholder has made use of, acquired, and added to confidential and proprietary
information and trade secrets of Mainstreet, all of which are portions of the
Assets (which Assets are being transferred to UCI of GA pursuant to the
Acquisition Agreement).
Shareholder also has developed unique information and knowledge about
the competitive market, locations, potential patients, processes and prospects
of the Business of Mainstreet.
The value of the acquisition by UCI of GA pursuant to the Acquisition
Agreement would be diminished in the event that Shareholder were to violate the
terms of this Agreement. UCI, UCI of GA, DC of GA, and DC of TN (collectively
the "UCI Entities") have required, as a condition precedent to its purchase of
such Assets pursuant to the Acquisition Agreement, that Shareholder covenant not
to divulge any confidential information and not to solicit the employees of the
UCI Entities, or any one of them, as set forth herein.
Shareholder has agreed to provide such covenants as set forth herein as
a material inducement to the UCI Entities to enter into and close the
Acquisition Agreement and in consideration of the payments to be made
thereunder. Shareholder's covenants contained herein are ancillary to the
Acquisition Agreement. Shareholder acknowledges that he/she will benefit from
the Acquisition Agreement.
Pursuant to the Acquisition Agreement, UCI of GA and Shareholder desire
to set forth the terms and conditions of their agreements and understandings
respecting such covenants.
Non-Solicit Covenant
Page 1
<PAGE>
Statement of Agreement
----------------------
NOW, THEREFORE, in consideration of the foregoing premises, the
promises set forth herein, the Acquisition Agreement, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Shareholder and UCI of GA, intending to be legally bound, hereby
agree and covenant as follows:
1. Non-Disclosure of Information. Shareholder shall not, at any time
after the date hereof, directly or indirectly, divulge or disclose to any person
or entity including without limitation any Affiliate (as defined below) of
Shareholder for any purpose whatsoever any confidential information that has
been developed or obtained by, or disclosed to, Shareholder at any time before
or after the date hereof (exclusive of such information as is in the public
domain or as is required to be disclosed pursuant to an applicable law, rule,
regulation, or final non-appealable order of a court of competent jurisdiction).
Shareholder acknowledges that such confidential information is of a special and
unique nature and value relating to matters of the Mainstreet's Business,
including, without limitation, the lists of patients and potential patients of
one or more of the Mainstreet Entities, leases or contacts (which were
specifically targeted by one or more of the Mainstreet Entities prior to
Closing), pricing information and lists, sales and marketing materials and
methods, proprietary information, trade secrets, trademarks, systems,
procedures, manuals, confidential reports, records, operational expertise, the
nature and type of services rendered by the Mainstreet Entities, or any one of
them, the equipment and methods used and preferred by patients and customers of
the Mainstreet Entities, or any one of them, and the fees paid by them (all of
which are deemed for all purposes to be confidential, proprietary, and trade
secrets of one or more of the Mainstreet Entities transferred to the UCI
Entities pursuant to the Acquisition Agreement).
2. Covenants against Solicitation.
[PROVISION FOR PENMAN ONLY
a. Employees. For a period of two (2) years after the
effective date hereof, Shareholder shall not solicit or in any manner attempt to
solicit or induce any person employed by, or an agent of, one or more of the UCI
Entities to terminate such person's association or contract of employment or
agency, as the case may be, with such entity.
b. Senior Employees. For a period of five (5) years after the
effective date hereof, Shareholder shall not solicit or in any manner attempt to
solicit or induce the following three (3) senior management employees of one or
more of the UCI Entities to terminate such person's association or contract of
employment or agency, as the case may be, with such entity:_____________________
____________________________________________.]
[PROVISION FOR ALL CLASS B SHAREHOLDERS OTHER THAN PENMAN
a. Employees. For a period of two (2) years after the
effective date hereof, Shareholder shall not, directly or through an Affiliate
(as defined below) solicit or in any manner attempt to solicit or induce any
person employed by, or an agent of, one or more of the UCI Entities to terminate
such person's association or contract of employment or agency, as the case may
be, with such entity.
b. Senior Employees. For a period of five (5) years after the
effective date hereof, Shareholder shall not, directly or through an Affiliate
(as defined below) solicit or in any manner attempt to solicit or induce the
following three (3) senior management employees of one or more of the UCI
Entities to terminate such person's association or contract of employment or
agency, as the case may be, with such entity:___________________________________
______________________________________________________________________________.]
Non-Solicit Covenant
Page 2
<PAGE>
c. Definition of Affiliate. For purposes of this Agreement, an
"Affiliate" of Shareholder is a Person (as defined below) that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with Shareholder. For purposes of this Agreement, a
"Person" includes, in addition to such person, all of the following persons: (i)
any relative or spouse of such person, or any relative of such spouse, any one
of whom has the same home as such person; (ii) any trust or estate in which such
person or any of the persons specified in Section 2(c)(i) of this Agreement
collectively own ten percent (10%) or more of the total beneficial interest, or
of which any of such persons serve as trustee, executor or in any other
capacity; and (iii) any corporation, partnership, limited liability company or
other organization in which such person or any of the persons specified in
Section 2(c)(i) of this Agreement are the beneficial owners collectively of ten
percent (10%) of any class of equity securities, of the equity interest, or of
the partnership interest.
3. Consideration. In consideration of the restrictions and covenants
contained herein, Shareholder hereby acknowledges the receipt and adequacy of
such other consideration set forth in the Acquisition Agreement.
4. Remedies.
a. Accounting for Lost Profits. If Shareholder shall violate
any of the provisions of Sections 1 or 2, the UCI Entities shall be entitled to
recover any non-speculative lost profits incurred by any one or more of the UCI
Entities as a result of, growing out of, or in connection with, any such
violation by Shareholder. This remedy shall be in addition to, and not in
limitation of, any injunctive relief or other rights, remedies, or damages, to
which any one or more of the UCI Entities is or may be entitled as a result of
this Agreement.
b. Injunctive Relief. In the event of a breach or threatened
breach by Shareholder of any of the provisions of Sections 1 or 2, the UCI
Entities, in addition to, and not in limitation of, any other rights, remedies,
or damages available to any one or more of the UCI Entities at law or in equity,
shall be entitled to a temporary restraining order, preliminary injunction, and
permanent injunction in order to prevent or restrain any such breach by
Shareholder or by Shareholder's partners, agents, representatives, servants,
employers, employees, companies, consulting clients, and/or any and all persons
directly or indirectly acting for or with Shareholder. Shareholder agrees that
in the event of any breach by Shareholder of the covenants set forth in this
Agreement, the UCI Entities shall suffer irreparable harm for which the remedy
of monetary damages may be inadequate.
c. Alternatives. The UCI Entities shall have the option, in
their sole discretion, to enforce the various restrictions of Sections 1 and 2
cumulatively, in the alternative, or consecutively.
5. Reasonableness of Restrictions.
a. Acknowledgment. Shareholder has carefully read and
considered the provisions of Sections 1, 2, 3 and 4, and, having done so,
voluntarily agrees that the restrictions set forth in those Sections, including,
but not limited to, the time period of restriction, the geographical areas of
restriction, and the scope of restricted activities set forth in Section 2, are
fair and reasonable and are reasonably required for the protection of the
legitimate interests of each of the UCI Entities, and their respective parent or
subsidiary corporations, partnerships, officers, directors, partners, employees
and affiliates.
b. Enforcement. In the event that, notwithstanding the
foregoing, any of the provisions of Sections 1, 2, or 4 or any parts thereof
shall be held to be invalid or unenforceable, the remaining provisions or parts
thereof shall nevertheless continue to be valid and enforceable as though the
invalid or unenforceable portions or parts had not been included therein. In the
event that any provisions of Sections 1 or 2 relating to the time period and/or
the areas of restriction and/or the scope of restricted activities and/or
related aspects shall be declared
Non-Solicit Covenant
Page 3
<PAGE>
by a court of competent jurisdiction to exceed the maximum restrictiveness such
court deems reasonable and enforceable, the time period and/or areas of
restriction and/or the scope of restricted activities and/or related aspects
deemed reasonable and enforceable by the court shall become and thereafter be
the maximum restriction in such regard, and the restriction shall remain
enforceable to the fullest extent deemed reasonable by such court.
6. Miscellaneous.
a. Burden and Benefit. This Agreement shall be binding upon
UCI of GA's successors and assigns and Shareholder's heirs, personal and legal
representatives, successors and assigns, and shall inure to the benefit of each
of the UCI Entities' respective successors and permitted assigns and
Shareholder's heirs, personal legal representatives, successors, and permitted
assigns.
b. Modifications. This Agreement can only be modified by a
written agreement duly signed by Shareholder and an authorized representative of
UCI of GA. Moreover, in order to avoid uncertainty, ambiguity and
misunderstandings in their relationships, the parties hereto covenant and agree
not to enter into any oral agreement or understanding inconsistent or in
conflict with this Agreement; and the parties hereto further covenant and agree
that any oral communication allegedly or purportedly constituting such an
agreement or understanding shall be absolutely null, void and without effect.
c. Waiver. Any waiver by either party of any breach or any
term or condition hereof shall be effective only if in writing and such writing
shall not be deemed to be a waiver of any subsequent or other breach, term or
condition of this Agreement.
d. Assignments. Neither this Agreement nor any rights
hereunder may be assigned or otherwise transferred by Shareholder. This
Agreement may be assigned or otherwise transferred by UCI of GA to any entity
controlled by or under common control with UCI of GA, or in connection with the
merger or acquisition of, or sale of substantially all of, the assets of UCI of
GA.
e. Cumulative Remedies. All rights and remedies of a party
hereunder shall be cumulative and in addition to such rights and remedies as may
be available to a party at law or equity.
f. Venue and Jurisdiction. The parties hereto hereby (i) agree
that any litigation, action or proceeding arising out of or relating to this
Agreement may be instituted in a state or federal court located in Richland
County, South Carolina, (ii) waive any objection which they might have now or
hereafter to any such litigation, action, or proceeding based upon improper
venue or inconvenient forum, and (iii) irrevocably submit to the jurisdiction of
such courts in any such litigation, action or proceeding. For all purposes of
this Agreement, the parties hereto further agree that service of process may be
effected pursuant to United States mail.
g. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior contemporaneous written or oral agreements and
representations between the parties with respect thereto.
h. Governing Law. The construction and interpretation of this
Agreement shall at all times and in all respects be governed by the laws of the
State of South Carolina.
i. Severability. The invalidity or unenforceability or any
provision of this Agreement shall not render invalid or unenforceable any other
provision hereof.
Non-Solicit Covenant
Page 4
<PAGE>
j. Survival. All terms of this Agreement shall survive the
Closing under the Acquisition Agreement.
k. Usage. Capitalized terms used herein which are not
otherwise defined herein shall have the meanings ascribed to them in the
Acquisition Agreement. 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 "Paragraphs", "Sections", and
similar cross references shall refer to specified portions of this Agreement,
unless the context clearly requires otherwise.
l. Enforcement. In the event litigation or other legal
proceedings are commenced to enforce any rights under this Agreement, all
reasonable legal expenses (including reasonable attorney's fees) and other
direct costs of litigation of the prevailing party shall be paid by the
non-prevailing party. All remedies specified herein are cumulative and
non-exclusive, and parties shall be entitled to seek or enforce any other rights
or remedies available to them at law or in equity.
m. Notices. Any notice, request, approval, consent, demand or
other communication shall be effective upon the first to occur of the following:
(i) upon receipt by the party to whom such notice, request, approval, consent,
demand or other communication is being given; or (ii) three (3) business days
after being duly deposited in the United States certified mail, return receipt
requested, and addressed as follows:
UCI of GA: UCI Medical Affiliates of Georgia, Inc.
--------- 1901 Main Street, Suite 1200
Mail Code 1105
Columbia, South Carolina 29201
Attn.: Jerry F. Wells, Jr.
Shareholder: ________________________________________
----------- ________________________________________
________________________________________
________________________________________
The parties hereto may change their respective addresses by notice in writing
given to the other party to this Agreement.
Non-Solicit Covenant
Page 5
<PAGE>
IN WITNESS WHEREOF, this Non-Solicit Covenant is executed under seal by
UCI of GA and Shareholder to be effective as of the date first above written.
WITNESSES: SHAREHOLDER:
- ---------- ------------
_______________________
________________________________(SEAL)
Print Name:
Social Security Number:
_______________________
UCI OF GA:
----------
UCI MEDICAL AFFILIATES OF GEORGIA
_______________________
By:______________________________(SEAL)
Its:________________________________
_______________________
Non-Solicit Covenant
Page 6
<PAGE>
Exhibit 8.3.8
Form of Investment Letter
[See Attached]
<PAGE>
INVESTMENT LETTER
March 31, 1998
TO: UCI Medical Affiliates, Inc.
1901 Main Street, Suite 1200
Columbia, SC 29201
Attn: President
RE: Issuance of Common Stock in UCI Medical Affiliates, Inc.
Dear Sir:
On this date, the Company is issuing to the undersigned shareholder
("Transferee") of MainStreet Healthcare Corporation, a Delaware corporation
("Main Street"), the number of shares of the common stock, $0.05 par value, of
UCI Medical Affiliates, Inc., a Delaware corporation (the "Company"), as are set
forth opposite Transferee's signature on the signature page hereof (the
"Shares"). In consideration of your agreement to issue the Shares to Transferee,
Transferee hereby represents and warrants to you and hereby covenants and agrees
with you, as follows:
1. Transferee has carefully read this Investment Letter and, to the
extent Transferee believes necessary, has discussed with Transferee's counsel
and other professional advisor(s) the representations, warranties, covenants and
agreements which Transferee makes by signing it, and any applicable limitations
upon Transferee's transfer of the Shares issuable thereunder. Transferee
acknowledges that Transferee has not relied upon the legal counsel or
accountants for the Company regarding the Shares or the transactions
contemplated by this Investment Letter, and Transferee has been advised to
engage separate legal counsel and accountants to represent Transferee's
individual interest and advise Transferee regarding the structure of and risks
associated with such transactions.
2. Transferee understands that as a publicly traded company, the
Company files with the Securities and Exchange Commission (the "SEC") various
reports, including quarterly and annual financial statements, annual reports to
shareholders, and proxy statements, and that all of such reports, statements and
information are available to the public, including Transferee, from the SEC and
directly from the Company (collectively the "Documents"). Transferee has been
given the opportunity to obtain copies of such Documents and to ask questions
of, and receive answers from, representatives of the Company with respect to the
Company and the Shares, concerning the terms and conditions of the transfer of
the Shares by the Company to Transferee, and has been given the opportunity to
obtain such additional information necessary to verify the accuracy of any
information provided to Transferee by the Company in order for Transferee to
evaluate the merits and risks of an investment in the Company to the extent that
the Company possesses such information or could acquire it without unreasonable
effort or expense. Transferee has been furnished with all information concerning
the Shares and the Company that Transferee desires.
Transferee further acknowledges that Transferee is executing and
delivering this Investment Letter solely on the basis of information contained
in the Documents and not on the basis of any information, representations, or
agreements made by any other person, and that no representations or warranties
of any nature have been made to Transferee with respect to the ultimate economic
consequences or tax consequences of Transferee's investment in the Company.
Investment Letter
Page 1
<PAGE>
Transferee acknowledges that any forecasted financial data which may have been
given to Transferee is for illustration purposes only and no assurance is given
that actual results will correspond with the results contemplated in any such
data.
3. Transferee is _____ or is not _____ (initial one) an "accredited
investor" as that term is defined in Rule 501 of Regulation D promulgated by the
SEC under the Securities Act of 1933, as amended (the "1933 Act"). For this
purpose, Transferee understands that an "accredited investor" includes:
(i) any individual who: (A) has a net worth (with spouse) in excess of
$1 million; or (B) has had an individual income in excess of $200,000
(or joint income with spouse in excess of $300,000) in each of the two
most recent years and who reasonably expects the same income level for
the current year; or (C) who is an executive officer or director of the
Company;
(ii) any entity in which all of the equity owners or partners are
"accredited investors;" or
(iii) any corporation or partnership with total assets in excess of
$5,000,000 that was not formed for the specific purpose of purchasing
the securities subscribed hereunder.
4. Transferee considers himself/herself/itself to be a sophisticated
investor in companies similarly situated to the Company, and Transferee has such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of the prospective investment in the Shares. Any
information Transferee may have furnished to you with respect to Transferee's
status as a sophisticated investor, Transferee's business experience or
Transferee's financial position is correct.
5. If Transferee is an individual, Transferee's current state of
residency is the state reflected in Transferee's current address as set forth on
the signature page hereof, and Transferee has no present intention of moving
from such state of residency. If Transferee is an entity, Transferee's state of
incorporation or organization are as set forth on the signature page hereof. If
Transferee is an entity which does not meet the classification set forth under
Section 3 (iii) above, each of Transferee's equity owners and/or partners has
the same state of residence as the Transferee's state of incorporation or
organization and none of Transferee's equity owners and/or partners has any
present intention of moving from such state of residency.
6. Transferee has been advised and acknowledges that the issuance of
the Shares will not be registered under the 1933 Act, in reliance upon the
exemption(s) from registration promulgated thereunder. Transferee also
acknowledges that the issuance of the Shares will not be registered under the
securities laws of any state. Consequently, Transferee agrees that the Shares
cannot be resold unless they are registered under the 1933 Act and applicable
state securities laws, or unless an exemption from such registration
requirements is available.
7. Transferee understands and acknowledges that, except as specifically
set forth in that certain Registration Rights Agreement dated as of March 31,
1998, the Company is under no obligation to register the Shares for public sale
or to comply with the conditions of Rule 144 promulgated by the SEC under the
1933 Act or to take any other action necessary in order to make available any
exemption for the subsequent transfer of the Shares without registration.
8. Transferee is purchasing the Shares solely for Transferee's own
account and not as nominee for, representative of, or otherwise on behalf of any
other person. Transferee is purchasing the Shares with the intention of
Investment Letter
Page 2
<PAGE>
holding the Shares for investment, with no present intention of participating,
directly or indirectly, in a subsequent public distribution of the Shares unless
registered under the 1933 Act and applicable state securities laws, or unless an
exemption from such registration requirements is available. Transferee shall not
make any sale, transfer or other disposition of the Shares in violation of state
or federal law.
9. Transferee has been advised and acknowledges that there is currently
no active public or private market for the Shares and that no active market for
the Shares may develop. Transferee is aware that Transferee's investment in the
Company is speculative and involves a high degree of risk of loss arising from,
among other things, substantial market, operational, competitive and other
risks, and having made Transferee's own evaluation of the risks associated with
this investment, Transferee is aware and Transferee has been advised that
Transferee must bear the economic risks of a purchase of the Shares
indefinitely.
10. Transferee is aware that the Company may offer and sell additional
shares of common stock in the future, thereby diluting Transferee's percentage
equity ownership of the Company.
11. Transferee acknowledges that the Shares were not offered to
Transferee by means of any form of general or public solicitation or general
advertising, or publicly disseminated advertisements or sales literature,
including (i) any advertisement, article, notice or other communication
published in any newspaper, magazine, or similar media, or broadcast over
television or radio, or (ii) any seminar or meeting to which Transferee was
invited by any of the foregoing means of communications.
12. Transferee understands and agrees that the Company and all current
and future shareholders of the Company are relying on the agreements and
representations contained herein. Transferee understands fully the meaning and
legal consequences of the provisions herein, and agrees to indemnify and hold
harmless the Company, and each other person, if any, subject to liability
because of such person's connection with the Company, against all actions,
claims, losses, damages and liabilities arising out of or based upon any false
representation or warranty herein, or any breach by the undersigned of any
provision hereof, and to reimburse the Company and each such other person for
any legal and other expenses incurred by the Company and each such other person
in connection with investigating, defending, and, if appropriate, settling any
action, claim, loss, damage or liability.
13. In connection with the purchase of the Shares by Transferee,
Transferee has not and will not pay, and has no knowledge of the payment of, any
commission or other direct or indirect remuneration to any person or entity for
soliciting or otherwise coordinating the purchase of the Shares, except to such
persons or entities as are duly licensed and/or registered to engage in
securities offering and selling activities (or are exempt from such licensing
and/or registration requirements) in the state(s) in which such activities have
taken place in connection with the transaction contemplated by this Investment
Letter.
14. Transferee has been advised and agrees that there will be placed on
any certificates representing the Shares, or any substitution(s) thereof, a
legend stating in substance the following (and including any restrictions or
conditions that may be required by any applicable state law), and Transferee has
been advised and further agrees that the Company will refuse to permit the
transfer of the Shares out of Transferee's name in the absence of compliance
with the terms of such legend:
Investment Letter
Page 3
<PAGE>
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS AND
MAY NOT BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED 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 TRANSFER SUCH
SECURITIES ONLY 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 OR THAT SUCH REGISTRATION IS NOT REQUIRED AND THAT SUCH
TRANSFER WILL NOT VIOLATE ANY APPLICABLE STATE SECURITIES LAWS.
15. Transferee has full power and authority to execute and deliver this
Investment Letter and has obtained the requisite corporate, governmental, and
third party approvals and consents necessary to execute and deliver this
Investment Letter.
16. Transferee confirms that the representations Transferee has
previously made to the Company and those contained in this Investment Letter are
correct and complete as of the date hereof, and that if there should occur any
material change in such representations prior to the receipt of the Shares by
Transferee, Transferee agrees that Transferee will immediately furnish such
revised or corrected representations or information to the Company.
This Investment Letter shall be binding upon Transferee and his/her
heirs, executors, administrators, successors, representatives and assigns and
shall enure to the benefit of the Company, and its successors and assigns. This
Investment Letter shall be governed and construed in accordance with the laws of
the State of South Carolina.
IN WITNESS WHEREOF, Transferee has executed this Investment Letter as
of the date set forth opposite Transferee's signature below.
TRANSFEREE:
Number of Shares of _______________________________
UCI Medical Affiliates, (Print name of Transferee here)
Inc. to be transferred:
______________Shares
______________________________________________________
Date: (Signature of Transferee or authorized representative)
______________________________________________________
(Street Address)
______________________________________________________
(City, State, Zip Code)
Investment Letter
Page 4
Exhibit 8.3.18
Form of Affidavit and Certificate of Assumed Liabilities
[See Attached]
<PAGE>
AFFIDAVIT AND CERTIFICATE OF ASSUMED LIABILITIES
OF
MAINSTREET HEALTHCARE CORPORATION
PERSONALLY appeared before me ROBERT G. RIDDETT, JR. who first
being duly sworn, deposes and says that:
1. Robert G. Riddett, Jr. is the President of MainStreet Healthcare
Corporation ("MainStreet"), and as such has access to, and knowledge of, the
business records of MainStreet.
2. The outstanding balances of the MainStreet Equipment Leases as of
March 31, 1998 total $ , in the aggregate.
3. The outstanding balances of the MainStreet Real Estate Leases as of
March 31, 1998 total $ , in the aggregate.
4. The outstanding balance (less applicable lending hold-back amounts)
of MainStreet's line of credit obligation with Bank One, N.A. (formerly NPL-LP,
Inc.), as of March 31, 1998 totals $_________________________________________.
5. This Affidavit and Certificate of Assumed Liabilities is being
delivered to UCI Medical Affiliates of Georgia, Inc. ("UCI of GA") pursuant to
Section 8.3.18 of that certain Acquisition Agreement and Plan of Reorganization
by and between among others UCI of GA and MainStreet, dated February 9, 1998
(the "Acquisition Agreement"), and may be relied upon by UCI of GA.
6. Capitalized terms used and not otherwise defined herein shall have
the respective meanings ascribed to them in the Acquisition Agreement.
Executed as of the 31st day of March, 1998.
__________________________________
Robert G. Riddett, Jr., President
Sworn to me this
31st day of March, 1998
_______________________
Notary Public For______________________
My Commission Expires:_______________
Exhibit 8.3.19
--------------
<PAGE>
Form of Transferor's Officers Certificate
[See Attached]
<PAGE>
TRANSFEROR'S OFFICERS' CERTIFICATE
[Corporate Name]
TO:_______________________________
We hereby certify in connection with the Acquisition Agreement and Plan
of Reorganization (the "Agreement") dated _____________________, 1998,
respecting the purchase of substantially all of the assets of MainStreet
Healthcare Corporation, a Delaware corporation; MainStreet Healthcare Medical
Group, P.C., a Georgia professional corporation; MainStreet Healthcare Medical
Group, PC, a Tennessee professional corporation; and Prompt Care Medical Center,
Inc., a Georgia corporation, by UCI Medical Affiliates, Inc., a Delaware
corporation; UCI Medical Affiliates of Georgia, Inc., a South Carolina
corporation; Doctor's Care of Georgia, P.C., a Georgia professional corporation;
and Doctor's Care of Tennessee, P.C., a Tennessee professional corporation, that
we are officers of _______________________________________________________ (the
"Company") and, that as such, have access to the corporate records and
familiarity with the matters therein contained and herein certified, that we are
authorized to execute and deliver this certificate in the name and on behalf of
the Company, and that:
1. Incumbency of Officers. The following named persons are on the date
hereof, and at all times since prior to the date of the Agreement, have been
duly elected, qualified, and acting officers of the Company holding the office
or offices set forth opposite his or her name, and that the signature set forth
opposite each such officer's name is his or her true and legal signature:
Name Office Signature
- ---- ------ ---------
- --------------------- ----------------- ---------------------
- --------------------- ----------------- ---------------------
- --------------------- ----------------- ---------------------
- --------------------- ----------------- ---------------------
- --------------------- ----------------- ---------------------
2. Incumbency of Directors. The following named persons are on the date
hereof, and were as of the date referenced in paragraph 5 below, the duly
elected, qualified, and acting directors of the Company, and constitute all the
directors of the Company at the date hereof and constituted all the directors at
the date referenced in paragraph 5 below:_______________________________________
________________________________________________________________________________
_________.
<PAGE>
3. Articles of Incorporation. Attached as Exhibit A hereto is a true,
correct, and complete copy of the Articles of Incorporation of the Company as
filed with the Secretary of State of the Company's state of organization, which
Articles of Incorporation have not been amended, modified, or rescinded except
as may be reflected in Exhibit A, and remain in full force and effect as of the
date hereof.
4. Bylaws. Attached as Exhibit B hereto is a true, correct, and
complete copy of the Bylaws of the Company, which Bylaws have not been amended,
modified, or rescinded except as may be reflected in Exhibit B and remain in
full force and effect as of the date hereof.
5. Approving Resolutions. Attached as Exhibit C hereto is a true,
correct, and complete copy of the resolutions of the Board of Directors of the
Company (with any preamble thereto) authorizing the Company's entering into and
performing its obligations under the Agreement, which resolutions were duly
adopted on __________________________, 199 , and which resolutions are in full
force and effect on and as of the date hereof, not having been amended, altered,
repealed, or rescinded. Attached as Exhibit D hereto is a true, correct, and
complete copy of the resolutions of the shareholders of the Company (with any
preamble thereto) authorizing the Company's entering into and performing its
obligations under the Agreement, which resolutions were duly adopted on
__________________________, 199 , and which resolutions are in full force and
effect on and as of the date hereof, not having been amended, altered, repealed,
or rescinded.
6. Bringdown of Representations and Warranties. Each representation and
warranty made by or respecting the Company in the Agreement is true and accurate
in all material respects as of the date of this certificate with the same effect
as if made on and as of the date of this certificate by the Company, except as
otherwise contemplated by the Agreement.
7. Compliance with Agreement. The Company has performed and complied in
all material respects with each and every covenant, agreement, and condition
required to be performed or complied with by the Company under the Agreement on
or prior to the date hereof.
IN WITNESS WHEREOF, we have executed this certificate on behalf of the
Company in the capacities set forth below our signatures as of the ____ day of ,
1998.
Sign:_____________________________
Print Name:_______________________
Title: President
Sign:_____________________________
Print Name:_______________________
Title: Secretary
2
Exhibit 8.3.20
Form of Legal Opinion of Transferors' and Class B Shareholders' Counsel
[See Attached]
<PAGE>
[Letterhead of S. Friedman & Associates, P.C.]
[Date of Closing]
UCI Medical Affiliates of Georgia, Inc.
Suite 1200
1901 Main Street
Columbia, South Carolina 29201
RE: Transfer of Assets of MainStreet HealthCare Corporation (the
"Seller") to UCI Medical Affiliates of Georgia, Inc. (the
"Buyer")
Ladies and Gentlemen:
We have acted as special counsel to Seller, MainStreet HealthCare
Medical Group, P.C., a Georgia corporation ("MHMG of GA"); MainStreet HealthCare
Medical Group, PC, a Tennessee corporation ("MHMG of TN"); Prompt Care Medical
Center, Inc., a Tennessee corporation ("Prompt Care"); A. Wayne Johnson
("Johnson"); Robert G. Riddett, Jr. ("Riddett"); Michael J. Dare ("Dare"); and
Penman Private Equity And Mezzanine Fund, L.P. ("Penman") in connection with the
Acquisition Agreement And Plan of Reorganization executed on February 9, 1998
(the "Agreement") by and among the Seller; MHMG-GA; MHMG-TN; Prompt Care;
Johnson; Riddett; Dare; Penman; Buyer; and UCI Medical Affiliates, Inc. This
opinion is furnished pursuant to the Closing requirements of Section 8.3.20 of
the Agreement. All capitalized terms used in this opinion letter that are not
otherwise defined herein shall have the meanings ascribed to them in the
Agreement.
EXAMINATIONS
------------
In our capacity as counsel to Seller, MHMG-GA, MHMG-TN, Johnson, Dare,
Riddett, Penman, and Prompt Care and for purposes of this opinion, we have
examined the following documents:
(i) Certain corporate records of Seller, MHMG-GA, MHMG-TN, and
Prompt Care including their respective articles of incorporation (or charter),
bylaws, and selected minutes;
(ii) The Agreement and all documents, instruments, statements,
and certificates required to be delivered by Seller, MHMG-GA, MHMG-TN, Prompt
Care, Johnson, Riddett, Dare, or Penman at Closing thereunder (collectively the
"Ancillary Documents");
(iii) Such other documents, records, and matters of law as we
have deemed necessary and appropriate to render the opinion set forth in this
letter, subject to the limitations, assumptions, and qualifications noted below.
As to questions of fact material to our opinions expressed herein, we
have, when relevant facts were not independently established, relied upon
certificates of, and information received from, officers of Seller, MHMG-GA,
MHMG-TN, Prompt Care, Johnson, Riddett, Dare, and Penman and upon the
representations and warranties of Seller, MHMG-GA, MHMG-TN, Prompt Care,
Johnson, Riddett, Dare, and Penman contained in the Agreement. In this regard,
the certificates of officers of Seller,
<PAGE>
UCI Medical Affiliates of Georgia, Inc.
[Date of Closing]
Page 2
MHMG-GA, MHMG-TN, and Prompt Care upon which we are relying are the certificates
to be delivered at Closing as required by the Agreement and certain officer's
certificates which has been delivered in advance of this opinion letter. We have
also relied upon certificates and other documents from, and conversations with,
public officials. We have not independently investigated or verified the facts
represented in such certificates, information, representations, or warranties
and do not opine as to the accuracy of any such fact.
OPINIONS
--------
Based upon our review of the foregoing and subject to the limitations,
assumptions, and qualifications as set forth herein, it is our opinion that, as
of the date of this letter:
1. Seller is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Delaware, with the requisite
corporate power and authority to own or lease its properties and assets, to
conduct its business to the extent now being conducted, and to enter into and
perform its obligations under the Agreement and the Ancillary Documents.
2. MHMG-GA is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Georgia, with the requisite
corporate power and authority to own or lease its properties and assets, to
conduct its business to the extent now being conducted, and to enter into and
perform its obligations under the Agreement and the Ancillary Documents.
3. MHMG-TN is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Tennessee, with the requisite
corporate power and authority to own or lease its properties and assets, to
conduct its business to the extent now being conducted, and to enter into and
perform its obligations under the Agreement and Ancillary Documents.
4. Penman is a limited partnership duly organized, validly existing,
and in good standing under the laws of the State of Delaware, with the requisite
power and authority to own or lease its properties and assets, to conduct its
business to the extent now being conducted, and to enter into and perform its
obligations under the Agreement and Ancillary Documents.
5. Neither the execution and delivery of the Agreement and the
Ancillary Documents, nor the consummation of the transactions contemplated
thereby, constitute or, with the giving of notice or passage of time or both,
would constitute a violation of or a default under or conflict with any term or
provision of Seller, MHMG-GA, MHMG-TN, or Prompt Care's respective Articles of
Incorporation or Bylaws or, to the best of our knowledge, any of the material
terms, conditions or provisions of any material agreement or instrument known to
us to which Seller, MHMG-GA, MHMG-TN, Prompt Care, Johnson, Riddett, Dare, and
Penman and upon the representations and warranties of Seller, MHMG-GA, MHMG-TN,
Prompt Care, Johnson, Riddett, Dare, and Penman is a party, or by which Seller,
MHMG-GA, MHMG-TN, Prompt Care, Johnson, Riddett, Dare, or Penman is or may be
bound, or constitute a violation of any statute, law or ordinance or any rule,
regulation, order of any governmental authority or any judicial decree, or to
the best of our knowledge, require Seller, MHMG- GA, MHMG-TN, Prompt Care,
Johnson, Riddett, Dare, or Penman to obtain the consent or approval of any
governmental authority (except for consents, approvals, or re-issuances
described in or required by the Agreement), lending institution, or other third
party except for such consents as have been
<PAGE>
UCI Medical Affiliates of Georgia, Inc.
[Date of Closing]
Page 3
obtained by Seller, MHMG-GA, MHMG-TN, Prompt Care, Johnson, Riddett, Dare, or
Penman and delivered to you in advance of this opinion letter.
6. All actions and proceedings necessary to be taken by or on the
behalf of Seller, MHMG-GA, MHMG-TN, Prompt Care, Johnson, Riddett, Dare, and
Penman in connection with the Agreement and the Ancillary Documents to which it
is a party and necessary to make the same effective have been duly and validly
taken. The Agreement and the Ancillary Documents to which it is a party have
been duly and validly executed and delivered by Seller, MHMG-GA, MHMG-TN, Prompt
Care, Johnson, Riddett, Dare, and Penman and constitute legal, valid, and
binding obligations of Seller, MHMG-GA, MHMG-TN, Prompt Care, Johnson, Riddett,
Dare, and Penman enforceable in accordance with their respective terms.
7. To the best of our knowledge, there are no actions, suits, claims,
or proceedings pending or threatened against Seller, MHMG-GA, MHMG-TN, Prompt
Care, Johnson, Riddett, Dare, or Penman before any federal, state, county,
municipal or other court, arbitrator, or other tribunal nor are there any
judgments, decrees, awards, regulations or orders of any such court, arbitrator,
or other tribunal outstanding against Seller, MHMG-GA, MHMG-TN, Prompt Care,
Johnson, Riddett, Dare, or Penman which if adversely determined would prohibit
or materially call into question the consummation of the transactions
contemplated by the Agreement or the Ancillary Documents.
8. Universal Diagnostics, Inc. ("Universal") is a Georgia corporation
whose Articles of Incorporation were filed with the Georgia Secretary of State
on January 27, 1997, but no further steps have been taken to organize Universal,
including but not limited to the issuance of stock. Universal owns no assets and
owes no liabilities and has no interest in the Assets to be sold to Buyer
hereunder or in the proceeds thereof.
9. Prompt Care owns no assets and owes no liabilities and has no
interest in the Assets to be sold to Buyer hereunder or in the proceeds thereof.
10. To the best of our knowledge, MainStreet has no Subsidiaries, and
has never had any Subsidiaries, other than Prompt Care and Universal and does
not control, directly or indirectly, or have any direct or indirect equity
participation or any equity interest in any corporation, partnership, trust,
venture, business, enterprise, firm or other business association other than
Prompt Care or Universal.
ASSUMPTIONS
-----------
In rendering these opinions we have assumed without investigation or
independent verification the following:
(a) The authenticity of any document or other instrument submitted to
us as an original, the conformity to the originals of any document or other
instrument submitted to us as a copy, the legal capacity of natural persons and
the genuineness of all signatures on such originals or copies (other than
signatures of Seller, MHMG-GA, MHMG-TN, Prompt Care, Johnson, Riddett, Dare, and
Penman).
(b) All documents executed by a party other than Seller, MHMG-GA,
MHMG-TN, Prompt Care, Johnson, Riddett, Dare, and Penman were duly and validly
executed and delivered by
<PAGE>
UCI Medical Affiliates of Georgia, Inc.
[Date of Closing]
Page 4
such party in the proper exercise of their corporate, governmental, or
individual powers, as the case may be, and are legal, valid and binding
obligations of such party enforceable against such party in accordance with
their respective terms or are otherwise effective at the date hereof.
(c) The absence of fraud, duress, or breach of fiduciary duty in the
inducement or effectuation of the subject transactions (in this connection we
affirm that we have no knowledge of the existence of any such fraud, duress, or
breach of fiduciary duty).
QUALIFICATIONS
--------------
These opinions are limited by and subject to the following
qualifications:
(a) These opinions are strictly limited in scope and application to the
laws of the United Sates of America and the laws of the State of Georgia. No
opinion is expressed: as to the laws of any other jurisdiction; regarding the
extent to which or manner in which such other laws are applicable to matters
herein addressed; whether opinions herein stated are, in whole or in part,
superseded or invalidated by the application of such other laws; or as to the
application of choice of law provisions in any documents or of any jurisdiction.
(b) The opinions expressed herein are subject to and may be affected or
limited by, and we do not purport to express any opinion herein concerning,
federal or state securities law and federal or state antitrust or related laws.
(c) Opinions expressed "to the best of our knowledge" are based upon
inquiry of Seller, MHMG-GA, MHMG-TN, Prompt Care, Johnson, Riddett, Dare, and
Penman, or officers of the relevant entity or entities as to the subject matter
thereof, but without independent investigation or verification of any kind.
While no independent investigations or verifications have been conducted by us,
we have no knowledge of facts in material conflict with such opinions.
(d) The opinions expressed herein are based upon applicable laws,
statutes, ordinances, rules and regulations as exist on this date, and we
express no opinion as to the effect which any future amendments, changes,
additions, or modifications thereof may have on the future performance or
validity of the Agreement or the Ancillary Documents, or on the consummation of
the transactions contemplated by the Agreement and the Ancillary Documents. We
assume no obligation to update or supplement our opinion to reflect any facts or
circumstances which may hereafter come to our attention or changes in law which
may hereafter occur.
(e) The enforceability of the Agreement and the Ancillary Documents,
and the availability of certain rights and remedies provided therein, are
subject to, and may be affected or limited by the following: (i) the provisions
of applicable liquidation, conservatorship, insolvency, bankruptcy,
reorganization, moratorium, rearrangement and other similar laws, including
court decisions interpreting such laws; (ii) all other applicable federal or
state laws, constitutional requirements, statutes, ordinances, judicial
decisions, rules and regulations affecting creditors' rights generally,
including, without limitation, fraudulent conveyances, violable preferences,
non-judicial foreclosures and self-help remedies; (iii) general principles
<PAGE>
UCI Medical Affiliates of Georgia, Inc.
[Date of Closing]
Page 5
of equity (regardless of whether such enforceability is considered in equity of
at law); (iv) the power of courts to deny enforcement of remedies generally
based upon public policy; (v) by the requirement that a party act with
reasonableness and in good faith to the extent required by the applicable law;
and (vi) such other matters of law which do not materially interfere with the
practical realization of the benefits intended to be conferred under the
Agreement and the Ancillary Documents.
(f) We express no opinion as to the enforceability of any provisions in
the Agreement or the Ancillary Documents: (i) purporting to waive or affect any
rights to notices which may not be waived under applicable law; (ii) relating to
delay or omission of enforcement of remedies; (iii) with respect to
severability, exculpation, and set off rights; or (iv) respecting
indemnification rights which may be limited under applicable securities or other
law.
(g) We express no opinion as to the title of any party to its
properties or the priority or absence of any liens or encumbrances thereon or
claims thereto.
(h) These opinions are provided to you as legal opinions only, and not
as guaranties or warranties of the matters discussed herein or of any
transaction or obligation.
We are furnishing this opinion letter for the sole and exclusive
benefit of the addressee and its counsel, and this opinion letter is not to be
relied upon or used by, or circulated, quoted or otherwise distributed to, any
other person without the prior written consent of the undersigned.
Exhibit 8.3.21
--------------
Form of Lease
[See Attached]
<PAGE>
STATE OF GEORGIA ) LEASE AGREEMENT
) AND
COUNTY OF DEKALB ) RIGHT OF FIRST REFUSAL
THIS LEASE AGREEMENT AND RIGHT OF FIRST REFUSAL (the "Lease") is made
as of this 31st day of March, 1998, to be effective as of the 1st day of April,
1998, by and between MAINSTREET HEALTHCARE CORPORATION, a Delaware corporation
(the "Landlord"), and UCI MEDICAL AFFILIATES OF GEORGIA, INC., a South Carolina
corporation (the "Tenant").
This Lease is executed and delivered in connection with that certain
Acquisition Agreement and Plan of Reorganization by and among others Landlord;
Tenant; and UCI Medical Affiliates, Inc. dated as of February 9, 1998 (the
"Acquisition Agreement") related to the transfer of certain assets of MainStreet
by Tenant. In connection with the Acquisition Agreement, Tenant desires to lease
from Landlord the facility owned by Landlord located at 2362 Main Street,
Tucker, Georgia 30084, upon the terms and conditions set forth herein.
In consideration of these premises and the mutual promises below, and
for other good and valuable consideration, the receipt and legal sufficiency of
which is hereby acknowledged by the parties hereto, Landlord and Tenant agree as
follows:
1. Leased Premises. Landlord hereby leases, demises, and lets, to
Tenant, and Tenant hereby leases from Landlord, that certain premises and all
improvements thereon located at 2362 Main Street, Tucker, Georgia 30084, all as
more fully described on Schedule 1 attached hereto (collectively the
"Premises"), upon the terms, covenants, and conditions hereinafter contained.
2. Term. The term of this Lease shall be ten (10) years commencing on
April 1, 1998, and terminating on March 31, 2008, unless earlier terminated as
provided herein.
3. Rent.
A. Subject to Section 22 below, commencing on April 1, 1998
and continuing though March 31, 2003, the Tenant shall pay to the Landlord an
annual rental of Fifty-Seven Thousand Six Hundred and No/100 ($57,600.00)
Dollars, in monthly installments of Four Thousand Eight Hundred and No/100
($4,800.00) Dollars, on the first (1st) day of each month, payable in advance
during the term of this Lease in lawful money of the United States, addressed to
Landlord at Landlord's address set forth in Section 43 herein.
B. Subject to Section 22 below, commencing on April 1, 2003
and continuing though the end of the term of this Lease, the Tenant shall pay to
the Landlord an annual rental of Sixty-One Thousand Two Hundred and No/100
($61,200.00) Dollars, in
Lease And Option Agreement
And Right of First Refusal
Page 1
<PAGE>
monthly installments of Five Thousand One Hundred and No/100 ($5,100.00)
Dollars, on the first (1st) day of each month, payable in advance during the
term of this Lease in lawful money of the United States, addressed to Landlord
at Landlord's address set forth in Section 43 herein.
4. Utilities. Tenant shall pay throughout the term of this Lease, all
charges for air conditioning, heat, water, sewer, janitor, garbage collection,
security, gas, electricity, light, telephone, or any other communication or
utility service used in or rendered or supplied to the Premises through the term
of this Lease. Such items shall be prorated for periods outstanding at the
commencement or the termination of this Lease. Tenant shall make such payments
directly to the intended recipient thereof. Upon receipt of the actual bill for
such period, the party receiving such bill shall promptly forward same to the
other party and Landlord and Tenant shall then make such adjustment and payment
as shall be required to make such proration accurate.
5. Real Estate Taxes. Landlord shall promptly pay all taxes and
assessments of every kind or nature which are now or may hereafter be imposed or
assessed upon the Premises by federal, state, or local government authority.
Tenant shall be entitled, but shall have no obligation, to pay any taxes or
assessments not promptly paid by Landlord as required above, in which case
Tenant may elect that the amount of such payment be either (i) deducted by
Tenant from the rent hereunder after notice of such payment is given by Tenant
to Landlord, or (ii) reimbursed to Tenant by Landlord within ten (10) days after
notice of such payment is given by Tenant to Landlord.
6. Insurance on Building. Landlord shall at all times during the term
of this Lease maintain and shall pay all premiums for the fire and hazard
insurance on the building constituting a portion of the Premises for not less
than the replacement cost thereof.
7. Other Insurance Coverage. Tenant shall at all times maintain the
following insurance coverage respecting the Premises and its business operations
thereon: public liability insurance for personal injury and property damage;
workers' compensation insurance required by South Carolina law; hazard insurance
on all contents and property of Tenant at the Premises and all property of other
persons temporarily stored at the Premises; and such other insurance coverages
required by this Lease or as are customarily carried on businesses such as that
to be conducted by Tenant at the Premises.
8. Condition of Premises. Landlord shall, at its own expense, keep the
Premises in good repair and shall make any and all necessary repairs and
replacements to the Premises.
9. Hazardous Substance Remediation. Notwithstanding anything contained
herein to the contrary, Tenant shall not be required to remediate, purge or
remove, or bear the cost of such remediation, purge or removal of, any hazardous
substance which contaminated the Premises prior to the commencement of the term
of this Lease or which existed at the
Lease And Option Agreement
And Right of First Refusal
Page 2
<PAGE>
commencement of the term of this Lease and worsened through no fault of Tenant
thereafter. In addition, Tenant shall not be obligated to take actions to
prevent such worsening of contamination which existed at the commencement of
this Lease. Landlord shall indemnify Tenant and hold Tenant and its officers and
agents harmless from any and all liability, claim, injury, damage, penalty, or
cost, (including reasonable attorney's fees) arising out of third party claims
or assertions resulting from any hazardous substances existing on the Premises
as of the effective date of this Lease.
10. Americans With Disabilities Act. Notwithstanding any term or
provision to the contrary contained herein, the Landlord, at Landlord's sole
cost and expense, shall ensure that the Premise and improvements thereon shall
be in material compliance with the Americans With Disabilities Act, as the same
is amended from time to time (the "Act"). Tenant shall not be required to make
any alterations or additions to the Premises (both structural and
non-structural) that may be necessary from time to time to keep or bring the
Premises in compliance with the Act.
11. Alterations. Tenant shall not make, or suffer to be made, any
alterations of the Premises, or any part thereof, without the written consent of
Landlord, which consent shall not be unreasonably withheld.
12. Entry by Landlord. Landlord shall have the right to enter the
Premises at reasonable times, for the purpose of inspection, posting notices or
supervising any necessary repairs and maintenance required hereto to be
performed by Landlord, upon reasonable written notice to Tenant.
13. Signs and Parking. Tenant shall have the exclusive right to use the
parking area which is part of the Premises. Tenant, at its discretion, may erect
such signs as it deems necessary or appropriate, so long as the same comply with
applicable laws and zoning restrictions.
14. Assignment and Subletting. Tenant shall have the right to make
subleases of all or any portion of the Premises and any permitted sublessee may
use the same for any lawful purpose permitted by this Lease, so long as Tenant
shall agree in writing to remain liable hereunder as though no subleases had
been made, unless Landlord acknowledges in writing that Tenant shall not remain
liable hereunder. Subject to Tenant's right to approval any assignee which will
not be unreasonably withheld, Landlord may assign this Lease and all rights
hereunder provided Tenant's use and enjoyment of the Premises during the term of
this Lease is not disturbed. Tenant shall be entitled to assign this Lease to
any corporation controlled by or under common control with Tenant, or in
connection with the acquisition of, or the sale of substantially all of, the
assets of Tenant. Landlord shall have the right to approval any purchaser of the
Premises, which approval shall not be unreasonably withheld.
Lease And Option Agreement
And Right of First Refusal
Page 3
<PAGE>
15. Default of Tenant. The occurrence of any of the following events
shall constitute a breach of this Lease:
A. The failure of Tenant to pay rent or to make any other
payment of money as herein required when due for a period of ten (10) days after
delivery by Landlord of a written notice to Tenant of any such failure.
B. The expiration of a period of sixty (60) days following (I)
the adjudication of Tenant as a bankrupt by any court of competent jurisdiction,
(II) the entry of an order approving a petition filed by one other than Tenant,
seeking reorganization of Tenant under the National Bankruptcy Act or any other
applicable law of the United States or of any State, or (III) the appointment of
a trustee or receiver of all or substantially all of the business or property of
Tenant, or (IV) the levy of any attachments, execution or garnishment upon the
interest of Tenant hereunder, or upon the leasehold estate hereby created,
unless during such period such adjudication, order or appointment of a receiver
or trustee, attachment, execution or garnishment shall be vacated or unless
within such period Tenant shall have taken proper action to vacate such
adjudication, order or appointment of a receiver or trustee, attachment,
execution or garnishment, and in such event such occurrence shall not constitute
a breach of this Lease until final adjudication of the matter.
C. The filing by Tenant of a voluntary petition in bankruptcy
or the making of an assignment for the benefit of creditors, the consenting by
Tenant to the appointment of a receiver or trustee of all or any part of its
property, the filing by Tenant of a petition or answer seeking reorganization
under the National Bankruptcy Act or any other applicable law, or the filing by
Tenant of a petition to take advantage of any insolvency act.
D. The failure of Tenant to correct any default hereunder,
other than those specified in subdivisions (A), (B), and (C) of this Section 15
within thirty (30) days after delivery by Landlord to Tenant of a written notice
of such default, or if the default is of such a nature that it cannot be
corrected within thirty (30) days, then the failure of Tenant within such period
to commence and thereafter proceed diligently to cure such default.
If any of the above-mentioned events of default shall occur,
the Landlord at its option may re-enter and take possession of the Premises, and
at its option terminate this Lease and accelerate all payments due or coming due
hereunder.
16. Default of Landlord. If at any time during the term hereof
MainStreet or Landlord shall default in any of their respective obligations
under this Lease and/or the Acquisition Agreement, Tenant may give written
notice to Landlord of its intention to terminate the Lease together with a
statement of the nature of such default, and such termination shall become
effective on the thirtieth (30th) day after the date of such notice unless (a)
such default shall be cured within thirty (30) days after such notice, or (b) if
the default is of such a nature that it cannot be cured within such period, the
necessary steps to
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cure such default are duly commenced within such period and are thereafter
diligently pursued. Notwithstanding anything contained herein to the contrary,
in the event Landlord breaches this Lease, the Acquisition Agreement, or any
document or instrument ancillary thereto 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 Landlord of this Lease.
17. Holding Over. In case Tenant holds over after the end of any term
herein provided, such tenancy shall be from month to month only, and not a
renewal hereof; subject, however, to every other term, covenant and condition of
this Lease, and the rent shall be at the monthly rate of the last year of the
lease term.
18. Damage or Destruction. The damage or destruction of the
improvements now existing on the Premises in whole or in part by fire or other
cause, or such material injury thereto shall at the option of Tenant, exercised
by notice to Landlord, within thirty (30) days after the date of such damage,
destruction or unavailability, produce and work a termination of this Lease.
Upon damage or destruction of the Premises in whole or in part, by fire or any
other cause, if Tenant shall not exercise its option to terminate this Lease
within such thirty (30) days, Landlord shall at its expense promptly restore the
Premises to the condition they were in immediately prior to such damage.
Notwithstanding anything contained herein to the contrary, the rent shall abate
during the period said Premises are untenantable.
19. Condemnation. If any portion of the Premises shall be taken or
condemned by any competent authority for any public or quasi-public use or
purpose so as to render the remaining portion of the Premises unsuited for
Tenant's reasonable uses, even though the entire Premises be not so taken or
condemned, then Tenant, at any time thereafter, shall have the right to
terminate this Lease. Upon the termination of this Lease as herein provided,
Tenant shall be entitled to a refund of all rents paid in advance from the date
of termination to the date through which the rent shall have been paid. Tenant
hereby waives any and all rights to participate in the proceeds of any award
made in any condemnation proceedings for the taking of the Premises, or any
portion thereof, except the right to participate in Tenant's equitable portion
of any proceeds for the loss of Tenant's business at such location, if any.
20. Quiet Enjoyment. Landlord agrees and warrants that Tenant, keeping
and performing the covenants herein contained on the part of Tenant to be kept
and performed, shall at all times during the term of this Lease peaceably and
quietly have, hold and enjoy the Premises.
21. Removal of Trade Fixtures / Related Leases. Upon the termination of
the Lease, all trade fixtures, furniture, equipment and other personal property
which Tenant placed upon the Premises may be removed by Tenant, provided Tenant
shall otherwise leave the Premises in reasonable condition.
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22. Set Off. Anything contained in this Lease to the contrary
notwithstanding, Tenant shall have the right of set off and recoupment against
amounts coming due hereunder in the event that Landlord breaches this Lease. In
the event Tenant elects to exercise the right of set off and recoupment set
forth herein, upon notice to Landlord the rental hereunder shall be deemed
reduced by the amount of any set off or recoupment to which the Tenant is
entitled. Landlord's right to lawfully contest such set off or recoupment in any
action to collect rental hereunder shall not be impaired by Tenant's exercise of
such set off or recoupment rights. The inclusion of this special set off or
recoupment provision shall not affect the availability, if any, of rights of set
off or recoupment arising at law or in equity.
23. Subject to Acquisition Agreement. This Lease is made, executed and
delivered in connection with the Acquisition Agreement, and is subject to all
the terms, provisions, and conditions thereof. To the extent of any conflict
between the terms hereof and thereof, the terms of the Acquisition Agreement
shall be controlling.
24. Representations and Warranties of Landlord. Landlord hereby
warrants, represents, and covenants as follows:
A. Authority. Landlord has taken all action necessary to
approve and authorize the execution of this Lease, and to consummate the
transactions contemplated hereby. When executed and delivered, this Lease shall
constitute valid and binding obligations of Landlord, enforceable in accordance
with its terms and conditions except as enforcement may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditors rights generally and
by principles of equity. Neither the execution nor the delivery of this Lease
nor the consummation of the transactions contemplated hereby, nor compliance
with all of the terms and conditions hereof, will result in the breach by
Landlord of any of the terms, conditions or provisions of any trust, order,
judgment, law, or other contract, agreement or instrument to which he is a
party, or by which he is bound, or constitute a default of such indenture,
mortgage, deed of trust, order, judgment, law, or other contract, agreement or
instrument.
B. Title to Premises. Upon execution and delivery of this
Lease, Landlord will have good, marketable and insurable title to the Premises,
and 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 Premises for which any such person or entity could claim a lien against
the Premises.
C. Consents. No consent of any third party which has not been
obtained is required in connection with Landlord's lease of the Premises
hereunder, including but not limited to the consent of any financial
institution.
D. Litigation. There are no judicial or administrative actions
or proceedings pending, or to the best of Landlord's knowledge threatened, that
question the
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validity of this Lease or any transaction contemplated hereby or that relate to
the Premises, including but not limited to condemnation or bankruptcy
proceedings, which if adversely determined would have an adverse affect upon
Landlord's ability to enter into this Lease or perform its obligations hereunder
or upon the use, enjoyment, or value of the Premises for Tenant.
E. Zoning. The Premises is currently zoned for commercial
operations and is in compliance with applicable zoning laws and ordinances; and
Landlord does not know that the status of such zoning is in question or subject
to change by the appropriate governmental authorities.
F. Environmental. The Premises is not now used and, to the
best of Landlord's knowledge, has never been used for the underground storage of
petroleum products, or as a garbage or refuse dump site, a landfill, a waste
disposal facility for the storage, processing, treatment or temporary or
permanent disposal of regulated waste materials, including without limitation
solid, industrial, toxic, hazardous, radioactive, nuclear or putrescible waste
or sewage, and, to the best of Landlord's knowledge, is in substantial
compliance with applicable environmental laws.
25. Representations and Warranties of Tenant. Tenant hereby represents,
warrants, and covenants as follows:
A. Organization and Good Standing. Tenant 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. Tenant has taken all corporate action necessary to approve and
authorize the execution of this Lease, and to consummate the transactions
contemplated hereby. When executed and delivered, this Lease shall constitute
valid and binding obligations of Tenant, 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 Lease nor
the consummation of the transactions contemplated hereby, nor compliance with
all of the terms and conditions hereof, will result in the breach by Tenant of
any of the terms, conditions or provisions of any trust, order, judgment, law,
or other contract, agreement or instrument to which it is a party, or by which
it is bound, or constitute a default of such indenture, mortgage, deed of trust,
order, judgment, law, or other contract, agreement or instrument.
B. Consents. No consent of any third party is required in
connection with the lease of the Premises hereunder.
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C. Litigation. There are no judicial or administrative actions
or proceedings pending, or to the best of Tenant's knowledge threatened, that
question the validity of this Lease or any transaction contemplated hereby.
26. Rights of First Refusal. Landlord grants Tenant the right, at
Tenant's option, to purchase the Premises at the same price and upon the same
terms and conditions of any bona fide offer for the purchase thereof which
Landlord shall at any time during the term of this Lease be ready and willing to
accept. Landlord shall give Tenant written notice of all of the terms and
conditions of any such bona fide offer and Tenant shall have thirty (30) days
from and after the receipt of such notice in which to exercise its option to
purchase the Premises by giving written notice to Landlord. Such exercise of
said option to purchase the Premises shall create a binding agreement between
Landlord and Tenant for the sale and purchase of the Premises upon the same
terms and conditions contained in the bona fide offer. The right granted to
Tenant in this Section 26 shall be continuing until the lawful termination of
this Lease, and Tenant's failure to exercise such right with respect to any bona
fide offer shall not affect its rights as to any subsequent offers received by
Landlord or Landlord's heirs, successors, assigns, or legal representatives. In
the event Tenant should fail to exercise its right of first refusal option in
any instance, Landlord shall then be free to sell the Premises in accordance
with the offer of the prospective purchaser (or to any other purchasers upon
substantially the same terms) and to convey the Premises to such purchaser,
subject to the terms and conditions of this Lease; provided, however, that such
sale must be consummated within ninety (90) days after receipt by Tenant of
written notice of the terms and conditions of the offer. Tenant's rights under
this Section may be assigned to any person or entity controlling, controlled by,
or under common control with, Tenant. Tenant's failure to exercise its rights
under this Section shall not terminate this Lease nor extinguish Tenant's rights
or obligations under this Lease. Notwithstanding the foregoing, the Tenant shall
not have a right of first refusal in connection with the transfer of title to
the Premises from Landlord to A. Wayne Johnson.
27. Binding Effect. This Lease shall inure to the benefit of the heirs,
successors, representatives, and permitted assigns of the parties hereto, and
shall bind the heirs, successors, representatives, and assigns of the parties
hereto.
28. References to Gender and Number Terms. Whenever the context
requires, the singular number shall include the plural, the plural the singular,
and the use of any gender shall include all genders.
29. Days Defined. Any reference in this Lease to a number of days shall
mean calendar days unless otherwise expressly provided.
30. Attorney's Fees. If any action at law or in equity shall be brought
to recover any rent under this Lease, or for or on account of any breach of or
to enforce or interpret any of the covenants, terms or conditions of this Lease,
or for the recovery of the possession of the
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Premises, the prevailing party shall be entitled to recover from the other party
as part of the prevailing party's cost a reasonable attorney's fee, the amount
of which shall be fixed by the court and shall be made a part of any judgment
rendered.
31. Headings. The headings of the paragraphs of this Lease are for
convenience or reference only and are not a part of this Lease.
32. Modifications. This Lease can only be modified by a written
agreement duly signed by authorized representatives of each party hereto.
Moreover, in order to avoid uncertainty, ambiguity and misunderstandings in
their relationships, the parties hereto covenant and agree not to enter into any
oral agreement or understanding inconsistent or in conflict with this Lease; and
the parties hereto further covenant and agree that any oral communication
allegedly or purportedly constituting such an agreement or understanding shall
be absolutely null, void and without effect.
33. Waiver. Any waiver by either party of any breach or any term or
condition hereof shall be effective only if in writing and such writing shall
not be deemed to be a waiver of any subsequent or other breach, term or
condition of this Lease.
34. Relationship of the Parties. Nothing herein shall be deemed to
create any partnership, joint venture, or agency relationship between the
parties. Neither party shall make any representation or statement (whether oral
or written) to any person or entity inconsistent with this paragraph.
35. Third Parties. The provisions of this Lease are not intended to be
for the benefit of any third parties, and no third party shall be deemed to have
any privity of contract with either of the parties hereto by virtue of this
Lease.
36. Time of Essence. The parties acknowledge and agree that time is of
the essence in the performance of this Lease.
37. Severability. If any provision or provisions of this Lease shall be
held to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
38. Governing Law. The construction and interpretation of this Lease
shall at all times and in all respects be governed by the laws of the State of
South Carolina.
39. Venue and Jurisdiction. The parties hereto hereby (i) agrees that
any litigation, action or proceeding arising out of or relating to this Lease
may be instituted in a state or federal court in the County of Richland, State
of South Carolina, (ii) waives any objection which it might have now or
hereafter to any such litigation, action or proceeding based upon improper venue
or inconvenient forum, and (iii) irrevocably submits to the jurisdiction of such
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courts in any such litigation, action or proceeding. For all purposes of this
Lease, the parties hereto irrevocably consents to personal jurisdiction of such
courts, and further agrees that service of process upon such party may be
effected pursuant to the United States mail.
40. No Inference Against Author. No provision of this Lease shall be
interpreted against any party because such party or its legal representative
drafted such provision.
41. Entire Lease. This Lease constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
contemporaneous written or oral agreements and representations between the
parties with respect thereto.
42. Recordation. This Lease or a memorandum hereof may be recorded by
either party. The parties agree to execute for recording purposes any such
memorandum.
43. Notices. Any notice, request, approval, consent, demand or other
communication shall be effective upon the first to occur of the following: (i)
upon receipt by the party to whom such notice, request, approval, consent,
demand or other communication is being given; or (ii) three (3) business days
after being duly deposited in the United States mail, certified or registered,
return receipt requested, and addressed as follows:
Landlord: MainStreet Healthcare Corporation
2370 Main Street
Tucker, GA 30084
Tenant: UCI Medical Affiliates of Georgia, Inc.
1901 Main Street, Suite 1200
Columbia, SC 29201
Attn.: Jerry F. Wells, Jr.
The parties hereto may change their respective addresses by notice in writing
given to the other party to this Lease.
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IN WITNESS WHEREOF, the parties hereto have executed this Lease this
31st day of March, 1998, to be effective as of April 1, 1998.
IN THE PRESENCE OF: LANDLORD:
MAINSTREET HEALTHCARE
CORPORATION
_________________________ By:_________________________________
(Witness as to Landlord) Its:____________________________
_________________________
(Witness as to Landlord)
TENANT:
UCI MEDICAL AFFILIATES OF GEORGIA,
INC.
_________________________ By:_________________________________
(Witness as to Tenant) Jerry F. Wells, Jr.
Its: Chief Financial Officer
_________________________
(Witness as to Tenant)
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STATE OF SOUTH CAROLINA )
) PROBATE
COUNTY OF RICHLAND )
PERSONALLY appeared before me the undersigned witness and made oath
that s/he saw the within-named MainStreet Healthcare Corporation by its sign,
seal, and as his act and deed, deliver the within-written instrument for the
uses and purposes therein mentioned, and that s/he with the other witness whose
signature appears above, witnessed the execution thereof.
______________________________
WITNESS
SWORN TO before me this
31st day of March, 1998.
___________________________________________(L.S.)
Notary Public for South Carolina
My Commission Expires:_____________________
STATE OF SOUTH CAROLINA )
) PROBATE
COUNTY OF RICHLAND )
PERSONALLY appeared before me the undersigned witness and made oath
that s/he saw the within-named UCI Medical Affiliates of Georgia, Inc., by Jerry
F. Wells, Jr., its Chief Financial Officer, sign, seal, and as its act and deed,
deliver the within-written instrument for the uses and purposes therein
mentioned, and that s/he with the other witness whose signature appears above,
witnessed the execution thereof.
______________________________
WITNESS
SWORN TO before me this
31st day of March, 1998.
___________________________________________(L.S.)
Notary Public for South Carolina
My Commission Expires:_____________________
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SCHEDULE 1
LEGAL DESCRIPTION OF THE PREMISES
ALL THAT TRACT OR PARCEL OF LAND lying and being in Land Lot 213 of the
18th District of DeKalb County, Georgia, being more particularly
described as follows:
BEGINNING at an iron pin on the southwesterly side of Main Street
(Third Street), (based on an 80-foot right-of-way), 50 feet
northwesterly as measured along the southwesterly side of Main Street
from the intersection form by the southwesterly side of Main Street and
the northwesterly side of First Avenue; thence southwesterly 213.4 feet
to an iron pin on the northeasterly side of a 20-foot alley; thence
northwesterly along the northeasterly side of said alley 85 feet to an
iron pin; thence northeasterly 214.7 feet, more or less, to an iron pin
on the southwesterly side of Main Street; thence southeasterly along
the southwesterly side of Main Street 86.5 feet to the iron pin and the
TRUE POINT OF BEGINNING. Being improved properly known as 2362 Main
Street, Tucker, according to the present system of numbering houses in
DeKalb County, Georgia.
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Exhibit 8.3.23
Certified List of MainStreet Security Holders
[See Attached]
<PAGE>
CERTIFIED LIST OF MAINSTREET SECURITY HOLDERS
PERSONALLY appeared before me ROBERT G. RIDDETT, JR. and A. WAYNE
JOHNSON who first being duly sworn, depose and say that:
1. Robert G. Riddett, Jr. and A. Wayne Johnson are the President and
Secretary, respectively, of MainStreet Healthcare Corporation ("MainStreet"),
and as such have access to, and knowledge of, the business records of
MainStreet.
2. The identity of the holders of the securities of MainStreet, and a
description of such holdings, as of March 31, 1998, is set forth on Schedule A
attached hereto.
3. This Certified List of Mainstreet Security Holders is being
delivered to UCI Medical Affiliates of Georgia, Inc. ("UCI of GA") pursuant to
Section 8.3.23 of that certain Acquisition Agreement and Plan of Reorganization
by and between among others UCI of GA and MainStreet, dated February 9, 1998
(the "Acquisition Agreement"), and may be relied upon by UCI of GA.
4. Capitalized terms used and not otherwise defined herein shall have
the respective meanings ascribed to them in the Acquisition Agreement.
Executed as of the 31st day of March, 1998.
_________________________________
Robert G. Riddett, Jr., President
_________________________________
A. Wayne Johnson, Secretary
Sworn to me this
31st day of March, 1998
_______________________
Notary Public For__________________
My Commission Expires:___________
<PAGE>
SCHEDULE A
List of Security Holders
Exhibit 8.4.2
Form of Registration Rights Agreement
[See Attached]
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is entered into
as of March 31, 1998 among UCI Medical Affiliates, Inc., a Delaware corporation
(the "Company"); MainStreet Healthcare Corporation, a Delaware corporation
("MainStreet"); Frank Corker, M.D. ("Corker"); Michael J. Dare ("Dare"); David
Ellis, D.O. ("Ellis"); Pamela K. Erdman, M.D. ("Erdman"); Harold Holloway, M.D.
("Holloway"); Laykoon Huang, M.D. ("Huang"); A. Wayne Johnson ("Johnson"); Izhak
Oliver, M.D. ("Oliver"); PENMAN Private Equity and Mezzanine Fund, L.P., a
Delaware limited partnership ("Penman"); Richard Petit, P.A. ("Petit"); Practice
Acquisition Consultants, Inc., a corporation ("PAC"); and Robert G. Riddett, Jr.
("Riddett"). Corker, Dare, Ellis, Erdman, Holloway, Huang, Johnson, Oliver,
Penman, Petit, PAC and Riddett are hereinafter collectively known as the
"Mainstreet Shareholders".
RECITALS
This Agreement is made pursuant to that certain Acquisition Agreement
and Plan of Reorganization dated as of February 9, 1998 among the Company; UCI
Medical Affiliates of Georgia, Inc.; Mainstreet; MainStreet Healthcare Medical
Group, P.C.; MainStreet Healthcare Medical Group, PC; Prompt Care Medical
Center, P.C.; Johnson; Penman; Riddett; and Dare (the "Acquisition Agreement").
In order to induce the Holders, respectively, to enter into the Acquisition
Agreement and to accept shares of the Company's common stock as provided in the
Acquisition Agreement, the Company has agreed to provide the registration rights
set forth in this Agreement. In order to induce the Company to provide the
registration rights set forth in this Agreement and to issue shares of its
common stock to the Holders pursuant to the Acquisition Agreement, the Holders
have agreed to provide the covenants set forth in this Agreement.
In consideration of the foregoing premises, the mutual promises of the
parties contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
TERMS OF AGREEMENT
1. Definitions. The following terms not otherwise defined shall have
the meanings ascribed to them below:
1933 Act shall mean the US Securities Act of 1933, as amended, and all
rules and regulations promulgated thereunder.
Demand Right shall mean the right of a Demand Percentage of the Holders
to make one (1) demand for registration of the Registrable Shares as described
in Section 2 of this Agreement.
Demand Percentage of the Holders shall mean the Holder or Holders at
the relevant time of more than twenty percent (20%) of the number of Registrable
Shares issued to the Holders in the aggregate upon the closing of the
Acquisition Agreement.
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Holder shall mean any one of Mainstreet, Corker, Dare, Ellis, Erdman,
Holloway, Huang, Johnson, Oliver, PAC, Penman, Petit, and Riddett, and Holders
shall mean collectively two or more of Mainstreet, Corker, Dare, Ellis, Erdman,
Holloway, Huang, Johnson, Oliver, PAC, Penman, Petit, and Riddett and their
respective successors and permitted assigns, if any.
Piggy-Back Registration shall mean the right of the Holders to
participate as selling shareholders for the Registrable Shares in a public
offering registered with the SEC under the 1933 Act by the Company as described
in Section 3 of this Agreement.
Registrable Shares shall mean the shares of the Company's common stock
issued to the Holders pursuant to the Acquisition Agreement.
SEC shall mean the United States Securities and Exchange Commission.
Termination Date shall mean the first to occur of: (i) the first (1st)
anniversary of the date hereof, or (ii) the expiration of the holding period
applicable to resale by the Holders of the Registrable Shares under SEC Rule
144(d), as amended, or (iii) the registration of all the Registrable Shares.
All capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Acquisition Agreement.
2. Demand Registration Rights. The Company shall provide to the Holders
demand registration rights for the Registrable Shares upon the following terms
and conditions:
(a) If on or before the Termination Date the Company receives
written demand from a Demand Percentage of the Holders requesting that all or a
portion of the Registrable Shares then held by them be registered pursuant to
this Section 2(a), then subject to the limitations set forth herein and provided
that the Company has not previously provided written notice to the Holders
pursuant to Section 3(a) specifying the Company's election to file a
registration statement, the Company shall within sixty (60) days following the
Company's receipt of such written demand, prepare and file with the SEC a Form
S-3 registration statement (or such other available form of registration
statement selected by the Company) as a "shelf" registration under Rule 415 (to
the extent available for use in such registration) under the 1933 Act governing
and permitting the resale to the public of the Registrable Shares then held by
such Holders and included in such written demand, and shall use its reasonable
best efforts to cause such registration statement to become effective and to
maintain the effectiveness of such registration statement for a period of nine
(9) calendar months after the initial effective date of such registration
statement. The Company shall use its best efforts to register or qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such United States jurisdictions (not exceeding ten (10) in the
aggregate) as shall be reasonably requested by the Holders; provided that the
Company shall not be required in connection therewith or as a condition thereto
to qualify to do business or to file a general consent to service of process in
any such states or jurisdictions and further provided that (anything herein to
the contrary notwithstanding with respect to the bearing of expenses) if any
jurisdiction in which the Registrable Shares shall be qualified shall require
that expenses incurred in connection with the qualification therein of the
Registrable Shares be borne by selling shareholders, then such expenses shall be
payable by the Holders pro rata to the extent required by such jurisdiction. In
connection with any registration effected pursuant to this Section 2(a), the
Company shall apply for listing and use its best efforts to list
REGISTRATION RIGHTS AGREEMENT
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the Registrable Shares being registered on any national securities exchange on
which the Company's common stock is listed, or if the Company's common stock is
not listed on a national securities exchange, apply for qualification and use
its best efforts to qualify the Registrable Shares being registered for
inclusion on the automated quotation system of the National Association of
Securities Dealers, Inc.
(b) The Holders collectively shall be entitled to exercise the
Demand Right only one (1) time in the aggregate, and the number of Registrable
Shares subject to such Demand Right must not be fewer than the lesser of (i)
50,000 shares or (ii) all the Registrable Shares then held by such Holders. In
the event that a Demand Percentage of the Holders exercise the Demand Right, all
the Holders then holding Registrable Shares shall be given a reasonable
opportunity (upon not less than ten (10) days notice) to elect to participate in
such registered offering. The exercise of a Demand Right by any one or more of
the Holders shall eliminate the availability of such Demand Right as to all
Holders. In the event the Holders enter into an underwriting or similar
agreement with an underwriter selected by the Holders of Registrable Shares in
connection with such Holders' exercise of such Demand Right, then subject to the
limitations set forth in this Section 2(b), the Company hereby agrees to
cooperate with such underwriter, including entering into an agreement with the
managing underwriter of such offering (in usual and customary form applicable to
an issuer in an underwritten secondary offering of such issuer's securities held
solely by selling shareholders) and delivering applicable opinions of counsel
and accountant's comfort letters as may be reasonably requested by such managing
underwriter; provided: (a) such cooperation does not prohibit or in any way
limit the Company's use of a Form S-3 registration statement in connection with
the Holders' exercise of such Demand Right; (b) such cooperation does not
violate any applicable state or federal law or regulation, including without
limitation the rules and regulations of the SEC, (c) such underwriting is a
"firm commitment" underwriting and not a "best efforts" underwriting, and (d)
the Holders pay all costs, expenses, and commissions of such underwriter and any
costs reasonably incurred by the Company as a consequence of the Company being a
party to any agreement with, or making any representation or warranty to, such
underwriter (including the costs of any attorney fees incurred in connection
with the negotiation with any such underwriter or in connection with any
opinion(s) of counsel reasonably requested by such underwriter or any costs and
expenses relating to accountants' comfort letters).
(c) Notwithstanding the foregoing, with respect to any demand
made pursuant to Section 2(a) that is received by the Company more than thirty
(30) days following the date of this Agreement
(i) if the Company shall furnish to the Holders requesting to exercise
the Demand Right a certificate signed by the president of the Company
stating that in the good faith judgment of the Board of Directors, it
would be seriously detrimental to the Company and its stockholders for
such registration statement to be filed at the date filing would be
required, and it is therefore essential to defer the filing of such
registration statement, the Company shall have an additional period of
not more than ninety (90) days within which to file such registration
statement; and
(ii) if the Company has begun in good faith to actively pursue the
possibility of registering certain of its securities, either for its
own account or the account of a security holder or holders, the Company
shall not be obligated to take any action to effect a registration
pursuant to Section 2(a) until one hundred twenty (120) days after the
effective date of the registration statement with respect to the
contemplated registration or the cessation by the Company of
discussions regarding a possible offering; provided, however, that
should the Company's
REGISTRATION RIGHTS AGREEMENT
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obligation under Section 2(a) be suspended pursuant to the terms of
this Section 2(c) by virtue of the commencement by the Company of
discussions regarding a possible offering, such suspensions shall be
effective for no more than ninety (90) days unless within such ninety
(90) days the Company has filed a registration statement with respect
to such offering.
(d) Should any registration effected hereunder be terminated
or withdrawn prior to its effectiveness as a consequence of the action or
inaction of the Holders requesting such registration or pursuant to an agreement
between the Company and the Holders requesting such registration with respect to
the Registrable Shares, the Company shall be deemed to have satisfied its
obligations hereunder and shall have no further obligation to effect any
registration hereunder; provided however, that to the extent the Holders
included in any registration statement withdrawn or terminated pursuant to this
Section 2(d) were not included in any earlier registration statement so
withdrawn or terminated, the Company shall not be deemed to have satisfied its
obligations hereunder to such Holders in the event such Holders immediately
reimburse the Company for all out-of-pocket costs and expenses incurred by the
Company in connection with such terminated or withdrawn registration.
(e) In the event MainStreet is the first Holder to exercise
the Demand Right, the Company agrees that in connection with such registration,
to the extent requested by MainStreet, the Company will prepare and file one (1)
post-effective amendment to the registration statement filed in such
registration for the sole purpose of including as a selling shareholder any
Holder of Registrable Shares whose shares were not included in such registration
statement as initially declared effective, provided that such request for such
post-effective amendment from MainStreet is made following the effective date of
such registration statement and on or before the date six (6) months following
the date of this Agreement, and provided further that any Holder included in any
such amendment pays all costs incurred by the Company in connection with the
printing and distribution of any offering documentation made necessary in
connection with such amendment.
3. Piggy-Back Registration Rights. The Company shall provide to the
Holders piggy-back registration rights for the Registrable Shares upon the
following terms and conditions:
(a) If on or before the Termination Date the Company elects to
file a registration statement to register for public offering any shares of its
common stock of the same class as the Registrable Shares in an underwritten
public offering, the Company shall provide the Holders who then hold Registrable
Shares with not less than twenty (20) days prior written notice of the proposed
date of filing of such registration statement. Within ten (10) days after
receiving notice of the proposed registration, the Holders who then hold
Registrable Shares can elect to be selling shareholders and include their
Registrable Shares, or any portion thereof, in such offering (a "Piggy-Back
Registration"), subject to the restrictions set forth herein, in the 1933 Act,
and in the rules and regulations promulgated by the SEC. The Company will not be
obligated or required to give such notice or to include any Registrable Shares
in any registration effected solely to implement an employee benefit or similar
qualified or non-qualified stock option plan (e.g., a Form S-8 registration
statement) or a merger or other transaction to which SEC Rule 145 or the
equivalent is applicable (e.g., a Form S-4 registration statement). In any
underwritten Piggy-Back Registration, the Company shall have the exclusive right
to select the investment bankers and managing underwriters for such registered
offering and to negotiate the underwriting or similar agreement. The Company may
at any time and from time to time, without the consent of any Holder, delay,
suspend, abandon or withdraw any Registration Statement described in this
Section 3(a) and any related, proposed or actual offering or other distribution
in which any Holder has requested inclusion of such Holder's Registrable Shares
pursuant to this Section 3(a).
REGISTRATION RIGHTS AGREEMENT
PAGE 4
<PAGE>
(b) In connection with any offering involving an underwriting
of shares being issued by the Company, the Company shall not be required under
this Section 3 to include any of the Registrable Shares in such underwriting
unless the Holders accept the terms of the underwriting as agreed upon between
the Company and the underwriter selected by the Company and all other
shareholders participating in such offering, and then only in such quantity as
will not, in the written opinion of the underwriter, jeopardize the success of
the offering by the Company; provided, however, that the underwriter may not
limit the amount of the Registrable Shares included in such registration and
underwriting to less than an amount equal to twenty percent (20%) of the amount
of all the Company's securities included within such registration and
underwriting.
4. Other Obligations Regarding Registration.
(a) Subject to Section 2(b), Section 2(e) and Section 7, all
expenses (excluding any underwriter or selling agent's discounts and commissions
applicable to Registrable Shares sold by the Holders) incurred in connection
with any registration pursuant to this Agreement shall be borne by the Company;
provided, however, that the Company shall not be required to pay fees and costs
of legal counsel or other advisors for the Holders.
(b) The Company agrees that, in connection with any
registration statement required by this Agreement, it shall prepare and file
whatever pre-effective and post-effective amendments and whatever supplements or
revised prospectuses that the 1933 Act or SEC may require and that it shall
furnish to the Holders and their advisors a reasonable number of preliminary,
final, supplemental, and revised prospectuses required under the 1933 Act. The
Company hereby agrees to cooperate with the counsel for the Holders in
connection with the preparation and filing of any registration statement
required by this Agreement, including any amendments and supplements thereto.
5. Obligations of Holders.
(a) Each Holder of Registrable Shares proposed to be included
in any registration statement contemplated by this Agreement shall furnish to
the Company in writing such information as the Company may reasonably require
from such Holder, and otherwise reasonably cooperate with the Company in
connection with any registration statement with respect to such Registrable
Shares.
(b) The failure of any Holder of Registrable Shares proposed
to be included in any registration statement contemplated by this Agreement to
furnish any information or documents in accordance with any provision contained
in this Agreement shall not affect the obligations of the Company under this
Agreement to any remaining Holders who furnish such information and documents
unless in the reasonable opinion of counsel to the Company or the managing
underwriter, such failure impairs or may impair they viability of the offering
or the legality of the registration statement or the underlying offering.
(c) The Holders of Registrable Shares included in any
registration statement contemplated by this Agreement shall not (until further
notice) effect sales thereof after receipt of telegraphic or written notice from
the Company to suspend sales to permit the Company to correct or update such
registration statement or prospectus; but the obligations of the Company with
respect to maintaining any registration statement current and effective shall be
extended by a period of days equal
REGISTRATION RIGHTS AGREEMENT
PAGE 5
<PAGE>
to the period such suspension is in effect, and the Company shall use its best
efforts to lift such suspension.
(d) At the end of any period during which the Company is
obligated to keep any registration statement current and effective as provided
by Section 2 hereof (and any extensions thereof required by Section 5(c)), the
Holders of Registrable Shares included in such registration statement shall
discontinue sales of shares pursuant to such registration statement upon receipt
of notice from the Company of its intention to remove from registration the
shares covered by such registration statement which remain unsold, and such
Holders shall notify the Company of the number of shares registered which remain
unsold promptly after receipt of such notice from the Company.
(e) Each of the Holders, if the managing underwriters so
request in connection with any underwritten registration of the Company's
securities, shall not, without prior written consent of such underwriters,
effect any public sale or other distribution of any equity securities of the
Company, including any sale pursuant to SEC Rule 144, during the seven (7) days
prior to, and during the ninety (90) day period commencing on the effective date
of such underwritten registration, except in connection with such underwritten
registration. The Holders agree to execute and deliver such customary and
standard lock-up agreement as requested by the managing underwriters to
effectuate the foregoing restrictions, so long as the Company is not in default
under its obligations under this Agreement.
(f) No Holder may participate in any underwritten registration
pursuant to this Agreement unless such Holder (i) agrees to sell such Holder's
Registrable Shares on the basis provided in any underwriting arrangements
approved by the persons entitled under the provisions of this Agreement to
approve such arrangements, and (ii) completes, executes, and delivers all
questionnaires, powers of attorney, indemnities, custody agreements,
certificates, underwriting agreements, and other documents reasonably required
by the terms of such underwriting arrangements. Any Holder to be included in any
underwritten registration shall be entitled at any time to withdraw such
Registrable Shares from such registration prior to its effective date in the
event that such Holder shall disapprove of any of the terms of the related
underwriting agreement, but only if such Holder is permitted to do so by the
managing underwriters or pursuant to any agreement therewith.
(g) Each Holder acknowledges and agrees that to the extent
such Holder is the beneficial owner of five percent (5%) or more of the Common
Stock of the Company, or is a member of a "group" (as that term is defined in
the Securities Exchange Act of 1934) that beneficially owns five percent (5%) or
more of the Common Stock of the Company, the underwriter or underwriters
selected by the Company to facilitate the public distribution of the Company's
securities in a registered public offering may require as a condition to such
underwriter's obligation to the Company that such Holder or group deliver to
such underwriter an executed agreement or other undertaking pursuant to which
such Holder or group agrees, without the prior written consent of such
underwriter, not to offer, sell, transfer or otherwise dispose of any shares of
the Company's Common Stock in the public market for a designated period
following the closing of such registered offering, and that in such event, each
Holder hereby agrees to execute such agreement or undertaking as may be
reasonably requested by the underwriter(s), but only to the extent all other
beneficial owners of five percent (5%) or more of the then outstanding Common
Stock also execute such agreement.
REGISTRATION RIGHTS AGREEMENT
PAGE 6
<PAGE>
6. Indemnification.
(a) The Company shall indemnify the Holders, each of the
Holders' officers and directors, and each person controlling the Holders, and
each underwriter, if any, with respect to such registration effected pursuant to
Section 2 or 3 hereof, against all claims, losses, damages and liabilities (or
action in respect thereto) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any prospectus,
offering circular or other document (including any related registration
statement, notification or the like) incident to any such registration or based
on any omission (or alleged omission) to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or any violation by the Company of any rule or regulation promulgated under the
1933 Act applicable to the Company and relating to action or inaction required
of the Company in connection with any such registration, and will reimburse the
Holders, each of the Holders' officers and directors, and each person
controlling the Holders, for any legal and any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action, provided that the Company will not be liable in any
such case to the extent that any such claim, loss, damage or liability arises
out of or is based on any untrue statement or omission based upon information
furnished to the Company by the Holders or their respective agents in writing
for inclusion in the applicable registration statement.
(b) The Holders of Registrable Shares included in any
registration statement contemplated by this Agreement shall jointly and
severally indemnify the Company, each of its directors and officers, and each
underwriter, if any, of the Company's securities covered by such registration
statement, and each person who controls the Company within the meaning of the
1933 Act, against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, to the extent that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reasonable reliance upon information furnished to the
Company by the Holders in writing for inclusion in the registration statement
(provided that the Holders have been provided with the opportunity to review any
such registration statement prior to its effectiveness, and the Company has
responded to any comments of the Holders with respect to matters pertaining to
such Holders in the registration statement and such Holders have expressed their
satisfaction with such response(s)), or any violation by the Holders of any rule
or regulation promulgated under the 1933 Act applicable to the Holders and
relating to any action or inaction required of the Holders in connection with
any such registration, and will reimburse the Company, such directors, officers,
persons or underwriters for any legal or any other expenses reasonably incurred
in connection with investigating or defending any such claim loss damage,
liability or action; provided, however, that the indemnity agreement contained
in this subsection shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Holder, which consent shall not be unreasonably withheld,
nor, in the case of a sale directly by the Company of its securities (including
a sale of such securities through any underwriter retained by the Company to
engage in a distribution solely on behalf of the Company), shall the Holder be
liable to the Company in any case in which such untrue statement or alleged
untrue statement or omission or alleged omission was contained in a preliminary
prospectus and corrected in a final or amended prospectus, and the Company
failed to deliver a copy of the final or amended prospectus at or prior to the
confirmation of the of the securities to the person asserting any such loss,
claim, damage or liability in any case where such delivery is
REGISTRATION RIGHTS AGREEMENT
PAGE 7
<PAGE>
required to be made by the Company by the 1933 Act. Notwithstanding any other
terms of this Section 6(b) to the contrary, to the extent any other stockholder
to whom the Company has previously granted registration rights is a participant
(the "Participant") in a registration in which any Holder hereunder is a
participant, the indemnification obligation of such Holder to the Company
hereunder shall be construed so that it is no more or less favorable to such
Holder than if such Holder had been obligated under the indemnification
obligation applicable to the Participant under the Participant's registration
rights agreement with the Company.
(c) If the indemnification provided for in Section 6(a) or
6(b) is unavailable to or insufficient to hold harmless an indemnified party
under such Sections in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportions as is appropriate to reflect the relative fault of
the Company and each Holder in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or such Holder and the parties' relative intent, knowledge, access to
information and the opportunity to correct or prevent such statement or
omission. The Company and the Holders agree that it would not be just and
equitable if contributions pursuant to this Section 6(c) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 6(c). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this Section 6(c) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
(d) The obligations of the Company and the Holders under this
Section 6 shall survive the completion of any offering of Registrable Shares in
a registration statement under this Agreement.
7. Tax Consequences. The Company does not warrant or represent, and
shall not be liable for, the tax consequences to the Holders for the exercise of
the Holders' rights under this Agreement (including, without limitation, the
potential tax consequences of the exercise of any of the Holders' rights
hereunder or the treatment of the transactions under the Acquisition Agreement
as a tax-free reorganization under Section 368 of the U.S. Internal Revenue
Code).
8. Miscellaneous.
(a) Amendments and Waivers. The provisions of this Agreement
may not be amended, modified, or supplemented and any waiver or consent to or
any departure from any of the provisions of this Agreement may not be given and
shall not become effective, unless and until (in each case) the Company shall
have agreed in writing thereto and shall have received the prior written consent
of (i) a Demand Percentage of the Holders to any such amendment, modification,
supplement,
REGISTRATION RIGHTS AGREEMENT
PAGE 8
<PAGE>
wavier, or consent and (ii) with respect to any such amendment, modification,
supplement, waiver, or consent which would be detrimental to a Holder, such
Holder.
(b) Notices. All notices, requests, approvals, consents,
demands and other communication provided 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
with copy to: Julian Hennig III, Esquire
Nexsen Pruet Jacobs & Pollard, LLP
P.O. Drawer 2426
Columbia, SC 29202
MainStreet: MainStreet Healthcare Corporation
2370 Main Street
Tucker, Georgia 30084
Attn: A. Wayne Johnson
with copy to: Sheldon E. Friedman, Esquire
S. Friedman & Associates, P.C.
1050 Crown Pointe Parkway
Suite 1550
Atlanta, GA 30338
Corker: Frank Corker, M.D.
__________________
__________________
with copy to: Sheldon E. Friedman, Esquire
S. Friedman & Associates, P.C.
1050 Crown Pointe Parkway
Suite 1550
Atlanta, GA 30338
Dare: Michael J. Dare
2370 Main Street
Tucker, Georgia 30084
REGISTRATION RIGHTS AGREEMENT
PAGE 9
<PAGE>
with copy to: Sheldon E. Friedman, Esquire
S. Friedman & Associates, P.C.
1050 Crown Pointe Parkway
Suite 1550
Atlanta, GA 30338
Ellis: David Ellis, D.O.
__________________
__________________
with copy to: Sheldon E. Friedman, Esquire
S. Friedman & Associates, P.C.
1050 Crown Pointe Parkway
Suite 1550
Atlanta, GA 30338
Erdman: Pamela K. Erdman, M.D.
__________________
__________________
with copy to: Sheldon E. Friedman, Esquire
S. Friedman & Associates, P.C.
1050 Crown Pointe Parkway
Suite 1550
Atlanta, GA 30338
Holloway: Harold Holloway, M.D.
__________________
__________________
with copy to: Sheldon E. Friedman, Esquire
S. Friedman & Associates, P.C.
1050 Crown Pointe Parkway
Suite 1550
Atlanta, GA 30338
Huang: Laykoon Huang, M.D.
__________________
__________________
with copy to: Sheldon E. Friedman, Esquire
S. Friedman & Associates, P.C.
1050 Crown Pointe Parkway
Suite 1550
Atlanta, GA 30338
REGISTRATION RIGHTS AGREEMENT
PAGE 10
<PAGE>
Johnson: A. Wayne Johnson
2370 Main Street
Tucker, Georgia 30084
with copy to: Sheldon E. Friedman, Esquire
S. Friedman & Associates, P.C.
1050 Crown Pointe Parkway
Suite 1550
Atlanta, GA 30338
Oliver: Izhak Oliver, M.D.
__________________
__________________
with copy to: Sheldon E. Friedman, Esquire
S. Friedman & Associates, P.C.
1050 Crown Pointe Parkway
Suite 1550
Atlanta, GA 30338
PENMAN: PENMAN Private Equity and Mezzanine
Fund, L.P.
333 West Wacker Drive
Suite 510
Chicago, IL 60606
Attn: Kelvin J. Pennington
with copy to: Mark D. Schindel
333 West Wacker Drive
Suite 510
Chicago, IL 60606
with additional
copy to: Mark Kindelin, Esquire
Petit: Richard Petit, P.A.
__________________
__________________
with copy to: Sheldon E. Friedman, Esquire
S. Friedman & Associates, P.C.
1050 Crown Pointe Parkway
Suite 1550
Atlanta, GA 30338
REGISTRATION RIGHTS AGREEMENT
PAGE 11
<PAGE>
Riddett: Robert G. Riddett, Jr.
2370 Main Street
Tucker, Georgia 30084
with copy to: Sheldon E. Friedman, Esquire
S. Friedman & Associates, P.C.
1050 Crown Pointe Parkway
Suite 1550
Atlanta, GA 30338
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)
three (3) business days after being duly deposited in the United States mail,
certified, return receipt requested.
(c) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding of the successors and assigns of each of the parties,
including without limitation, subsequent Holders of the Registrable Shares, who
must agree to be bound by all the terms and conditions of this Agreement by
executing a joinder hereto.
(d) Counterparts. This Agreement may be executed in two or
more counterparts, and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same instrument.
(e) Headings. The headings in this Agreement are for
convenience of reference only and shall not constitute a part of this Agreement,
nor shall they affect their meaning, construction, or effect.
(f) Governing Law. The validity, performance, construction,
and effect of this Agreement shall be governed by and construed in accordance
with the internal laws of the State of South Carolina, without giving effect to
principles of conflicts of law. Jurisdiction and venue (subject to proper
service of process) shall be exclusively in the state and federal courts for the
County of Richland in the State of South Carolina.
(g) Severability. In the event that any one or more of the
provisions contained herein, or the applicable thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(h) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company affecting the
Registrable Shares. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject
REGISTRATION RIGHTS AGREEMENT
PAGE 12
<PAGE>
matter, and supplements, but does not limit or abrogate, any similar provisions
of the Acquisition Agreement.
(i) Majority of Holders. After the exercise by the Holders of
a Demand Right hereunder, all decisions and actions of the Holders shall require
the approval of Holders owning greater than fifty (50) percent of the number of
Registrable Shares.
IN WITNESS WHEREOF, the parties have executed and delivered this
Registration Rights Agreement to be legally binding and effective as of the date
first above written.
COMPANY:
UCI MEDICAL AFFILIATES, INC. __________________________________
David Ellis, D.O.
By:___________________________________
Name:_________________________________
Title:________________________________ __________________________________
Pamela K. Erdman, M.D.
HOLDERS:
MAINSTREET HEALTHCARE __________________________________
CORPORATION Harold Holloway, M.D.
By:___________________________________
Name:_________________________________ __________________________________
Title:________________________________ Laykoon Huang, M.D.
PENMAN PRIVATE EQUITY AND
MEZZANINE FUND, L.P. __________________________________
By: Penman Asset Management, L.P. A. Wayne Johnson
Its: General Partner
By:_____________________________ __________________________________
Kelvin Pennington Izhak Oliver, M.D.
Its: General Partner
__________________________________
_________________________________ Robert G. Riddett, Jr.
Richard Petit, P.A.
PRACTICE ACQUISITION CONSULTANTS,
_________________________________ INC.
Frank Corker, M.D.
By: ______________________________
_________________________________ Its:____________________________
Michael J. Dare
REGISTRATION RIGHTS AGREEMENT
PAGE 13
Exhibit 8.4.3
Form of Transferees' Officers Certificate
[See Attached]
<PAGE>
TRANSFEREE'S OFFICERS' CERTIFICATE
[Corporate Name]
TO:_______________________________
We hereby certify in connection with the Acquisition Agreement and Plan
of Reorganization (the "Agreement") dated , 1998, respecting the purchase of
substantially all of the assets of MainStreet Healthcare Corporation, a Delaware
corporation; MainStreet Healthcare Medical Group, P.C., a Georgia professional
corporation; MainStreet Healthcare Medical Group, PC, a Tennessee professional
corporation; and Prompt Care Medical Center, Inc., a Georgia corporation, by UCI
Medical Affiliates, Inc., a Delaware corporation; UCI Medical Affiliates of
Georgia, Inc., a South Carolina corporation; Doctor's Care of Georgia, P.C., a
Georgia professional corporation; and Doctor's Care of Tennessee, P.C., a
Tennessee professional corporation, that we are officers of
_______________________________________________________ (the "Company") and,
that as such, have access to the corporate records and familiarity with the
matters therein contained and herein certified, that we are authorized to
execute and deliver this certificate in the name and on behalf of the Company,
and that:
1. Incumbency of Officers. The following named persons are on the date
hereof, and at all times since prior to the date of the Agreement, have been
duly elected, qualified, and acting officers of the Company holding the office
or offices set forth opposite his or her name, and that the signature set forth
opposite each such officer's name is his or her true and legal signature:
Name Office Signature
- ---- ------ ---------
- --------------------- ----------------- ---------------------
- --------------------- ----------------- ---------------------
- --------------------- ----------------- ---------------------
- --------------------- ----------------- ---------------------
- --------------------- ----------------- ---------------------
2. Incumbency of Directors. The following named persons are on the date
hereof, and were as of the date referenced in paragraph 5 below, the duly
elected, qualified, and acting directors of the Company, and constitute all the
directors of the Company at the date hereof and constituted all the directors at
the date referenced in paragraph 5 below:_______________________________________
________________________________________________________________________________
__________.
<PAGE>
3. Articles of Incorporation. Attached as Exhibit A hereto is a true,
correct, and complete copy of the Articles of Incorporation of the Company as
filed with the Secretary of State of the Company's state of organization, which
Articles of Incorporation have not been amended, modified, or rescinded except
as may be reflected in Exhibit A, and remain in full force and effect as of the
date hereof.
4. Bylaws. Attached as Exhibit B hereto is a true, correct, and
complete copy of the Bylaws of the Company, which Bylaws have not been amended,
modified, or rescinded except as may be reflected in Exhibit B and remain in
full force and effect as of the date hereof.
5. Approving Resolutions. Attached as Exhibit C hereto is a true,
correct, and complete copy of the resolutions (with any preamble thereto)
authorizing the Company's entering into and performing its obligations under the
Agreement, which resolutions were duly adopted on ____________________________,
199_, by the Board of Directors of the Company, and which resolutions are in
full force and effect on and as of the date hereof, not having been amended,
altered, repealed, or rescinded.
6. Bringdown of Representations and Warranties. Each representation and
warranty made by or respecting the Company in the Agreement is true and accurate
in all material respects as of the date of this certificate with the same effect
as if made on and as of the date of this certificate by the Company, except as
otherwise contemplated by the Agreement.
7. Compliance with Agreement. The Company has performed and complied in
all material respects with each and every covenant, agreement, and condition
required to be performed or complied with by the Company under the Agreement on
or prior to the date hereof.
IN WITNESS WHEREOF, we have executed this certificate on behalf of the
Company in the capacities set forth below our signatures as of the ____ day of ,
1998.
Sign:_____________________________
Print Name:_______________________
Title: President
Sign:_____________________________
Print Name:_______________________
Title: Secretary
2
Exhibit 8.4.4
Form of Legal Opinion of Transferees' Counsel
[See Attached]
<PAGE>
[Letterhead of Nexsen Pruet Jacobs & Pollard, LLP]
[Date of Closing]
MainStreet HealthCare Corporation
2370 Main Street
Tucker, Georgia 30084
RE: Transfer of Assets of MainStreet HealthCare Corporation (the
"Seller") to UCI Medical Affiliates of Georgia, Inc. (the
"Buyer")
Ladies and Gentlemen:
We have acted as special counsel to Buyer; UCI Medical Affiliates, Inc.
("UCI"); Doctor's Care of Georgia, P.C. ("DC of GA"); and Doctor's Care of
Tennessee, P.C. ("DC of TN") in connection with the Acquisition Agreement And
Plan of Reorganization executed on February 9, 1998 (the "Agreement") by and
among the Buyer; Seller; UCI; MainStreet HealthCare Medical Group, P.C., a
Georgia corporation; MainStreet HealthCare Medical Group, PC, a Tennessee
corporation; Prompt Care Medical Center, Inc., a Tennessee corporation; A. Wayne
Johnson; Robert G. Riddett, Jr.; Michael J. Dare; and Penman Private Equity And
Mezzanine Fund, L.P. This opinion is furnished pursuant to the Closing
requirements of Section 8.4.4 of the Agreement. All capitalized terms used in
this opinion letter that are not otherwise defined herein shall have the
meanings ascribed to them in the Agreement.
EXAMINATIONS
In our capacity as counsel to Buyer, UCI, DC of GA, and DC of TN, and
for purposes of this opinion, we have examined the following documents:
(i) Certain corporate records of Buyer, UCI, DC of GA, and DC
of TN, including their respective articles of incorporation (or charter),
bylaws, and selected minutes;
(ii) The Agreement and all documents, instruments, statements,
and certificates required to be delivered by Buyer, UCI, DC of GA, or DC of TN
at Closing thereunder (collectively the "Ancillary Documents");
(iii) Such other documents, records, and matters of law as we
have deemed necessary and appropriate to render the opinion set forth in this
letter, subject to the limitations, assumptions, and qualifications noted below.
As to questions of fact material to our opinions expressed herein, we
have, when relevant facts were not independently established, relied upon
certificates of, and information received from, officers of Buyer, UCI, DC of
GA, and DC of TN and upon the
<PAGE>
MainStreet HealthCare Corporation
[Date of Closing]
Page 2
representations and warranties of Buyer and UCI contained in the Agreement. In
this regard, the certificates of officers of Buyer, UCI, DC of GA, and DC of TN
upon which we are relying are the certificates to be delivered at Closing as
required by the Agreement and certain officer's certificates which has been
delivered in advance of this opinion letter. We have also relied upon
certificates and other documents from, and conversations with, public officials.
We have not independently investigated or verified the facts represented in such
certificates, information, representations, or warranties and do not opine as to
the accuracy of any such fact.
OPINIONS
Based upon our review of the foregoing and subject to the limitations,
assumptions, and qualifications as set forth herein, it is our opinion that, as
of the date of this letter:
1. Buyer is a corporation duly organized, validly existing, and in good
standing under the laws of the State of South Carolina, with the requisite
corporate power and authority to own or lease its properties and assets, to
conduct its business to the extent now being conducted, and to enter into and
perform its obligations under the Agreement and the Ancillary Documents.
2. UCI is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware, with the requisite corporate
power and authority to own or lease its properties and assets, to conduct its
business to the extent now being conducted, and to enter into and perform its
obligations under the Agreement and the Ancillary Documents.
3. DC of GA is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Georgia, with the requisite
corporate power and authority to own or lease its properties and assets, to
conduct its business to the extent now being conducted, and to enter into and
perform its obligations under the Ancillary Documents.
4. DC of TN is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Tennessee, with the requisite
corporate power and authority to own or lease its properties and assets, to
conduct its business to the extent now being conducted, and to enter into and
perform its obligations under the Ancillary Documents.
5. Neither the execution and delivery of the Agreement and the
Ancillary Documents, nor the consummation of the transactions contemplated
thereby, constitute or, with the giving of notice or passage of time or both,
would constitute a violation of or a default under or conflict with any term or
provision of Buyer, UCI, DC of GA or DC of TN's respective Articles of
Incorporation or Bylaws or, to the best of our knowledge, any of the
<PAGE>
MainStreet HealthCare Corporation
[Date of Closing]
Page 3
material terms, conditions or provisions of any material agreement or instrument
known to us to which Buyer, UCI, DC of GA, or DC of TN is a party, or by which
Buyer, UCI, DC of GA, or DC of TN is or may be bound, or constitute a violation
of any statute, law or ordinance or any rule, regulation, order of any
governmental authority or any judicial decree, or to the best of our knowledge,
require Buyer, UCI, DC of GA, or DC of TN to obtain the consent or approval of
any governmental authority (except for consents, approvals, or re- issuances
described in or required by the Agreement), lending institution, or other third
party except for such consents as have been obtained by Buyer, UCI, DC of GA, or
DC of TN and delivered to you in advance of this opinion letter.
6. All actions and proceedings necessary to be taken by or on the
behalf of Buyer, UCI, DC of GA, and DC of TN in connection with the Agreement
and the Ancillary Documents to which it is a party and necessary to make the
same effective have been duly and validly taken. The Agreement and the Ancillary
Documents to which it is a party have been duly and validly executed and
delivered by Buyer, UCI, DC of GA, and DC of TN and constitute legal, valid, and
binding obligations of Buyer, UCI, DC of GA, and DC of TN enforceable in
accordance with their respective terms.
7. To the best of our knowledge, there are no actions, suits, claims,
or proceedings pending or threatened against Buyer, UCI, DC of GA, or DC of TN
before any federal, state, county, municipal or other court, arbitrator, or
other tribunal nor are there any judgments, decrees, awards, regulations or
orders of any such court, arbitrator, or other tribunal outstanding against
Buyer, UCI, DC of GA, or DC of TN which if adversely determined would prohibit
or materially call into question the consummation of the transactions
contemplated by the Agreement or the Ancillary Documents.
8. The issuance, sale and delivery of the Shares in accordance with the
Agreement have been duly authorized by all necessary corporate action on the
part of UCI. The Shares when so issued, sold and delivered in accordance with
the provisions of the Agreement will be duly and validly issued, fully paid and
nonassessable.
ASSUMPTIONS
In rendering these opinions we have assumed without investigation or
independent verification the following:
(a) The authenticity of any document or other instrument submitted to
us as an original, the conformity to the originals of any document or other
instrument submitted to us as a copy, the legal capacity of natural persons and
the genuineness of all signatures on such originals or copies (other than
signatures of Buyer, UCI, DC of GA, and DC of TN).
<PAGE>
MainStreet HealthCare Corporation
[Date of Closing]
Page 4
(b) All documents executed by a party other than Buyer, UCI, DC of GA,
and DC of TN were duly and validly executed and delivered by such party in the
proper exercise of their corporate, governmental, or individual powers, as the
case may be, and are legal, valid and binding obligations of such party
enforceable against such party in accordance with their respective terms or are
otherwise effective at the date hereof.
(c) The absence of fraud, duress, or breach of fiduciary duty in the
inducement or effectuation of the subject transactions (in this connection we
affirm that we have no knowledge of the existence of any such fraud, duress, or
breach of fiduciary duty).
QUALIFICATIONS
These opinions are limited by and subject to the following
qualifications:
(a) These opinions are strictly limited in scope and application to the
laws of the United Sates of America and the laws of the State of South Carolina.
No opinion is expressed: as to the laws of any other jurisdiction; regarding the
extent to which or manner in which such other laws are applicable to matters
herein addressed; whether opinions herein stated are, in whole or in part,
superseded or invalidated by the application of such other laws; or as to the
application of choice of law provisions in any documents or of any jurisdiction.
(b) The opinions expressed herein are subject to and may be affected or
limited by, and we do not purport to express any opinion herein concerning,
federal or state securities law and federal or state antitrust or related laws.
(c) Opinions expressed "to the best of our knowledge" are based upon
inquiry of UCI, Buyer, DC of GA, and DC of TN, or officers of the relevant
entity or entities as to the subject matter thereof, but without independent
investigation or verification of any kind. While no independent investigations
or verifications have been conducted by us, we have no knowledge of facts in
material conflict with such opinions.
(d) The opinions expressed herein are based upon applicable laws,
statutes, ordinances, rules and regulations as exist on this date, and we
express no opinion as to the effect which any future amendments, changes,
additions, or modifications thereof may have on the future performance or
validity of the Agreement or the Ancillary Documents, or on the consummation of
the transactions contemplated by the Agreement and the Ancillary Documents. We
assume no obligation to update or supplement our opinion to reflect any facts or
circumstances which may hereafter come to our attention or changes in law which
may hereafter occur.
<PAGE>
MainStreet HealthCare Corporation
[Date of Closing]
Page 5
(e) The enforceability of the Agreement and the Ancillary Documents,
and the availability of certain rights and remedies provided therein, are
subject to, and may be affected or limited by the following: (i) the provisions
of applicable liquidation, conservatorship, insolvency, bankruptcy,
reorganization, moratorium, rearrangement and other similar laws, including
court decisions interpreting such laws; (ii) all other applicable federal or
state laws, constitutional requirements, statutes, ordinances, judicial
decisions, rules and regulations affecting creditors' rights generally,
including, without limitation, fraudulent conveyances, violable preferences,
non-judicial foreclosures and self-help remedies; (iii) general principles of
equity (regardless of whether such enforceability is considered in equity of at
law); (iv) the power of courts to deny enforcement of remedies generally based
upon public policy; (v) by the requirement that a party act with reasonableness
and in good faith to the extent required by the applicable law; and (vi) such
other matters of law which do not materially interfere with the practical
realization of the benefits intended to be conferred under the Agreement and the
Ancillary Documents.
(f) We express no opinion as to the enforceability of any provisions in
the Agreement or the Ancillary Documents: (i) purporting to waive or affect any
rights to notices which may not be waived under applicable law; (ii) relating to
delay or omission of enforcement of remedies; (iii) with respect to
severability, exculpation, and set off rights; or (iv) respecting
indemnification rights which may be limited under applicable securities or other
law.
(g) We express no opinion as to the title of any party to its
properties or the priority or absence of any liens or encumbrances thereon or
claims thereto.
(h) These opinions are provided to you as legal opinions only, and not
as guaranties or warranties of the matters discussed herein or of any
transaction or obligation.
We are furnishing this opinion letter for the sole and exclusive
benefit of the addressee and its counsel, and this opinion letter is not to be
relied upon or used by, or circulated, quoted or otherwise distributed to, any
other person without the prior written consent of the undersigned.
Exhibit 9.1
1. MainStreet is not authorized to do business in Tennessee as of this
date; however, it shall qualify before Closing.
Exhibit 9.5
1. See Exhibit 9.26.
Exhibit 9.6
Security holders of MainStreet
[See Attached]
<PAGE>
EXHIBIT 9.6
<TABLE>
<CAPTION>
Class A Non-Voting Common Stock: Number of Shares Date of Issuance
- ------------------------------- ---------------- ----------------
<S> <C> <C> <C>
1. Frank T. Corker 3,000 12/04/96
2. Laykoon Huang 160,000 12/04/96
3. Dennis R. Thomas* 20,000 12/04/96
4. Izhak Oliver 50,000 12/20/96
5. David Ellis 15,000 01/15/97
6. Richard G. Pettit 15,000 01/15/97
7. Practice Acquisition Consultants, Inc. 5,000 05/21/97
8. L. Lanier Allen* 8,000 04/24/97
*Includes Allen & Thomas whose shares are going to be redeemed prior to the Closing.
Class B Common Stock:
1. A. Wayne Johnson 1,351,250 12/12/96
2. Robert G. Riddett, Jr. 646,250 12/12/96
3. Michael J. Dare 352,500 12/12/96
4. PENMAN Private Equity and 3,525,000 12/ /96
Mezzanine Fund, L.P.
5. PENMAN Private Equity and 423,458 7/11/97
Mezzanine Fund, L.P.
6. A. Wayne Johnson 161,994 7/11/97
5% Cumulative Redeemable Preferred:
1. A. Wayne Johnson 927 12/12/96
2. PENMAN Private Equity and 2,440 12/ /96
Mezzanine Fund, L.P.
3. PENMAN Private Equity and 750 4/07/97
Mezzanine Fund, L.P.
4. PENMAN Private Equity and 130 6/05/97
Mezzanine Fund, L.P.
5. PENMAN Private Equity and 20 6/05/97
Mezzanine Fund, L.P.
6. PENMAN Private Equity and 100 5/22/97
Mezzanine Fund, L.P.
<PAGE>
Exhibit 9.6 (Continued)
10% Cumulative Redeemable Preferred:
PP-1 PENMAN Private Equity and 298 7/11/97
Mezzanine Fund, L.P.
PP-2 A. Wayne Johnson 114 7/11/97
</TABLE>
Exhibit 9.9
1. Universal Diagnostics, Inc. Was formed on January 27, 1997. A stock
certificate for 900 shares to MainStreet Healthcare Corporation was
prepared, but has not been signed
Exhibit 9.10
Financial Statements
[See Attached]
<PAGE>
KPMG
MAINSTREET HEALTHCARE CORPORATION
Consolidated Financial Statements
March 31, 1997
With Independent Auditors' Report Thereon
<PAGE>
KPMG Peat Marwick LLP
303 Peachtree Street, N.E.
Suite 2000
Atlanta, GA 30308
INDEPENDENT AUDITORS' REPORT
The Board of Directors
MainStreet Healthcare Corporation:
We have audited the accompanying consolidated balance sheet of MainStreet
Healthcare Corporation as of March 31, 1997, and the related consolidated
statements of operations, stockholders' deficit, and cash flows for the period
February 6, 1996 (date of incorporation) to March 31, 1997. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of MainStreet
Healthcare Corporation at March 31, 1997, and the results of its operations and
its cash flows for the period February 6, 1996 (date of incorporation) to March
31, 1997 in conformity with generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared assuming
that MainStreet Healthcare Corporation will continue as a going concern. As
discussed in note 1(b) to the consolidated financial statements, MainStreet
Healthcare Corporation has suffered recurring losses and has a working capital
deficiency that raises substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are also described
in note 1(b). The accompanying consolidated financial statements do not include
any adjustment that might result from the outcome of this uncertainty.
November 14, 1997, except
as to note 12(b), which is
as of February 3, 1998 /s/ KPMG Peat Marwick LLP
2
<PAGE>
MAINSTREET HEALTHCARE CORPORATION
Consolidated Balance Sheet
March 31, 1997
Assets
<TABLE>
<CAPTION>
Current assets:
<S> <C>
Cash $ 1,950
Accounts receivable, less allowances for contractual adjustments
and uncollectible accounts of $1,258,571 1,110,019
Redeemable preferred stock subscriptions receivable (notes 4 and 11) 750,000
Other receivables 110,658
Prepaid and other 44,010
-----------
Total current assets 2,016,637
Property and equipment, net (notes 3 and 6) 1,422,594
Intangible assets, net (notes 3 and 5) 1,968,252
Other assets 388,393
----------
Total assets $ 5,795,876
=========
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable $ 695,411
Other accrued expenses and liabilities 615,237
Current portion of notes payable (notes 3 and 7) 357,053
Current portion of capital lease obligation (note 7) 3,401
Shareholder loan (note 8) 18,252
------
Total current liabilities 1,689,354
----------
Long-term liabilities:
Notes payable, less current portion (notes 3 and 7) 751,261
Capital lease obligation, less current portion (note 7) 14,183
-----------
Total long-term liabilities 765,444
-----------
Total liabilities 2,454,798
Redeemable preferred stock, $.01 par value; 13,250 shares authorized,
no shares issued and outstanding -
5% cumulative redeemable preferred stock, $1,000 redemption value;
6,000 shares authorized, 3,367 shares issued and outstanding, 750
shares subscribed (notes 4, 11, and 12) 4,117,000
Class A nonvoting convertible common stock, $.01 par value;
5,000,000 shares authorized, 268,000 shares issued and outstanding 696,015
Stockholders' deficit (note 4):
Class B common stock, $.01 par value; 20,000,000 shares authorized,
5,875,000 shares issued and outstanding 58,750
Additional paid-in capital 81,550
Accumulated deficit (1,612,237)
---------
Total stockholders' deficit (1,471,937)
----------
Total liabilities and stockholders' deficit $ 5,795,876
=========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
MAINSTREET HEALTHCARE CORPORATION
Consolidated Statement of Operations
For the period February 6, 1996 (date of incorporation) to March 31, 1997
Net patient service revenue $ 3,665,982
---------
Operating expenses:
Cost of affiliated physician services 1,733,826
Clinic salaries, wages, and benefits 1,131,729
Clinic rent and lease expense (notes 7 and 8) 306,571
Clinic supplies 287,431
Other clinic costs 428,987
General corporate expenses (note 8) 571,499
Depreciation and amortization (notes 5 and 6) 217,029
Clinic start-up expenses 307,419
-----------
Total expenses 4,984,491
-----------
Operating loss (1,318,509)
Interest expense, net (note 7) 161,774
Loss on clinic disposals (note 12(a)) 88,990
-------------
Loss before income taxes (1,569,273)
Income taxes (note 9) -
-
Net loss $ (1,569,273)
=========
See accompanying notes to consolidated financial statements.
4
<PAGE>
MAINSTREET HEALTHCARE CORPORATION
Consolidated Statement of Stockholders' Deficit
For the period February 6, 1996 (date of incorporation) to March 31, 1997
<TABLE>
<CAPTION>
Class B Additional Total
Common Stock Paid-in Accumulated Stockholder's
Shares Amount Capital Deficit Deficit
------ ------ ------- ------- -------
<S> <C> <C> <C> <C> <C>
Balance at February 6, 1996 - $ - - - -
Issuance of common stock 5,875,000 58,750 38,586 97,336
Accretion of difference
Between fair value and
garanteed value of stock
issued in connection with
acquisition (note 3) - - 42,964 (42,964) -
Net loss - - - (1,569,273) (1,569,273)
---------------- --------------------------- ------------- -----------
Balance at March 31, 1997 5,875,000 $ 58,750 81,550 (1,612,237) (1,471,937)
========= ========== ======= ============ ===========
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
MAINSTREET HEALTHCARE CORPORATION
Consolidated Statement of Cash Flows
For the period February 6, 1996 (date of incorporation) to March 31, 1997
<TABLE>
<CAPTION>
<S> <C>
Operating activities:
Net loss $(1,569,273)
Adjustments to reconcile net loss to net cash provided
(used) by operating activities:
Depreciation and amortization 217,029
Changes in operating assets and liabilities,
net of effects of acquisitions:
Accounts receivable, net (517,720)
Other receivables (110,658)
Prepaid expenses and other assets (64,010)
Accounts payable 580,688
Other accrued expenses and liabilities 615,237
------------
Net cash used by operating activities (848,707)
------------
Investing activities:
Acquisitions of businesses, net of cash acquired (note 3) (1,226,480)
Purchases of property and equipment (631,279)
------------
Net cash used by investment activities (1,857,759)
------------
Financing activities:
Net proceeds from issuance of preferred stock 2,071,607
Proceeds from shareholder loans 1,370,300
Proceeds from issuance of common stock 65,810
Net borrowings under capital lease obligations 17,584
Repayment of notes payable (423,363)
Repayment of shareholder loans (393,522)
-----------
Net cash provided by financing activities 2,708,416
-----------
Net increase in cash 1,950
Cash at beginning of period -
Cash at end of period $ 1,950
=============
Supplemental disclosure of cash flow information cash paid during the period
for:
Interest $ 55,476
Income taxes -
</TABLE>
See accompanying notes to consolidated financial statements.
6
<PAGE>
MAINSTREET HEALTHCARE CORPORATION
Notes to Consolidated Financial Statements
March 31, 1997
(1) Organization and Basis of Presentation
(a) Description of Business
MainStreet Healthcare Corporation ("the Company") was
incorporated on February 6, 1996. The Company was organized to
purchase general practitioner outpatient clinics in Georgia
and Tennessee. After purchasing a clinic, the Company focuses
on centralizing fixed costs and reducing the overall overhead
of each outpatient clinic in order to maximize income and cash
flow. During the period from February 6, 1996 to March 31,
1997, MainStreet acquired 12 primary care clinics.
(b) Basis of Presentation
The consolidated financial statements have been prepared on
the accrual basis of accounting and include the accounts of
the Company and the affiliated professional corporations
("Professional Corporations"). Through the clinic services
agreements between the Company and the Professional
Corporations, the Company has assumed full responsibility for
the operating expenses in return for the assignment of the
revenue of the professional corporations.
The Company has perpetual, unilateral control over the assets
and operations of the Professional Corporations, and
notwithstanding the lack of technical majority ownership of
the stock of such entities, consolidation of the various
professional corporations is necessary to present fairly the
financial position and results of operations of the Company
because of control by means other than ownership of stock.
Control by the Company is perpetual rather than temporary
because of (i) the length of the original terms of the
agreements, (ii) the successive extension periods provided by
the agreements, (iii) the continuing investment of capital by
the Company, (iv) the employment of the nonphysician
personnel, and (v) the nature of the services provided to the
Professional Corporations by the Company. All intercompany
accounts and transactions have been eliminated in the
consolidation.
The Company has experienced recurring losses since its
inception, including approximately $1,900,000 (unaudited) from
April 1, 1997 through December 31, 1997, and has a net working
capital deficiency of approximately $1,200,000 (unaudited) as
of December 31, 1997. Management has entered into a letter of
intent to sell its operating clinics at an amount that in its
opinion would generate sufficient value to satisfy all its
outstanding debt obligations in either cash or stock (see note
12(b)). The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.
(2) Summary of Significant Accounting Policies
(a) Property and Equipment
Property and equipment are recorded at cost, less accumulated
depreciation and amortization. Depreciation of property and
equipment is calculated using the straight-line method over
the estimated useful lives of the assets.
7
<PAGE>
MAINSTREET HEALTHCARE CORPORATION
Notes to Consolidated Financial Statements
Equipment held under capital leases and leasehold improvements
are amortized on a straight-line basis over the shorter of the
lease term or estimated useful life of the assets.
(b) Intangible Assets
(1) Noncompete Agreements
In connection with certain clinic acquisitions, the
Company entered into noncompete agreements with
physicians. Such agreements are being amortized using
the straight-line method over the terms of the
agreements, generally three to five years.
(2) Excess of Cost
Goodwill, which represents the excess of purchase
price over fair value of net assets acquired, is
amortized on a straight-line method over the expected
periods to be benefited, generally fifteen years. The
Company assesses the recoverability of this
intangible asset by determining whether the
amortization of the goodwill balance over its
remaining life can be recovered through undiscounted
future operating cash flows of the acquired
operation. The amount of goodwill impairment, if any,
is measured based on projected discounted future
operating cash flows using a discount rate reflecting
the Company's average cost of funds. The assessment
of recoverability of goodwill will be impacted if
estimated future operating cash flows are not
achieved. In management's estimation, the remaining
amount of goodwill has continuing value.
(c) Net Revenue
Patient revenue is recorded at established rates reduced by
allowances for doubtful accounts and contractual adjustments.
Contractual adjustments arise due to the terms of certain
reimbursement and managed care contracts. Such adjustments
represent the difference between charges at established rates
and estimated recoverable amounts and are recognized in the
period the services are rendered. Any differences between
estimated contractual adjustments and actual final settlements
under reimbursement contracts are reported as contractual
adjustments in the year final settlements are made.
(d) Income Taxes
The Company accounts for income taxes using the asset and
liability method of Statement of Financial Accounting
Standards No. 109, ACCOUNTING FOR INCOME TAXES ("SFAS No.
109"). Under SFAS No. 109, deferred tax assets and liabilities
are recognized for the future tax consequences attributable to
differences between financial statement carrying amounts of
existing assets and liabilities and their respective tax
bases. Deferred income tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in
the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred income tax
assets and liabilities of a change in tax rates is recognized
in income in the period that includes the enactment date.
8
<PAGE>
MAINSTREET HEALTHCARE CORPORATION
Notes to Consolidated Financial Statements
Prior to the merger of MainStreet Georgia with and into
MainStreet Delaware, as discussed in note 4, the Company was
taxed as an S Corporation under the Internal Revenue Code. As
a result, the Company has been taxed in a manner similar to a
partnership for the period prior to December 9, 1997, and has
not provided any federal or state income taxes as the results
of operations were passed through to, and the related income
taxes became the individual responsibility of the Company's
shareholders.
(e) Impairment of Long-Lived Assets
Financial Accounting Standards No. 121 ("SFAS No. 121"),
ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR
LONG-LIVED ASSETS TO BE DISPOSED OF, requires the Company to
review for the impairment of long-lived assets and certain
identifiable intangibles to be held and used by the Company
whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable.
The statement also addresses the accounting for long-lived
assets that are expected to be disposed. SFAS No. 121 is
applicable for most long-lived assets, identifiable
intangibles, and goodwill related to those assets. Management
has determined that long-lived assets are fairly stated in the
accompanying consolidated balance sheet and that no indicators
of impairment are present.
(f) Redeemable Preferred Stock Offering Costs
Costs associated with the issuance of mandatory redeemable
preferred stock have been capitalized and are being amortized
using a straight-line method over five years and are included
in other assets in the accompanying consolidated balance sheet
(see note 5).
(g) Use of Estimates
Management of the Company has made certain estimates and
assumptions relating to the reporting of assets and
liabilities and the disclosure of contingent liabilities to
prepare these financial statements in conformity with
generally accepted accounting principles. Actual results could
differ from those estimates.
(3) Acquisitions
The Company acquired, through its wholly owned subsidiaries, certain
operating assets of 12 primary care physician clinics.
Simultaneous with each acquisition, the Company enters into long-term
clinic services agreements. Under these agreements, the Company manages
all aspects of the affiliated practice other than the provision of
medical services, which is controlled by the physician groups. For
providing services under the clinic services agreements, the physicians
receive compensation based on individually negotiated contracts.
Generally, the clinic service agreements cannot be terminated by the
physician group or the Company without cause, which includes material
default or bankruptcy of either party.
9
<PAGE>
MAINSTREET HEALTHCARE CORPORATION
Notes to Consolidated Financial Statements
The acquisitions have been accounted for by the purchase method of
accounting and, accordingly, the purchase price has been allocated to the
net assets acquired and the liabilities assumed based upon the fair
values at the dates of acquisition. In connection with the acquisitions,
the Company issued 268,000 shares of common stock in MainStreet
Healthcare Corporation. The Company guaranteed the fair market value of
the stock to be $5 per share at various dates in the future and recorded
the stock by discounting the guarantee price using a risk-based interest
rate of 15%. The difference between the fair value and guaranteed value
of stock issued in connection with the issuance of stock of $643,395 is
being accreted over the period from the date of issuance to the various
settlement dates through periodic charges to accumulated deficit. The
Company also issued $1,531,677 in notes payable. The excess of the
purchase price over the fair values of the net assets acquired was
$1,813,179 and has been recorded as goodwill and is being amortized using
a straight-line method over 15 years. The composition of acquisition of
businesses, net of cash acquired, is set forth below:
Working capital, other than cash $ 477,577
Property and equipment 862,916
Noncompete agreements 300,500
Excess of costs over fair value of assets acquired 1,813,179
Less:
Value of stock issued (696,015)
Value of notes payable issued (1,531,677)
----------
Cash purchase price, net of cash acquired $ 1,226,480
=========
The operating results of the acquired clinics have been included in the
consolidated statement of operations from the respective dates of
acquisition.
(4) Reorganization
MainStreet Healthcare Corporation (MainStreet Georgia) was organized on
February 6, 1996 as a Georgia Corporation and was authorized 10,000,000
shares of no par common stock of which 5,375,000 shares were issued.
On December 4, 1996, MainStreet Healthcare Corporation (MainStreet
Delaware) was incorporated and was authorized 10,000,000 shares of no par
common stock. Effective December 9, 1996, the shareholders of MainStreet
Georgia exchanged their shares for equal shares in MainStreet Delaware
pursuant to a merger of MainStreet Georgia with and into MainStreet
Delaware.
On December 11, 1996, MainStreet Delaware amended and restated the
Certificate of Incorporation in order to give MainStreet Delaware the
authority to issue preferred stock and common stock as follows:
(a) 20,000 shares of Preferred Stock, par value $.01 per
share. MainStreet Delaware's Board of Directors has
the authority to fix the terms of the Preferred
Stock.
10
<PAGE>
MAINSTREET HEALTHCARE CORPORATION
Notes to Consolidated Financial Statements
(b) 5,000,000 shares of Class A Non-Voting Convertible
Common Stock, par value $.01 per share. One share of
Class A Non-Voting is convertible upon: (i) a
Qualified Public Offering; (ii) a sale of MainStreet
Delaware; or (iii) a sale of a majority of the Class
B Common Stock, into one fully paid and
non-assessable share of Class B Common Stock.
(c) 20,000,000 shares of Class B Common Stock, par value
$.01 per share.
The Class A and Class B common stocks are identical,
except with respect to voting rights, where the Class
A shares have no voting rights. The Class A shares
are nonvoting convertible into one share of Series B
stock upon: (i) a Qualified Public Offering; (ii) a
sale of the Company; or (iii) a sale of a majority of
the shares of Class B stock.
Effective December 12, 1996, MainStreet Delaware entered into a
recapitalization agreement. The shareholders of MainStreet Georgia
exchanged a total of 5,375,000 shares of no par common stock in
MainStreet Georgia and $948,026 of debt owed by MainStreet Georgia to the
shareholders for 2,350,000 shares of no par common stock and 927 shares
of five percent cumulative mandatory redeemable preferred stock in
MainStreet Delaware. In addition, Penman Private Equity and Mezzanine
Fund, L.P., (Penman) purchased 3,525,000 shares of Class B Common Stock
for $60,000 and 2,440 shares of five percent mandatory redeemable
preferred stock in MainStreet Delaware for $2,071,607, net of offering
expenses of $368,393. The preferred stock is mandatory redeemable on
December 12, 2001.
On March 21, 1997, Penman subscribed to 750 shares of the five percent
mandatory redeemable preferred stock for $750,000. On April 8, 1997, the
Company received $750,000 for the subscribed preferred stock.
(5) Intangible Assets
Intangible assets consists of:
Excess of cost over fair value of assets acquired $ 1,813,179
Noncompete agreements 300,500
Less accumulated amortization (145,427)
---------
$ 1,968,252
==========
(6) Property and Equipment
Property and equipment consists of:
Land $ 104,600
Buildings and improvements 406,635
Furniture and fixtures 181,621
Clinic equipment 559,451
Office equipment 193,843
Leasehold improvements 48,046
------------
1,494,196
Accumulated depreciation and amortization (71,602)
-------
$ 1,422,594
============
11
<PAGE>
MAINSTREET HEALTHCARE CORPORATION
Notes to Consolidated Financial Statements
<TABLE>
<CAPTION>
<S> <C>
(7) Long-Term Debt and Leases
Long-term debt and capital leases consists of:
Notes payable to physician groups with interest rates ranging from
7% to 10.5%, with payments
due at varying intervals through March 1, 2006 $ 1,108,314
Capital leases 17,584
----------------
1,125,898
Less amounts due within one year 360,454
----------------
$ 765,444
================
The following is a schedule of principal maturities of long-term debt,
including capital leases, as of March 31, 1997.
1998 $ 360,454
1999 360,717
2000 161,691
2001 37,929
2002 34,814
Thereafter 170,293
-----------------
Total $ 1,125,898
=================
</TABLE>
CAPITAL LEASES: The Company is the lessee of equipment under a capital
lease which expires during the next ten years. The related equipment
is being amortized over ten years and the related amortization expense
is included with depreciation expense in the consolidated statement of
operations.
The following is a schedule of future minimum lease payments under the
capital leases together with the present value of the net minimum
lease payments as of March 31, 1997.
1998 $6,045
1999 6,045
2000 6,045
2001 5,892
-------
Total minimum lease payments 24,027
Less amounts representing interest (6,443)
------
Obligation under capital leases 17,584
Less current portion of capital lease obligations (3,401)
------
Long-term obligations under capital leases $14,183
=======
Capitalized equipment leases included in equipment was $18,600 at
March 31, 1997. The imputed interest rate was 16.45% at March 31,
1997.
12
<PAGE>
MAINSTREET HEALTHCARE CORPORATION
Notes to Consolidated Financial Statements
OPERATING LEASES: Operating leases generally consist of short-term lease
agreements for professional office space where the medical practices are
located. These leases generally have five-year terms with renewal
options. Lease expense of $250,000 for 1997 consists of corporate office
space, corporate equipment and medical office space, and equipment for
the operating practices.
The following is a schedule of future minimum lease payments under
noncancelable operating leases as of March 31, 1997.
1998 $ 512,353
1999 453,355
2000 426,199
2001 411,586
2002 258,130
Thereafter 76,757
-----------
$2,138,380
==========
(8) Related Party Transactions
The Chief Executive Officer and Chief Operating Officer of the Company
made loans to finance the Company's operations in the amounts of
$1,345,000 and $25,300, respectively, of which $20,000 and $500,
respectively, of contributed capital was converted to debt under the
Reorganization discussed in note 4. Of the $1,345,000, $927,000 was
converted into preferred stock; $21,026 was converted into Class B common
stock; $378,722 was repaid during the year; and the remainder of $18,252
is outstanding at March 31, 1997. Of the $25,300, $10,500 was converted
into Class B common stock, and $14,800 was repaid during the year.
During the period ended March 31, 1997, the Company made payments of
$116,260 to related parties for rent expense in connection with the
clinic facilities. Also, the Company made principal and interest payments
of $14,220 on behalf of the Chief Executive and Operations Officers of
the Company for the corporate office location.
In the process of acquiring the physician clinic groups, the Company paid
$47,650 to a consultant who became an officer of the Company.
(9) Income Taxes
Because of operating losses, the Company has not provided any income tax
expense for the year ended March 31, 1997. The Company has operating loss
carryforwards, which may be used to reduce future taxable income, of
approximately $280,014 at March 31, 1997 which expire beginning in 2010.
The income tax recognition of temporary differences originating before
the Company became a C Corporation will reverse. Accordingly, an income
tax liability of $101,500 was recorded as of the date the Company became
a C Corporation.
13
<PAGE>
MAINSTREET HEALTHCARE CORPORATION
Notes to Consolidated Financial Statements
Deferred income taxes determined in accordance with Statement 109 reflect
the net tax effects of (a) temporary differences between carrying amounts
of assets and liabilities for financial reporting purposes and the
amounts used for income tax purposes and (b) operating loss and tax
credit carryforwards. In assessing the realizability of deferred tax
assets, management considers whether it is more likely than not that some
portion or all of the deferred tax assets will not be realized. The
ultimate realization of deferred tax assets is dependent upon the
generation of future taxable income during the periods in which those
temporary differences become deductible. Management considers the
scheduled reversal of deferred tax liabilities, projected future taxable
income, and tax planning strategies in making this assessment. Due to the
uncertainty of future realization, the Company's deferred tax assets are
subject to a valuation allowance that results in the recognition of no
deferred tax asset at March 31, 1997.
The tax effects of significant items comprising the Company's deferred
income taxes for March 31, 1997 are as follows:
Deferred tax assets:
Accrual to cash $ 207,000
Net operating loss carryforwards 106,400
Other 49,300
------
362,700
Less valuation allowance (318,600)
--------
Net deferred tax assets 44,100
Deferred tax liabilities - depreciation (44,100)
-------
Net deferred taxes $ -
=========
The significant components of the deferred income tax expense (benefit)
for the period ended March 31, 1997 are as follows:
Deferred income tax benefit $ 420,100
Change in tax status from S Corporation
to C Corporation (101,500)
Increase in valuation allowance (318,600)
---------------
Deferred income tax expense $ -
===============
(10) Contingencies
In addition to the general liability and malpractice insurance carried by
the individual physicians, the Company is insured with respect to general
liability and medical malpractice risks on a claims-made basis. To the
extent that any claims-made coverage is not renewed or replaced with
equivalent insurance, claims based on occurrences during the term of the
coverage, but reported subsequently, would be uninsured. Management
anticipates that the claims-made coverage currently in place will be
renewed or replaced with equivalent insurance as the term of such
coverage expires.
14
<PAGE>
MAINSTREET HEALTHCARE CORPORATION
Notes to Consolidated Financial Statements
(11) Redeemable Preferred Stock
Five percent preferred stock is cumulative, mandatory redeemable
nonvoting shares issued in connection with the reorganization
described in note 4. The five percent dividend is payable when
declared by the Company. During 1997, the Company declared a
dividend of $47,046 based on the preferred stock issuance date of
December 12, 1996. Upon sale of the Company or a Qualified Public
Offering, the Company will redeem the preferred stock at the
redemption price which is $1,000 per share plus the amount of
accrued and unpaid dividends at such date. The preferred shares are
mandatory redeemable on December 12, 2001. If the Company is unable
or does not redeem the preferred shares, the dividend rate will
increase to nine percent.
The Company granted options to acquire up to 146,875 shares of Class
B common stock to officers of the Company, which are vested and are
exercisable at $5.50 per share.
(12) Subsequent Events
(a) Subsequent to March 31, 1997, the Company closed two physician
clinics which were purchased during the period. The amount of
the loss, including write-off of goodwill, accounts receivable,
and property and equipment, was $88,990.
(b) The Company has signed a letter of intent dated February 3, 1998
for the sale of substantially all of its assets to UCI Medical
Affiliates Inc. ("UCI"). The consideration paid by UCI to the
Company for the assets, as defined in the letter of intent,
shall be $8,050,000 plus assumption of debt of $685,000.
15
<PAGE>
MainStreet Healthcare, Inc.
Balance Sheet
ASSETS 12/31/97 12/31/96
Cash
Petty Cash 10,409 850
Cash-Checking 73,931 1,995,684
-----------------------------
Total Cash 84,340 1,996,534
Accounts Receivable
Accounts Receivable-Medical 3,219,829 2,304,372
Less: Doubtful Accounts (1,788,679) (1,129,406)
A/R Lockbox Account 4,079 -
Accounts Receivable-Other 51,701 19,738
-----------------------------
Total Accounts Receivable 1,486,930 1,194,704
Inventory
Inventory-Medical Supplies 25,250 14,500
Supplies 5,060 -
-----------------------------
Total Inventory-Medical Supplies 30,310 14,500
Prepaid
Prepaid Insurance 438 (871)
Prepaid Interest - (7,828)
Prepaid Other 29,149 4,054
Deposits - Refundable 41,789 33,154
-----------------------------
Total Prepaid 71,376 28,509
Other Current Assets
Other Receivables 17,995 9,898
------------------------------
Total Other Assets 17,995 9,898
TOTAL CURRENT ASSETS 1,690,951 3,244,145
Fixed Assets
Land 104,600 104,600
Buildings 162,900 162,900
Building Improvements 263,594 216,551
Furniture & Fixtures 181,947 181,066
Clinic Equipment 752,413 629,031
Signs 19,804 6,499
Trucks - 1,700
Office Equipment 5,117 1,313
Computers 102,925 48,291
Software 106,915 95,951
Leasehold Improvements 50,143 38,383
-----------------------------
Total Fixed Assets 1,750,358 1,486,285
Accumulated Depreciation (188,218) (53,846)
-----------------------------
NET FIXED ASSETS 1,562,140 1,432,439
<PAGE>
Other Assets
Organizational Expense 5,229 44,363
Deferred Acquisition Costs 196,625 5,334
Deferred A/R financing fees 30,285 -
Deferred Conversion Costs 11,144 (56,914)
Deferred Recruiting Costs 6,100 -
Goodwill 1,515,883 1,580,126
Non Compete 192,916 245,833
Investments - -
Bond Discount - -
--------------------------
TOTAL OTHER ASSETS 1,958,182 1,818,742
TOTAL ASSETS 5,211,273 6,495,326
<PAGE>
MainStreet Healthcare, Inc.
Balance Sheet
LIABILITIES 12/31/97 12/31/96
Current Liabilities
Notes Payable-Acquisitions 345,719 485,719
Contracts Payable - Current 26,333 26,333
Lease Payable - Current 69,152 -
Accrued Interest - Notes/Lease Payable 29,023 8,154
NCFE Financing Payable 613,543 -
NCFE Financing Reserves (111,487) -
Accounts Payable - Trade 1,149,097 400,839
Payroll Taxes Payable 107,195 78,317
Health Insurance 5,749 13,815
401(k) Plan - Employee 1,040 (7,715)
Accrued Wages 373,433 57,606
Accrued Interest - Redeem. Shares 194,695 5,535
Other Accrued Payables 166,207 5,564
----------------------------
Total Current Liabilities 2,969,699 1,074,167
Long Term Liabilities
LT Notes Payable - Acquisitions 312,272 430,171
Contracts Payable - Long Term 277,505 302,403
Lease Payable - Long Term 91,075 -
Shareholder Loans 19,476 87,336
----------------------------
Total Long Term Liabilities 700,328 819,910
Total Liabilities 3,670,027 1,894,077
EQUITY
Common Stock - -
Class A Common Stock 2,480 2,480
Class B Common Stock 58,450 58,450
Redeemable Preferred Stock 4,283,814 4,283,814
Excess Paid in Capital 715,454 715,454
Accumulated Deficit (42,965) -
Retained Earnings (1,569,272) (1,188)
YTD Net Income (1,906,715) (457,761)
----------------------------
Total Equity 1,541,246 4,601,249
Total Liabilities & Equity 5,211,273 6,495,326
<PAGE>
MainStreet Healthcare, Inc.
MAINSTREET: CONSOLIDATED
<TABLE>
<CAPTION>
Nine Months Ended Nine Months Ended
OTHER DIRECT COSTS: 12/31/97 Pctg. 12/31/96 Pctg.
<S> <C> <C> <C> <C> <C>
6010 Advertising 42,657 0.8% 5,852 0.3%
6011 Yellow Pages 31,413 0.6% 399 0.0%
6400 Computer Supplies 18,149 0.4% 14,305 0.7%
7055 Computer Communications 7,366 0.2% -- 0.0%
6410 Computer Maintenance 11,072 0.2% 1,402 0.1%
6520 Collection Costs 461 0.0% 226 0.0%
6550 Dues & Subscriptions 8,977 0.2% 7,950 0.4%
6590 Entertainment 8,986 0.2% 3,001 0.1%
(7000 Travel 45,840 0.9% 14,187 0.7%
7130 Uniforms 5,914 0.1% 20 0.0%
7150 Licenses 5,554 0.1% 4,760 0.2%
7180 Office Supplies 77,180 1.5% 40,851 1.9%
7190 Outside Services 258 0.0% 2,363 0.1%
7280 Postage 36,432 0.7% 8,653 0.4%
---------- -------
Total Other Direct Costs 300,259 5.9% 103,969 4.8%
Total Direct Clinic Costs: 1,625,382 32.0% 584,006 27.1%
Profit (Loss) after Direct Costs (825,769) (16.3%) (92,166) 4.6%
INDIRECT CLINIC COSTS:
6030 Acctng & Audit Fees 550 0.0% 1,018 0.1%
6031 Legal Fees 22,384 0.4% 8,190 0.4%
6050 Bad Check -- 0.0% 1,306 0.1%
6070 Bank Service Charges 30,765 0.6% 7,007 0.3%
6510 Contributions (25) 0.0% 125 0.0%
6530 Courier 8,093 0.2% 3,500 0.2%
6535 Donations 1,296 0.0% 15 0.0%
(7155 Recruiting Costs 8,007 0.2% 6,792 0.3%
7290 Personnel Recuitment Fees 7,900 0.2% 1,756 0.1%
7120 Long Term Interest Expense 18,459 0.5% 27,730 1.3%
7125 Capitalized Lease Interest Exp 4,607 0.0% -- 0.0%
(7300 Miscellaneous Items 5,876 0.1% 9,229 0.4%
---------- -------
Total Indirect Clinic Costs 107,912 2.1% 66,668 3.1%
Profit (Loss) after Indirect Costs (933,681) (18.4%) (158,834) 1.5%
CORPORATE EXPENSES:
5010 Management Salaries 272,174 5.4% 25,460 1.2%
7110 Officer Life Insurance -- 0.0% -- 0.0%
5020 Office Salaries 187,934 3.7% 56,607 2.6%
5030 Marketing Salaries 28,321 0.6% 25,880 1.2%
5050 Computer Wages 37,917 0.8% 16,115 0.8%
5040 Other Wages & Benefits -- 0.0% 744 0.0%
7210 Sales Promotion -- 0.0% 180 0.0%
7260 Franchise Taxes 2,989 0.1% -- 0.0%
9055 Program (Interest) Cost - A/R
Finance 20,040 0.4% -- 0.0%
---------- -------
Total Corporate Expenses 549,735 10.8% 124,986 5.8%
</TABLE>
<PAGE>
MainStreet Healthcare, Inc.
MAINSTREET: CONSOLIDATED
<TABLE>
<CAPTION>
Nine Months Ended Nine Months Ended
12/31/97 Pctg. 12/31/96 Pctg.
<S> <C> <C> <C> <C>
Net Profits (Loss) before Non Cash Iter (1,483,056) (29.2) (283,820) (4.3%)
Non Cash Items:
6560 Depreciation Expense 114,394 2.3% 53,569 2.2%
6581 Amortization - Goodwill 80,870 1.6% 51,511 1.6%
6582 Amortization - Non Compete 55,000 1.1% 29,167 0.9%
6570 Amortization - Other 2,221 0.0% 277 0.0%
9020 Imputted Interest - NP 22,635 0.5% 33,882 0.2%
9060 Accrued Interest - Redeemable Shar 148,529 2.9% 5,535 0.3%
9070 Accredited Interest - Class A Stk - 0.0% - 0.0%
9080 Restructure Goodwill - 0.0% - 0.0%
9030 Loss on Disposal of Assets - 0.0% - 0.0%
---------- ---------
Total Non Cash Items 423,549 8.3% 173,941 5.1%
Net Profit/(Loss) (1,906,705) (37.6%) (457,761) (9.4%)
</TABLE>
<PAGE>
Exhibit 9.11.1
1. None.
Exhibit 9.11.2
1. Bank One, N.A. financing.
Exhibit 9.11.3
1. Subsequent to March 31, 1997, MainStreet purchased the
practice of L. Lanier Allen which included assets, etc.
Subsequent to that date, the parties agreed to rescind the
relationship. It has been agreed that Dr. Allen would return
his 8,000 shares of Class A common stock and MainStreet would
pay Dr. Allen approximately $20,000.00 and surrender all
assets of the Thomaston practice inclusive of Accounts
Receivable of $25,949 (gross) $19,037 (net).
2. With respect to the termination of the Adel/Thomaston
practice, Dr. Dennis Thomas is no longer an employee of
MainStreet and MainStreet has transferred to Dr. Thomas the
following:
1. Adel Receivables equal to $130,404 (gross) $18,982 (net);
2. Adel Fixed Assets equal to $5,000; and
3. Valdosta Receivables equal to $45,724 (gross) $5,293 (net).
The note to Dr. Thomas for $50,000 was cancelled and he is to
turn over his 20,000 shares of Class A stock of MainStreet
once payment of $20,000 and expenses due have been made,
which is anticipated to be paid prior to closing.
3. There was a pending action against Dr. Schock involving
violation of non-compete provisions, but it has been recently
resolved.
4. On or about August 31, 1997, MainStreet terminated the
practice of Dr. Corker (Valdosta). The accounts receivable
were transferred to Dr. Thomas and the fixed assets remained
with MainStreet.
5. The Macon Creek/Columbia Coliseum practice was
terminated on or about May 31, 1997.
6. MainStreet terminated the employment of Dr. Allen
Miller, Dr. Gary Klein, Dr. Lanier Allen, Dr. Dennis Thomas.
Kathleen Thomas resigned December, 1997.
7. Since March 31, 1997, MainStreet Healthcare Corporation
purchased for $54,000 the practice of Harshad Mehta, M.D. of
Covington, Georgia. The assets included furniture, fixtures,
patient records, accounts receivable and goodwill. The
corporation is paying him $3,000 per month for a period of 18
months. The closing date was on or about September 1, 1997.
8. MainStreet has reached an agreement to terminate a
contract to enter into a lease for a medical practice building
under construction in Valdosta, Georgia in exchange for
agreement to make a $70,000 payment to Rodlock Investments,
L.L.C.
Exhibit 9.11.6
1. See Exhibits 9.11.3 and 9.14.
Exhibit 9.12.1
1. Real Estate taxes are past due in the following practices:
a. Snellville - 2270 Oak Road, Snellville, GA 30278; in the name
of David Ellis in the amount of $961.92; due date - December
20, 1997;
b. Gwinnett - in the name of David Ellis in the amount of
$5,661.11; due date - December 15, 1997.
We are in the process of having these taxes paid and they shall be
paid in full as of the date of Closing.
Exhibit 9.13
See 9.12.1.
Exhibit 9.14
LITIGATION
MainStreet Healthcare Corporation v. Theodore K. Schock, D.O. and
Cherylene T. Johnson, Civil Action File No. 98-0078, Superior
Court of Walton County, Georgia. Filed January 1998. This is a
suit to enforce a restrictive covenant. Dr. Schock threatened to
file a counterclaim for a claimed unpaid bonus. This matter has
been settled with MainStreet allowing Dr. Schock to practice
within the restricted territory and with Dr. Schock forgiving
MainStreet's remaining payments of $100,000.00 due under the
Asset Purchase Agreement.
Paul Brewer, individually and as Administrator of the Estate of
Alma Joan Brewer v. Harold Holloway, D.O. and MainStreet
Healthcare, Corp., Civil Action No. 97-VS-127611-A, State Court
of Fulton County, Georgia. Filed in or about May 1997. This a
medical malpractice case arising from the treatment and death of
Mrs. Brewer prior to the purchase of Dr. Holloway's practice.
This liability was not assumed. Plaintiff's counsel has
indicated he will dismiss MainStreet. If he fails to do so, we
will file a motion to dismiss.
Physician Sales and Services, Inc. v. MainStreet Healthcare,
Inc., Civil Action No. 97-CV- 12575, Superior Court of DeKalb
County, Georgia. Filed October/November 1997. This is a suit on
account for supplies (although it is alleged that equipment was
included) in the amount of $190,915.13. This amount is unsecured.
The answer is due February 9, 1998 under an extension of time.
MainStreet has been remitting $10,000.00 per month since November
1997. MainStreet disputes the amount owed and has demanded an
accounting. MainStreet does not believe that payments in the
amount of $97,000.00 made in 1997 have been credited properly.
MainStreet believes that part of the amount claimed can be
attributed to amounts owed by a South Georgia practice prior to
its acquisition by MainStreet.
Kay Gillon-Martin v. MainStreet Healthcare Corporation, Civil
Action No. 97-1383-5, Superior Court of DeKalb County, Georgia.
Filed December 9, 1997. This is a suit to collect a fee in the
amount of $36,000.00 allegedly owed to Plaintiff for the
recruitment of physicians. MainStreet has filed an answer and
denies that any amount is owed. MainStreet denies that it had an
agreement with Plaintiff.
Deborah K. Gilmore v. MainStreet Healthcare Corporation and A.
Wayne Johnson, Case No. 97M057144, Magistrate Court of DeKalb
County, Georgia. Filed September 30, 1997. This suit has been
settled and a dismissal with prejudice will be filed soon by the
Plaintiff.
Pro-Scribe Services, L.L.C. v. MainStreet Healthcare Corporation,
Civil Action File No. 97SCV853, State Court of Lowndes County,
Georgia. Filed October 10, 1997. This suit has been settled and
a dismissal with prejudice was filed in November, 1997.
<PAGE>
Exhibit 9.14 (Continued)
Georgia Power Federal Credit Union, Plaintiff v. Patricia
Oakenson, Defendant,/MainStreet Healthcare Corporation,
Garnishee, Case No. 98G67092, State Court of DeKalb County,
Georgia. Filed January 15, 1998. This is a garnishment action
of a former employee's wages. An answer indicating such will be
filed.
Aalar, Ltd. d/b/a Atlanta Rent-a-Car v. Joseph Harris, Sr. v.
MainStreet Healthcare, Garnishee, Civil Action File No.
97G-63191, State Court of DeKalb County, Georgia. Judgment
against garnishee entered April 7, 1997. Judgment satisfied.
Aalar, Ltd. d/b/a Atlanta Rent-a-Car v. MainStreet Healthcare
Corporation v. NationsBank, N.A., Garnishee, Case No.
97VX0031484AA, State Court of Fulton County, Georgia. This
garnishment has been paid and satisfied in full.
CLAIMS
Karmeletta Oppenheimer; Ms. Oppenheimer has made demand for
damages arising from an alleged breach of confidentiality, among
other additional related claims. No suit has been filed.
Tracey Hunter; Ms. Hunter made a claim of sexual harassment and
hostile work environment against MainStreet Healthcare
Corporation and Harold Holloway, D.O. This claim has been
resolved.
L. Lanier Allen, M.D.; Dr. Allen's claims concern the termination
of the Asset Purchase Agreement, the Employment Agreement and all
other agreements between him and MainStreet Healthcare
Corporation. Dr. Allen owns 8000 shares of Class A stock in
MainStreet Healthcare Corporation. A settlement has been proposed
that would require MainStreet to return all of the assets and pay
Dr. Allen $20,000.00, and Dr. Allen to return all of the stock.
The settlement has been consummated except the transfer of the
8,000 shares to MainStreet and the tender of $20,000 to Allen.
Gary Klein, M.D.; This is a dispute concerning the termination
of Dr. Klein's Employment Agreement.
Imperial Capital Corporation f/k/a/ Avco Leasing Services, Inc.;
This is a claim to certain computer equipment originally leased
by Gwinnett Family Medicine, P.C. and Dr. David J. Ellis.
MainStreet did not assume the lease(s) in question.
Durr Medical Corporation; This is a claim on account for
$23,023.73. Payments have been made on a semi-regular basis.
<PAGE>
Exhibit 9.14 (Continued)
Frank T. Corker; This is a claim against MainStreet for default
of the Asset Purchase Agreement in the amount of $25,000.00. An
additional, and final, payment of $25,000.00 is due August 1998.
Dennis R. Thomas, M.D.; Dr. Thomas previously sold his practice
to MainStreet Healthcare Corporation. The arrangement was
terminated and certain assets have been transferred to Dr. Thomas
(See Exhibit 9.11.3). Dr. Thomas still is owed $20,000.00 by
MainStreet, at which time he will tender his 20,000 shares of
Class A common stock.
Exhibit 9.17
See Exhibit 9.12.1.
Exhibit 9.18.1
Employee Benefit Plans
[See Attached]
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 9.18.1
EMPLOYEE BENEFIT PLANS
Benefit Plan: Carrier: Policy #: Agent Address
------------ ------- -------- ----- -------
<S> <C> <C> <C> <C> <C>
1. Group Health Insurance United Healthcare BPL29200-25120 David Asbury 1360 Peachtree St
Atlanta, GA 30309
2. Group Life Insurance United Healthcare BPL29200-25120 David Asbury 1360 Peachtree St
Atlanta, GA 30309
3. Group Dental Insurance The Guardian G-318872 David Asbury 1360 Peachtree St
Atlanta, GA 30309
4. Vacation Day Company Policy MainStreet Internal
5. Holiday Company Policy MainStreet Internal
6. Sick Day Company Policy MainStreet Internal
7. Worker's Compensation Policy State Farm Insurance 91-ES-4565-1 Robert Giganti 3145 Tucker
Norcross Rd
Tucker, GA 30084
<CAPTION>
Phone
-----
<S> <C>
1. 404 846 3000
2. 404 846 3000
3. 404 846 3000
4.
5.
6.
7. 770 491 3999
</TABLE>
Exhibit 9.19.1
Insurance
[See Attached]
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 9.19.1
INSURANCE
Insurance Coverage: Carrier: Policy Agent Address
------------------ ------- ------ ----- -------
<S> <C> <C> <C> <C> <C>
1. MalPractice Insurance Mag Mautual Ins. Co. 104620 Tom Harkins 8 Piedmon Ctr
Atlanta, GA 30355
2. Business Liability Insurance State Farm Ins. 91-M1-1254-4 Robert Giganti 3145 Tucker Norcross Rd.
Tucker, GA 30084
3. Worker's Compensation Star Farm Ins. 91-ES-4565-1 Robert Giganti 3145 Tucker Norcross Rd.
Tucker, GA 30084
4. Group Health Insurance United Healthcare Ins. CBPL 29200-25120 David Asbury 1360 Peachtree St.
Atlanta, GA 30309
5. Group Life Insurance United Healthcare Ins. CBPL 29200-25120 David Asbury 1360 Peachtree St.
Atlanta, GA 30309
6. Group Dental Insurance The Guardian Co. G-318872 David Asbury 1360 Peachtree St.
Atlanta, GA 30309
<CAPTION>
Phone
-----
<S> <C>
1. 404 842 5600
2. 770 491 3999
3. 770 491 3999
4. 404 846 3000
5. 404 846 3000
6. 404 846 3000
</TABLE>
Exhibit 9.20
List of Directors, Officers and Employees of each Transferor
[See Attached]
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 9.20
MAINSTREET HEALTHCARE
MEDICAL GROUP PC
TENNESSEE
Wages Bonus
------ -----
<S> <C> <C> <C> <C> <C>
Corporate Officers Laykoon Huang President 166,400.00 none
Robert G. Riddett, Jr. Secretary none none
A. Wayne Johnson Chmn, Asst. Secy none none
Directors Laykoon Huang 166,400.00 none
Robert G. Riddett, Jr. none none
A. Wayne Johnson none none
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 9.20
MAINSTREET HEALTHCARE
MEDICAL GROUP PC
TENNESSEE
EMPLOYEE LIST
Location Departmen Name Salary Wages Expires Bonus
-------- --------- ---- ------ ----- ------- -----
<S> <C> <C> <C> <C> <C> <C>
t
-
Knox West Provider Jea Wook 50/hour none
Sim 130,500.00 91,0 none
Craig Baker 00.0
0
130,500.0
0
Knox Provider Laykoon 166,400.00 166,400.0 12/31/00 none
Nort Huang 0
h
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 9.20
MAINSTREET HEALTHCARE
MEDICAL GROUP PC
GEORGIA
Wages
-------
<S> <C> <C> <C> <C>
Corporate Officers Pamela K. President $ 96,000
Erdman Vice President 108,000
Robert G. Riddett, Secretary 150,000
Jr. Chairman 88,400
A. Wayne Asst. Secy. 0
Johnson Treasurer
Harold E.
Holloway
Michael J. Dare
Directors Pamela K. 96,000
Erdman 108,000
Robert G. Riddett, 150,000
Jr. 88,400
A. Wayne 0
Johnson
Harold E.
Holloway
Michael J. Dare
<CAPTION>
Bonuses
- --------
<C>
none
none
none
none
none
none
none
none
none
none
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 9.20
MAINSTREET HEALTHCARE
MEDICAL GROUP PC
GEORGIA
EMPLOYEES
Bonus
Location Departmen Name Salary Wages Expires Computation
--------- ---------- ------- -------- ------ -------- -----------
<S> <C> <C> <C> <C> <C> <C>
t
-
Tucker Provider Laura Davidson 80,000.00 80,000.0 12/31/00 2.5%/gross
Pamela Erdman 1000/day 0 12/31/98 none
PA Ratna Kanumury 35/hour 96,000.0 none
0
29,120.0
0
Stn Mtn Provider Harold 85/hour 88,400.0 5/1/99 none
Holloway 120,000.00 0 8/4/00 25%>108Q
Lan Mahon 120,000.
00
Covington Provider Nicholas Grego 50/hour 104,000. none
00
Lawrville Provider Wilfred Danley 135,000.00 135,000. 12/31/01 35%>32M
PA Beth Howard 45/hour 00 none
93,600.0
0
Austell Provider Izhak Oliver 208,000.00 208,000. 12/31/01 none
Jasmine Jeffers 145,600.00 00 12/31/03 none
PA Leslie Irvine 70,000.00 124,600. none
00
70,000.0
0
Snellville Provider Frederic 75/hour 12,000.0 none
PA Steinberg 130,000.00 0 10/15/03 30%>108Q
John Tumor 130,000.
00
Conyers Provider Shahid Rafique 130,000.00 130,000. 12/31/03 30%>105Q
00
Auburn Provider Susan Tanner 75/hour 78,000.0 5/30/99 30%>base/.3Q
PA Richard Petit 90,000.00 0 12/15/01 20%/70Q
90,000.0
0
Snapfinger Provider Harshad Mehta 3000/month 36,000.0 none
Ruben 112,320.00 0 12/31/01 20%/150Q
Alexander 112,320.
00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 9.20
MAINSTREET HEALTHCARE
DELAWARE CORPORATION
Wages Bonus
------ -----
<S> <C> <C> <C> <C> <C>
Corporate Officer Robert G. Riddett, President 108,000 none
Jr. Secretary 150,000 none
A. Wayne Johnson EVP, CFO 0 none
Michael J. Dare
Directors Mark D. Schindel 0 none
Kelvin J. 0 none
Pennington 150,000 none
A. Wayne 108,000 none
Johnston
Robert G. Riddett,
Jr.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 9.20
MAINSTREET HEALTHCARE
DELAWARE CORPORATION
EMPLOYEE LIST
Location Department Name Hourly Rate Salaried Wages Bonus
-------- ---------- ---- ------ -------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Tucker Nursing Barb Ernst 13.50 28,080 none
Cynthia Pinckney 13.50 28,080 none
Jill Nielsen 35.00 72,800 none
Jodi Crawford 35.00 72,800 none
Joy Johnson 15.00 31,200 none
Michelle 12.50 26,000 none
Practice Mgr Freeman 18.27 1,461.54 38,000 none
Clerical Rebecca Mele 7.25 15,080 none
Melanie Ernst 9.75 20,280 none
Pamela Stroman 10.00 20,800 none
Sherry Juneau
Stone Mtn Nursing Robbie Hart 20.63 1,650.00 42,900 none
Kim Kneisel 11.50 23,920 none
Practice Mgr Judy Dobson 14.50 1,160.00 30,160 none
Clerical Kelly O'Brien 9.25 19,240 none
Marie Hammond 10.65 22,152 none
Rita Ramsey 10.50 21,840 none
Covington Nursing Djuana Manning 9.00 18,720 none
Leatha Harris 10.00 20,800 none
Practice Mgr Debora Ballard 12.98 1,038.46 27,000 none
Clerical Delbra Bailey 10.50 21,840 none
Sonja Crawley 11.00 22,880 none
Amily Jones 11.00 22,880 none
Lawville Nursing Linda Froman 10.00 20,800 none
Marthalyn 10.00 20,800 none
Mccurry 11.75 24,440 none
Practice Mgr Joy Silvestri 12.50 1,000.00 26,000 none
Clerical Carol Gebhard 7.00 14,560 none
Traci Copeland 8.50 17,680 none
Terri Eliasen 10.00 20,800 none
Lona Mills
<PAGE>
<CAPTION>
Location Department Name Hourly Rate Salaried Wages Bonus
-------- ---------- ---- ------ -------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Austell Nursing Lynne Davis 11.00 22,880 none
Joyce Lawson 10.50 21,840 none
Georgianne 13.00 27,040 none
Donalson 22,880 none
Nancy Tipton 11.00 21,840 none
Lea Stephens 10.50
Practice Mgr 416.52 10,830 none
Clerical Janice Albertson 5.21 20,800 none
Peggy Mccombs 10.00 1,200.00 31,200 none
Patricia Graben 15.00 22,360 none
Linda Hall 10.75 23,920 none
Barbara Bickford 11.50
Snellville Nursing Janis Moore 12.00 24,960 none
Rita Patel 9.25 19,240 none
Sybil Gresham 12.50 26,000 none
Practice Mgr Lynne Swanger 16.83 1,346.16 35,000 none
Clerical Heather Helms 7.50 15,600 none
Janet Lee 8.75 18,200 none
Sue Stanely 7.50 15,600 none
Conyers Nursing Corinne 8.50 17,680 none
Mcdonald 11.00 22,880 none
Practice Mgr Laurie Ledford 16.83 35,000 none
Clerical Nancy Franklin 9.00 18,720 none
Amanda Warren
Auburn Nursing Julie Hougland 11.54 24,003 none
Brenda Duncan 12.65 26,312 none
Practice Mgr Lynn Webb 16.83 1,346.15 35,000 none
Kendra Danley 8.50 17,680 none
Snapfinger Nursing Felicia Johnston 9.00 18,720 none
Jacqueline 15.00 31,200 none
Practice Mgr Minter 14.42 1,153.85 30,000 none
Clerical Debra Upshaw 11.00 22,880 none
Debra Upshaw
Knox West Nursing Shoba Ganta 11.70 24,336 none
Marilyn Geren 13.50 28,080 none
Tawfiq Nimri 11.44 23,795 none
Cheryl Ranz 10.40 21,632 none
Linda Russell 8.76 18,221 none
Fue Mel Tsai 10.40 21,632 none
Practice Mgr Linda Calloway 9.88 790.40 20,550 none
Clerical Hannelore 8.26 17,181 none
Phillips 9.88 20,550 none
Colleen Riddle 7.72 16,058 none
Imogene Parris 7.80 16,224 none
Lof Chen
<PAGE>
<CAPTION>
Location Department Name Hourly Rate Salaried Wages Bonus
-------- ---------- ---- ------ -------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Knox North Nursing Karen Hurst 8.32 17,306 none
Betty Morton 15.86 1,268.80 32,989 none
Melissa Quails 9.48 19,718 none
Marion Parker 11.28 23,462 none
Vickie Phillips 11.44 23,795 none
Sales Michael Farmer 17.31 1,384.62 36,000 none
Practice Mgr Chan Mak 14.42 1,153.60 29,994 none
Clerical Karen Hurst 8.32 17,306 none
Meier Lue 7.90 16,432 none
Ultrasound Nurse Robyn Hayman 14.42 1,153.85 30,000 none
Manager Marc Upshaw 33.65 2,692.31 70,000 none
Driver Derek O'Neal 5.73 458.33 11,917 none
Corporate Corporate Robert Riddett 51.92 4,153.85 108,000 none
Anne O'Neal 15.00 31,200 none
Practice Walt Thom 46.15 3,692.31 96,000 none
Mgmnt Ed Vinson 35.56 2,844.62 73,960 none
Tim Hawkins 26.92 2,153.85 56,000 none
Accounting Connie Viscarra 16.11 1,288.46 33,500 none
Frank Brock 34.62 2,769.23 72,000 none
A/R Carol Griffin 13.00 27,040 none
Collecti Tracey Hunter 11.00 22,880 none
ons Deanne Downs 10.00 20,800 none
</TABLE>
Exhibit 9.21
See Exhibit 9.14 (claim by Tracey Hunter).
Exhibit 9.26
1. Those consents required under the real estate leases,
equipment leases and the financing to Bank One, N.A.
Exhibit 99
NEWS RELEASE
UCI MEDICAL AFFILIATES, INC. ANNOUNCES THE ACQUISITION
OF ATLANTA BASED MAINSTREET HEALTHCARE CORPORATION
A. Wayne Johnson, Chairman and CEO of MainStreet Healthcare
Corporation to be appointed to the UCI Board of Directors
Company Reports First Quarter Fiscal Year 1998 Results
Columbia, SC - February 13, 1998 - UCI Medical Affiliates, inc. (NASDAQ:UCIA)
announced today that it has executed an Acquisition Agreement in which UCI will
acquire the assets of MainStreet Healthcare Corporation of Atlanta, Georgia for
a combination of cash, UCI stock and debt assumption. The closing is expected to
occur on or about March 31, 1998. MainStreet, with annualized revenues of
approximately $7 million and with approximately 100 employees, owns and operates
nine primary care medical offices in the Atlanta, Georgia area and two primary
care medical offices in Knoxville, Tennessee.
With this acquisition, Columbia, S.C. based UCI will operate 51 freestanding,
primary care focused, medical centers in South Carolina, Georgia and Tennessee.
"This expansion into neighboring states fits perfectly into our core business
plan of enhancing our influence as a primary care based physician group which
negotiates with insurance payors for fair rates and which is committed to
quality, affordable and accessible care for our patients," said M.F. McFarland,
III, M.D., UCI's President and Chief Executive Officer.
A. Wayne Johnson, MainStreet's Chairman and Chief Executive Officer, will joint
UCI's Board of Directors concurrent with the closing of the acquisition. Mr.
Johnson brings to the UCI Board added expertise in the areas of investment
banking and multi-state development. Prior to co- founding MainStreet, Mr.
Johnson was President of one of the operating subsidiaries of First Data
Corporation, was an Executive Vice President of Visa USA and was a partner in
the consulting division of Deloitte & Touche LLP.
The Company also announced that revenue for the first quarter of the fiscal year
ending September 30, 1998 increased by 25% to $8,078,000 from $6,488,000 for the
first quarter of the fiscal year ended September 30, 1997. Revenue growth is
attributed to both same center increases in patient visits and patient charges
at established centers and to the expansion in the number of centers UCI
operates.
Patient encounters increased to 115,000 in the first quarter of fiscal year 1998
from 96,000 in the first quarter of fiscal year 1997.
The Company reported a net loss of $877,000 or $.15 per share for the first
quarter of fiscal year 1998, as compared to a profit of $30,000 or $.01 per
share for the first quarter of fiscal year
7
<PAGE>
1997. "Recent losses are attributable in part to assimilation issues related to
recent acquisitions, and in part to the Company continuing to invest heavily in
the information systems and infrastructure necessary to support continued
expansion by practice acquisitions (such as MainStreet), so that it can position
itself to successfully operate in the rapidly changing primary care market
place," said Jerry F. Wells, Jr., CPA, UCI's Executive Vice President of Finance
and Chief Financial Officer.
The Company's December 31, 1997 balance sheet reflects an increase in total
assets to $22,961,000, as compared to $16,549,000 at December 31, 1996, while
stockholders' equity at December 31, 1997 increased to $9,441,000 from
$7,852,000 at December 31, 1996.
UCI Medical Affiliates, Inc. Provides non-medical management and administrative
services for freestanding medical centers which operate as Doctor's Care urgent
care centers, Doctor's Surgical Group, Doctor's Orthopedic Group, the UCI
Division of Family Medicine and Progressive Therapy Services.
This press release contains forward-looking statements subject to the safe
harbor created by the Private Securities Litigation Reform Act of 1995. The
Company cautions readers of this press release that such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the Company
to be materially different from those expressed or implied by such
forward-looking statements. Although the company's management believes that
their expectations of future performance are based on reasonable assumptions
within the bounds of their knowledge of their business and operations, there can
be no assurance that actual results will not differ materially from their
expectations. Factors which could cause actual results to differ from
expectations include, among other things, the difficulty in controlling the
Company's cost of providing healthcare and administering its network of Centers;
the possible negative effects from changes in reimbursement and capitation
payment levels and payment practices by insurance companies, healthcare plans,
government payors and other payment sources; the difficulty of attracting
primary care physicians; the increasing competition for patients among
healthcare providers; possible government regulations in multiple jurisdictions
negatively impacting the existing organizational structure of the Company; the
possible negative effects of prospective healthcare reform; the challenges and
uncertainties in the implementation of the Company's expansion and development
strategy; the dependence on key personnel, and other factors described in other
reports filed by the Company with the Securities and Exchange Commission.
* * *
Contacts: Jerry F. Wells, Jr., CPA Fran Daniels
Executive Vice President of Finance Financial Sciences of America
and Chief Financial Officer (310) 278-4413
UCI Medical Affiliates, Inc.
(803) 252-3661
8
