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EXHIBIT 10.39
ECONOMIC DEVELOPMENT AND
INCENTIVE AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into by and between the
PAMPA ECONOMIC DEVELOPMENT CORPORATION ("PEDC") and UNITED MEDICORP, INC., and
its wholly owned subsidiaries ("Medicorp").
For and in consideration of the grant and guaranty hereinafter provided
and the mutual covenants and agreements contained herein, and intending to be
legally bound hereby, PEDC and MEDICORP, do contract and agree as follows:
1. Definitions and Reference Terms. In addition to any other terms defined
herein, the following terms shall have the meaning set forth with respect
thereto.
a. Full-time Equivalent Employee: Each 2,080 hours logged per year.
b. Calendar year: Beginning January 1 of the referenced year.
c. Incentive Package: All funds to be paid to or expended for the benefit
of Medicorp and any guaranty made on its behalf by the PEDC.
d. City: The City of Pampa, Texas.
2. Incentive Package: PEDC hereby agrees to make the following grants and
loan guaranty to and in favor of Medicorp for its operations within the City
and employees located at its Pampa facility:
a. $192,000.00 cash grant to be paid upon the closing of the purchase of
the real property and the improvements located thereon where Medicorp's
operations will be conducted within the City, subject, however, to the
provisions of Paragraph 3 below.
b. $23,810.00 to be paid, or has been paid, to Hughes-Roth Capital Markets,
Inc. for its services rendered in the negotiations of the incentive
package and the location of Medicorp's operations in the City.
c. PEDC agrees to pay to Medicorp $27,400.00 per year for five (5) years,
payable on the anniversary date of this Agreement (the "Installment Payments").
Such Installment Payments shall be allocated as follows: (i) to reimburse
Medicorp for the total of the monthly payments made by Medicorp for the months
preceding the anniversary date of this Agreement to its lender (principal and
interest) on the loan for the purchase of the building; and (ii) after
deducting such total under (i) from said $27,400.00, Medicorp will pay, within
thirty (30) days after receipt of said Installment payment, the balance of such
annual Installment Payment to Medicorp's lender to be applied to said original
loan; provided, however, Medicorp will not be required to make any payment to
lender in excess of the balance of the loan.
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Medicorp shall grant PEDC a second lien in the form of a deed of trust on
the land and the improvements located thereon to secure PEDC's guaranty of
Medicorp's loan with its lender. This lien shall represent a claim against
Medicorp's equity in the real estate equal to the amount paid by PEDC, if
any, to the first lienholder pursuant to a guaranty provided by PEDC to
such first lienholder. This second lien shall terminate on the earlier of
the date PEDC's guaranty is released by the first lienholder or Medicorp
pays off the balance due to the first lienholder.
PEDC shall be released from any obligation to pay any unpaid Installment
Payments to Medicorp if (i) Medicorp is declared in default of its
obligations to its first lienholder, or (ii) Medicorp discontinues its
operations in Pampa within five (5) years of the date hereof.
d. Employee grant to be paid and adjusted over a term of eight (8) years,
commencing January 1, 2001, and ending December 31, 2008, for a maximum of
$320,000.00, as follows:
(1) PEDC will pay to Medicorp $40,000.00 per calendar year (for a maximum
of $320,000.00) for each of the first eight (8) years commencing with
the calendar year of January 1, 2001, and ending December 31, 2001,
and for each succeeding calendar year thereafter, if Medicorp provides
a minimum of 83,200 hours (2,080 hours X 40 FTEE's) of employment
during such calendar year.
This annual incentive shall be paid in equal quarterly installments of
$10,000.00 so long as 20,800 hours (520 hours X 40 FTEE's) of
employment have been provided in such quarter, which payment will be
made within five (5) days after each quarterly and calendar year
verification as described in (4) below. If for such calendar year
Medicorp has not provided a minimum of 83,200 hours of employment,
Medicorp will reimburse PEDC for quarterly payments received within
thirty (30) days after written demand for payment. If Medicorp fails
to pay such reimbursement within said thirty (30) days, such amount
shall bear interest at the rate of ten percent (10%) per annum based
upon a 365-day year until paid.
(2) PEDC will pay to Medicorp in addition to employee grant incentives set
in (1) above, $1,000.00 per calendar year (for a maximum of
$80,000.00) for each of the first eight (8) years commencing with the
calendar year of January 1, 2001, and ending December 31, 2001, and
for each succeeding calendar year thereafter, for each 2,080 hours of
employment over 83,200 hours of employment but not more than 104,000
hours (2,080 hours X 50 FTEE's) of employment during such calendar
year.
This annual incentive shall be paid in quarterly installments
calculated as the total number of hours paid in such quarter less
20,800 hours divided by 520 hours times $250.00. The fourth quarterly
payment for each calendar year shall be calculated as the total number
of hours paid in such calendar year
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EXHIBIT 10.39
(but not more than 104,000 hours) less 83,200 hours divided by
2,080 hours times $1,000.00 less the sum of the first three
quarterly payments made in such calendar year. To the extent
that such calculation results in a negative balance, Medicorp
will reimburse PEDC for such balance within thirty days after
written demand for payment. If Medicorp fails to pay such
reimbursement within said thirty (30) days, such amount shall
bear interest at the rate of ten percent (10%) per annum based on
a 365-day year until paid.
(3) PEDC will pay to Medicorp in addition to the employee grant
incentives set in (1) and (2) above, $500,000 per calendar year
with no limit or cap, for each of the first eight (8) years
commencing with the calendar year of January 1, 2001, and ending
December 31, 2001, and for each succeeding calendar year
thereafter, for each 2,080 hours of employment over 104,000 hours
of employment during such calendar year.
This annual incentive shall be paid in quarterly installments
calculated as the total number of hours paid in such quarter less
26,000 hours (520 hours X 50 FTEE's) of employment during such
quarter divided by 520 hours times $125.00. The fourth quarterly
payment for each calendar year shall be calculated as the total
number of hours paid in such calendar year less 104,000 hours
divided by 2,080 hours times $500.00 less the sum of the first
three quarterly payments made in such calendar year. To the
extent that such calculation results in a negative balance,
Medicorp will reimburse PEDC for such balance within thirty days
after written demand for payment. If Medicorp fails to pay such
reimbursement within said thirty (30) days, such amount shall
bear interest at the rate of ten percent (10%) per annum based on
a 365-day year until paid.
(4) Verification of the number of hours of employment worked as of
December 31 of each applicable year shall be determined from
Medicorp professional employer organization reports to be filed
by applicable State and Federal laws and regulations, which
organization at the time of execution of the Agreement is
Adminstaff, Inc. with corporate headquarters in Kingwood, Texas,
or any other report(s) acceptable by PEDC.
e. $10,000.00 will be paid to Medicorp if Medicorp has forty (40)
employees by December 31, 2000, as verified under (4) above.
f. If PEDC fails to pay any amount due hereunder within thirty
(30) days of the due date, such amount shall bear interest at
the rate of 10 percent per annum, based on a 365-day year,
until paid.
3. Repayment Obligations of Medicorp. In addition to any repayment
provisions provided in Paragraph 2 above, if Medicorp does not provided 62,400
hours (2,080 hours X 30 FTEE's) of employment during a calendar year as verified
under Paragraph 2d.(4) above, beginning with the year ending December 31, 2001,
Medicorp agrees to pay and reimburse PEDC $24,000.00 per such year no later
than February 15th of the year following the calendar year in which such level
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of full-time employees was not maintained. Each of the eight (8) years shall
stand alone and there will be no cumulation or averaging over the eight (8)
years of this incentive provision. All past due payments shall bear interest at
the rate of ten percent (10%) per annum based upon a 365-day year. All payments
to be made by Medicorp to the PEDC under this Agreement are payable in Pampa,
Gray County, Texas.
4. Representations and Warranties by Medicorp. Medicorp represents and
warrants to PEDC as follows:
a. Good Standing. Medicorp is a Delaware corporation, duly organized,
validly existing and authorized to do business in the State of Texas,
and in good standing under the laws of the States of Delaware and
Texas and has the power and authority on its own to carry on its
business in each jurisdiction in which Medicorp does business.
b. Authority and Compliance. Medicorp has full power and authority to
execute and deliver this Agreement and all other documents related to
the subject matter hereof and to incur and perform the obligations
provided for herein, all of which have been duly authorized by all
proper and necessary action of its board of directors. No consent or
approval of any other third party is required as a condition to the
validity of this Agreement and all other documents related to the
subject matter hereof. Medicorp is in compliance with all laws and
regulatory requires to which it is subject.
c. Litigation. There is no proceeding involving Medicorp pending or, to
its knowledge, threatened before any court or governmental authority,
agency or arbitration authority, except as disclosed to PEDC in
writing and acknowledged by PEDC prior to the date of this Agreement.
d. No Conflicting Agreements. There is no charter, bylaw, stock
provision, partnership agreement or other document pertaining to the
organization, power or authority of Medicorp and no provision of any
existing agreement, mortgage, indenture or contract binding on it or
affecting its property, which would conflict with or in any way
prevent the execution, delivery or carrying out the terms of this
Agreement and all other documents related to the subject matter
hereof.
e. Taxes. All taxes and assessments due and payable by Medicorp have been
paid or are being contested in good faith by appropriate proceedings
and Medicorp has filed all tax returns which it is required to file.
f. Financial Statements. The financial statements of Medicorp heretofore
delivered to PEDC have been prepared in accordance with GAAP applied
on a consistent basis throughout the period involved and fairly
present Medicorp's financial condition as of the date or dates
thereof, and there has been no material adverse change in Medicorp's
financial condition or operations since March 31, 2000. All factual
information furnished by Medicorp to PEDC in connection with this
Agreement and the subject matter hereof is and will be accurate and
complete on the date as of which
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such information is delivered to PEDC and is not and will not be
incomplete by the omission of any material fact necessary to make such
information not misleading.
g. Place of Business. Medicorp's chief executive office is located at
10210 North Central Expressway, Suite 400, Dallas, TX 75231.
h. Continuation of Representations and Warranties. All representations
and warranties made under this Agreement shall be deemed to be made at
and as of the date hereof and at and as of the date of any payments
to be made under this Agreement.
5. Affirmative Covenants by Medicorp. Until performance of all
obligations of Medicorp under this Agreement, Medicorp covenants:
a. Financial Statements and Other Information. Maintain a system of
accounting in accordance with GAAP applied on a consistent basis
throughout the period involved and permit PEDC's officers or
authorized representatives to visit and inspect Medicorp's books of
account records at reasonable times and as often as PEDC may desire.
Unless written notice of another location is given to PEDC, Medicorp's
books and records will be located at its chief executive offices as
set forth above. Medicorp will furnish to PEDC audited company
prepared financial statements (including a balance sheet and profit
and loss statement) for each fiscal year during the term of this
Agreement within ninety (90) days after the close of each fiscal year.
b. Insurance. Maintain insurance with responsible insurance companies
licensed to do business in the State of Texas on such of its
properties, in such amounts and against such risks as is customarily
maintained by similar businesses operating in the same vicinity,
specifically to include fire and extended coverage insurance covering
all assets, and liability insurance in such amounts as are acceptable
to PEDC. Certificates reflecting such insurance coverage shall be
provided to the PEDC within thirty (30) days of the effective date of
this Agreement and within ten (10) days of each renewal date of such
coverage.
c. Existence and Compliance. Maintain its existence, good standing and
qualification to do business, where required and comply with all laws,
regulations and governmental requirements.
d. Taxes and Other Obligations. Pay all of its taxes, assessments and
other obligations, including, but not limited to, taxes, costs and
other expenses arising out of this transaction, as the same become due
and payable, except to the extent the same are being contested in good
faith by appropriate proceedings in a diligent manner.
e. Adverse Conditions or Events. Promptly advise the PEDC in writing of
(i) any condition, event or act which comes to its attention that
would or might materially adversely affect Medicorp's financial or
operations or PEDC's rights under this Agreement; (ii) any litigation
filed by or against Medicorp; (iii) any event that has occurred that
would constitute an event of default under this Agreement; and (iv)
any
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uninsured or partially uninsured loss through fire, theft, liability
or property damages in excess of an aggregate of $50,000.00.
6. Negative Covenant of Medicorp. Until full performance of this
Agreement, Medicorp will not, without the prior written consent of PEDC:
a. Transfer of Assets or Control. Sell, lease, assign or otherwise
dispose of or transfer any assets, except in the normal course
of business.
7. Default. Either party shall be in default under this Agreement if it
shall default in the payment of any amount due and owing hereunder or should it
fail to timely and properly observe, keep or perform any term, covenant,
agreement or condition of this Agreement or any other document related to the
subject matter hereof. In the event of default, either party shall have all
rights, powers and remedies available under this Agreement as well as all rights
and remedies available at law or in equity. In the event it becomes necessary
for either party to file suit to enforce any of the provisions hereof, the
prevailing party in such litigation shall be entitled to recover its costs and
its reasonable attorney's fees incurred in such litigation.
8. Notices. All notices, requests or demands which either party is
required or may desire to give to the other party under any provision
of this Agreement shall be in writing delivered to the other party at
the following addresses:
Pampa Economic Development Corporation
105 E. Foster Avenue
P.O. Box 2494
Pampa, TX 79066-2494
United Medicorp, Inc.
Attn: President
10210 North Central Expressway, Suite 400
Dallas, TX 75231
or to such other address as either may designate by written notice to the other
party. Such notice, request, or demand shall be deemed given or made as
follows: (a) if sent by mail, upon the earlier of the date of receipt or five
(5) days after deposit in the U.S. Mail, first class postage prepaid, certified
with return receipt requested; or (b) if by any other means, upon personal
delivery.
9. Miscellaneous. The parties further covenant and agree:
a. Cumulative Rights and No Waiver. Each and every right granted to
either party under this Agreement or allowed it by law or equity
shall be cumulative of each other and may be exercised in addition to
any and all other rights of such party, and no delay in exercising
any right shall operate as a waiver thereof, nor shall any single or
partial exercise by a party of any right preclude any other or future
exercise thereof or the exercise of any other right.
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EXHIBIT 10.39
b. Applicable Law. This Agreement and the rights and obligations of
the parties hereunder shall be governed and interpreted in
accordance with the laws of the State of Texas.
c. Venue. It is agreed that this Agreement is performable in Gray
County, Texas, and any legal action brought to enforce any of the
provisions hereof shall be brought in Gray County, Texas.
d. Amendment. No modification, consent, amendment or waiver of any
provision of this Agreement, nor consent to any departure by
Medicorp therefrom, shall be effective unless the same shall be in
writing and signed by the parties hereto, and then shall be
effective only in the specified instance and for the purpose for
which given.
e. Binding on Successors and Assigns. This Agreement is binding upon
and shall inure to the benefit of the parties hereto, their
successors and assigns, provided, however, that no assignment or
other transfer by Medicorp of this Agreement, or any part thereof,
shall be made or be effective without the PEDC's prior written
consent.
f. Partial Invalidity. The unenforceability or invalidity of any
provision of this Agreement shall not affect the enforceability or
validity of any other provision herein.
g. Survivability. All covenants, agreements, representations and
warranties made herein or in any other documents relating to the
subject matter hereof shall survive the funding of this Agreement
and shall continue in full force and effect as long as this
Agreement is in effect.
h. Captions. Captions have been included for convenience and shall
have no effect on the interpretation of the particular provision
which it identifies.
EXECUTED in duplicate originals this the 28th day of July, 2000.
<TABLE>
<CAPTION>
PAMPA ECONOMIC DEVELOPMENT
CORPORATION
<S> <C>
ATTEST: By:
-----------------------------
Richard W. Stowers, Jr.,
-------------------------------- President
Jerry Foote, Secretary
UNITED MEDICORP, INC.
ATTEST: By: /s/ PETER W. SEAMAN
-----------------------------
/s/ MARGARET R. WRIGHT Peter W. Seaman,
-------------------------------- Chairman and Chief Executive Officer
Secretary
</TABLE>
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