with copy to, which shall not constitute notice to Seller:
| Burr & Forman LLP |
| Suite 3400, 420 North 20th Street |
| Birmingham, AL 35203 |
| Email: norr@burr.com |
| Attention: Norman M. Orr |
| If to Buyer: | | ACSH Urgent Care Holdings, LLC |
| | | 5429 LBJ Freeway, Suite 850 |
| | | Dallas, Texas 75240 |
| | | Email: mthompson@americancaresource.com |
| | | Attention: Matthew D. Thompson, CFO |
with copies to, which shall not constitute notice to Buyer:
| ACSH Urgent Care Holdings, LLC |
| 5429 LBJ Freeway, Suite 850 |
| Dallas, Texas 75240 |
| Email: awinger@americancaresource.com |
| Attention: Adam S. Winger |
6.6 Governing Law, Venue, Waiver of Jury Trial. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, excluding any conflicts-of-law rules or principles that might refer the governance or construction of this Agreement to the laws of another jurisdiction. The parties hereto hereby irrevocably submit to the jurisdiction of the courts of the State of Alabama, in each case located in Jefferson County, Alabama, and appropriate appellate courts therefrom, over any dispute arising out of or relating to this Agreement or the Transactions and each party hereby irrevocably agrees that all claims in respect of such dispute or proceeding may be heard and determined in such courts, which courts shall be the exclusive courts of jurisdiction and venue. The parties irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may now or hereafter have to the laying of venue of any dispute arising out of or relating to this Agreement or the Transactions brought in such court or any defense of inconvenient forum for the maintenance of such dispute. Each of the parties agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. This consent to jurisdiction and venue is being given solely for purposes of this Agreement and is not intended to, and shall not, confer consent to jurisdiction or venue with respect to any other dispute in which a party to this Agreement may become involved. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. 6.7 Costs of Enforcement. If Buyer or Seller files suit or other action to enforce the terms of this Agreement or to obtain performance as required in this Agreement, then the prevailing party in any such suit or action will be entitled to recover all reasonable costs, including reasonable attorneys' fees and costs, from the non-prevailing party as part of any judgment in such suit or action. The term "prevailing party" will mean the party in whose favor final judgment after appeal (if any) is rendered with respect to the claims asserted in the complaint. 6.8 Schedules and Exhibits; Usage. All Schedules and Exhibits attached hereto are hereby incorporated in this Agreement as if set forth in full herein and, unless otherwise defined therein, all terms used in any Schedule or Exhibit shall have the meanings assigned to such terms in this Agreement. The words "include," "includes" and "including" shall be deemed to be followed by the phrase "without limitation." The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. Unless otherwise expressly provided herein, any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time may be amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. 6.9 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including .pdf) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and shall be valid and effective for all purposes. 6.10 No Requirement To Refer. Notwithstanding anything contained herein, nothing in this Agreement shall be construed to induce, encourage, solicit or reimburse the referral of any patients or business, including any patients or business funded in whole or part by federal or state government programs (i.e., Medicare, Medicaid, TRICARE, etc.) or to limit the freedom of any patient of Seller, Buyer or any of their Affiliates to choose the hospital, healthcare facility or physician from whom such patient will receive medical services. The parties acknowledge that there is no requirement under this Agreement or any other agreement between the parties that Seller or any of his Affiliates refer patients or business to Buyer, any medical practice, walk-in clinic or urgent care clinic managed by Buyer or its Affiliates, including the Company after the Closing Date. No payment made under this Agreement will be in return for the referral of patients or business, including those paid in whole or part by federal or state government programs. The parties acknowledge that none of the benefits granted Seller or any of his Affiliates hereunder are conditioned on any requirement that any such person make referrals to, be in a position to make or influence referrals to, or otherwise generate business for Buyer, any medical practice, walk-in clinic or urgent care clinic managed by Buyer or any of their Affiliates, including the Company after the Closing Date. 6.11 Fair Value. Buyer and Seller acknowledge that the terms of this Agreement have been negotiated at arms' length and that the Purchase Price constitutes fair value for the Shares. IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized representatives of Buyer and each of the Seller as of the Closing Date.
| BUYER: | |
| | | |
| ACSH URGENT CARE HOLDINGS, LLC | |
| a Delaware limited liability company | |
| By: | | /s/ Matthew D. Thompson | |
| Name: | Matthew D. Thompson | |
| Title: | Chief Financial Officer | |
| | | |
| | | |
| By: | | /s/ Jason C. Junkins | |
| Name: | Jason C. Junkins, M.D. | |
EXHIBIT A
PROMISSORY NOTE
| $150,000 | September 12, 2014 |
FOR VALUE RECEIVED, ACSH URGENT CARE HOLDINGS, LLC, a Delaware limited liability company ("Borrower"), hereby promises to pay to JASON C. JUNKINS, M.D., an individual resident of the State of Alabama, ("Lender"), at 107 Mountain Breeze Court, Rainbow City, Alabama 35906, or at such other place as may be designated in writing by Lender from time to time (the "Lender Address"), the principal sum of $150,000, together with interest on the unpaid balance thereof at the rate, on the terms and subject to the conditions set forth herein.
This Promissory Note (this "Note") is delivered by Borrower pursuant to and in accordance with the terms and conditions of that certain Stock Purchase Agreement dated as of September 12, 2014, by and among Borrower and Lender (the "Purchase Agreement"). Capitalized terms used and not otherwise defined in this Note shall have the meanings ascribed to such term in the Purchase Agreement.
1. Payments. Borrower shall make two equal principal payments, plus all accrued but unpaid interest under this Note, one on each of the first and second annual anniversaries of the date of this Note.
2. Interest Rate. The unpaid principal balance of the Note shall bear simple interest at a fixed interest rate of five percent (5%) per annum (the "Interest Rate"). In no event shall the amount of interest due or payable under this Note exceed the maximum rate of interest allowed by applicable law, as amended from time to time. If any payment of interest or in the nature of interest would, under applicable law, cause the foregoing interest rate limitation to be exceeded, then the excess payment shall be credited as a payment of principal, unless Borrower notifies Lender that Borrower desires to have the excess sum returned to Borrower.
3. Maturity. If not sooner prepaid pursuant to the terms of this Note, the unpaid principal balance and all accrued but unpaid interest under this Note shall be due and payable two years from the date of this Note (the "Maturity Date").
4. Prepayment. The principal amount of this Note may be prepaid in full or in part at any time without penalty. Any such prepayment shall be first applied to accrued but unpaid interest, and the balance, if any, to principal.
5. Method of Payment. Payments made pursuant to this Note shall be made in cash or immediately available funds to the Lender Address or by electronic or wire transfer to an account designated by Lender in writing. By Lender's acceptance of this Note, Lender acknowledges that upon satisfaction of all payments pursuant to this Note, Borrower's obligations to Lender under this Note shall be deemed satisfied in full. Upon such satisfaction, Lender shall deliver this Note to Buyer with an indication on the face of the Note that the Note has been paid in full.
6. Working Capital Adjustment. Pursuant to the Purchase Agreement, the principal amount of this Note may be increased or decreased, as the case may be, by the Working Capital Adjustment. The Working Capital Adjustment to this Note shall be effective for all purposes as of (a) the date the Post-Closing Statement is delivered to Lender if no Objection Statement is timely delivered by Lender, and (b) the date all disputes concerning the Post-Closing Calculation are finally resolved if an Objection Statement is timely delivered in accordance with Section 1.4 of the Purchase Agreement.
7. Offset by Borrower. Borrower may offset amounts owed to Borrower by Lender under any of the Transaction Documents against any amount owed to Lender by Borrower under this Note, whether or not such amounts are currently due under this Note, in accordance with Sections 1.4(f) and 5.9 of the Purchase Agreement.
8. Headings. The headings of the sections, subsections, paragraphs and subparagraphs of this Note are used only for convenience of reference and shall not be considered in construing the contents of this Note.
9. Severability. No determination by any court, agency or other governing body that any provision of this Note is invalid or unenforceable in any instance shall affect the validity or enforceability of (a) any other such provision or (b) such provision in any circumstance not controlled by such determination. Each such provision shall be valid and enforceable to the fullest extent allowed by, and shall be construed wherever possible as being consistent with, applicable law.
10. Disputes. The provisions relating to governing law, venue and waiver of jury trial set forth in Section 6.7 of the Purchase Agreement are incorporated in their entirety into this Note as if such provisions were set forth in this Note.
11. Modification. This Note may be modified, amended, discharged or waived only by an agreement in writing signed by Borrower and Lender.
12. Not a Negotiable Instrument. This Note shall not be deemed to be a negotiable instrument, and the rights and obligations under this Note may not be assigned or delegated by Borrower or Lender without the other party's prior written consent.
13. Relationship. Nothing contained in this Note shall be deemed or construed to create a partnership, tenancy-in-common, joint tenancy, joint venture or co-ownership by or between Borrower and Lender.
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned has executed this Note in favor of Lender as of the Closing Date.
| BORROWER: |
| | | |
| ACSH URGENT CARE HOLDINGS, | |
| | LLC, | |
| a Delaware limited liability company | |
| | | |
| By: | | | |
| Name: | Matthew D. Thompson | |
| Title: | Chief Financial Officer | |
EXHIBIT B
MEDICAL DIRECTOR EMPLOYMENT AGREEMENT
THIS MEDICAL DIRECTOR EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of September 12, 2014 (the "Effective Date"), by and between ACSH URGENT CARE HOLDINGS, LLC a Delaware limited liability company ("Company"), and JASON C. JUNKINS, M.D. ("Physician"), a physician duly licensed and registered to practice medicine under the laws of the State of Alabama ("State of Licensure").
RECITALS:
A. Company engages in owning and operating medical centers located in multiple states including the State of Licensure (the Centers located in the State of Licensure, as well as any other center Company may open or acquire from time to time in the State of Licensure or the Northern region of Florida are collectively referred to herein as the "Centers").
B. Company desires to employ Physician to provide such services as described herein; and
C. Physician desires to accept such employment on the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the foregoing recitals and the mutual promises and conditions set forth herein, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Physician and Company agree as follows:
1. Employment. Company hereby employs Physician and Physician hereby accepts such employment upon the terms and conditions set forth herein. The Services (as defined below in Section 2(a)) shall commence on the Effective Date. Immediately following the Effective Date, Physician shall be a full-time physician employee of Company without any further action by either party.
2. Physician's Services and Responsibilities.
(a) General. On and after the Effective Date, Physician shall serve, on a full-time basis, as the medical director of the Centers. In such capacity, Physician shall perform, for and on behalf of Company, the services Company may request from time to time, including those services set forth on Exhibit A attached hereto (collectively, the "Services"). As a full-time employee, Physician shall devote substantially all of Physician's working time, energies, and skills to the exclusive furtherance of Company's business, and shall serve Company diligently and to the best of Physician's ability. The parties anticipate that as a full-time employee, Physician will work on average approximately 50 hours per week. Such work will include at least one clinical shift per week and approximately one or two trips to the Company's Centers located in North Florida per month.
(b) Authority and Control of Company. Physician shall perform the Services in accordance with the policies, procedures, rules and regulations as Company may establish from time to time, and, subject to the exercise of physician's independent medical judgment as set forth in Section 8 below, all work performed by Physician shall be subject to review and evaluation by Company or a representative thereof. Subject to the exercise of Physician's independent medical judgment as set forth in Section 8 below, Physician shall accept all patients assigned to Physician by Company.
(c) Conflicts. Physician shall devote Physician's best efforts to fulfill Physician's obligations hereunder. To that end, Physician shall not, while employed by Company, engage in any other professional or business activity which may reasonably be expected to (i) interfere with or impede Physician's performance of Physician's duties hereunder or (ii) conflict with Physician's undivided loyalty to Company, whether or not such activity is pursued for gain, profit or other pecuniary advantage, without the prior written consent of Company, which consent shall not be unreasonably denied. Notwithstanding any consent given by Company, Physician agrees that the staffing and scheduling needs of Company shall be given preference over any other professional activity in which Physician is permitted to engage. Except as expressly set forth herein, any consent granted to Physician to engage in another professional or business activity shall be revocable by Company, in Company's sole, but reasonable, discretion, at any time upon written notice to Physician, and upon receipt of such notice, Physician shall cease and desist from such activity. Notwithstanding the above, Company hereby irrevocably consents to Physician's continued provision of the services described in the chart below, so long as (i) such services are rendered in a manner consistent with past practices, (ii) require no more of Physician's time than Physician was devoting prior to the Effective Date, and (iii) do not impair or impede Physician's ability to fulfill Physician's obligations hereunder. If Company reasonably determines that such services are impairing or impeding Physician's ability to fulfill Physician's obligations hereunder, Company shall give written notice to Physician of Company's conclusion, and the parties shall negotiate in good faith to resolve the matter. If the parties are unable to resolve the matter within 30 days of Company's delivery of written notice, either party may terminate this Agreement by written notice to the other.
| Service Recipient | Permitted Service |
| | |
| Quality of Life Inpatient Pediatric Service | Physician may continue rendering inpatient treatment until the service recipient is able to secure a replacement provider. |
| | |
| Amedisys Hospice | Physician may continue to serve as a medical director of Amedisys, which services are generally rendered via telephone or fax. |
| | |
| Southern Health Partners | Physician may continue to render medical treatment to inmates. |
| | |
(a) Payor Contracts. Physician shall cooperate with Company and take all necessary or appropriate action to participate, and shall at all times maintain participating physician status, in the payment plans of all private and governmental third-party payors, health maintenance organizations, preferred provider organizations, and other health benefit programs (collectively, "Payor Programs") with which Company (or any of its affiliates) may contract. At the request of Company, Physician shall (i) enter into contracts with Payor Programs in Physician's capacity as an individual, licensed healthcare provider (the "New Contracts"), and (ii) with respect to all contracts with Payor Programs existing as of the Effective Date (the "Existing Contracts" and together with the New Contracts, the "Payor Contracts"), assist the Company in providing notice to, and obtaining consents from, all applicable payor parties under such Existing Contracts as required by the terms of the Existing Contract in order for Physician to render the Services for the economic benefit of Company. Physician shall maintain in good standing (unless Company specifically directs Physician in writing otherwise) all Payor Contracts, and Physician shall not take any action to amend or renegotiate the terms of any Payor Contract without at least 30 days' prior written notice to Company.
3. Financial Terms.
(a) Assignment of Professional Fees. Except as otherwise agreed by the parties, Physician agrees that, during the term of this Agreement, Physician shall not bill to or collect from any patient or third-party payor any amount for services rendered hereunder. Physician hereby irrevocably assigns and grants to Company the right to bill and collect from patients and all Payor Programs for all services rendered by Physician hereunder.
(b) Compensation. From the Effective Date until the termination or expiration of this Agreement, in consideration of the Services, Company shall pay Physician, subject to all applicable payroll taxes and required withholdings, the compensation set forth in this Section 3. The total compensation paid to Physician pursuant to this Agreement has been negotiated in good faith and in arm's-length negotiations and represents the fair market value of the services provided by Physician under this Agreement.
(i) Base Compensation. Company shall pay Physician annual compensation in the amount of $225,000 (the "Base Salary"). The Base Salary shall be payable in biweekly installments according to Company's normal payroll procedures; provided, however, that, for the calendar month that includes the Effective Date and the effective date of the termination of this Agreement, the foregoing amounts shall be pro-rated based on the number of days during such calendar month after the Effective Date or preceding such effective termination date, as applicable.
(ii) Bonus Compensation. In addition to the Base Salary, Physician may be eligible to receive bonus compensation at such times and in such amounts as Company may determine (the "Bonus Compensation"). The Bonus Compensation, if any, (A) is subject in all respects to Physician's continued compliance with the terms and conditions of this Agreement, (B) will be paid at such times as Company may determine after calculation of the financial results of Company's operations for the period for which the Bonus Compensation is to be paid, (C) in any event, shall be earned and payable only if this Agreement is in effect and Physician is employed by Company and not in breach of this Agreement on the date on which payment is made, and (D) shall be paid in accordance with state and federal laws. If, due to Physician's error or omission, Company is required to refund any amount received from any Payor Program, and such refunded amount gave rise or contributed to the payment of Bonus Compensation, Physician's future Bonus Compensation, if any, shall be decreased by the amount of the Bonus Compensation that has been received by Physician and which was based on the refunded amount.
(iii) Benefits. In accordance with their terms, Physician shall be entitled to participate in any plans, insurance policies or contracts maintained by Company relating to retirement, health, disability and other related benefits. Physician's rights and entitlement with respect to any such benefits shall be as set forth in Company's employee handbook, and subject to the provisions of the relevant plans, contracts or policies providing such benefits. Nothing contained herein shall be deemed to impose any obligation on the Company to adopt or maintain any such plans, policies or contracts.
(c) Expense Reimbursement. Company shall reimburse Physician for ordinary and necessary business expenses incurred in the performance of Physician's duties hereunder in accordance with the expense reimbursement policies of Company as set forth in the employee handbook. Notwithstanding the above, the Company shall reimburse Physician for all fees and dues associated with Physician's membership in the Medical Association of the State of Alabama and such other professional societies as agreed to by the parties, as well as all license, permit, and registration fees necessary for Physician to practice medicine in the State of Licensure and the State of Florida.
(d) Vacations; Sick Leave; Continuing Medical Education. During each year of the Agreement, Physician shall be entitled to 29 days of paid vacation/sick leave time. In addition, Physician shall be entitled to such holidays as Company may approve. Physician is encouraged and is expected from time to time to attend meetings, continuing medical education, professional conventions, and post-graduate courses in his/her field of medicine. Company agrees to pay the reasonable amount of travel expenses and other costs incurred by Physician in connection with such continuing medical education activities, but not to exceed $2,500.00 per year. In the event of termination of employment, Physician shall be entitled to receive payment for any unused vacation/sick leave time; provided that Physician complies with all terms and conditions of this Agreement and the Employee Handbook
4. Physician's Representations, Warranties and Covenants.
(a) General. Physician represents, warrants, and covenants at all times during the term of this Agreement that Physician:
(i) is and will maintain a full and unencumbered license, in good standing under the laws of the State of Licensure, to engage in the practice of medicine, and said license will not be suspended, revoked or restricted in any manner at any time during the term of this Agreement;
(ii) has and will maintain current controlled substances registrations issued by applicable state authorities and the United States Drug Enforcement Administration, which registrations have not been surrendered, suspended, revoked or restricted in any manner;
(iii) has and will maintain at least the minimum continuing medical education credits required by the applicable governing board;
(iv) has disclosed to Company the prior occurrence of any of the following matters, and will disclose the occurrence of any such matters after the Effective Date immediately upon the occurrence thereof:
(1) any malpractice suit, formal claim (whether or not filed in court), settlement, settlement allocation, judgment, verdict or decree against Physician;
(2) any disciplinary, peer review or professional review investigation, proceeding or action instituted against Physician by any licensure board, hospital, school, health care facility or entity, professional society or association, Payment Program, peer review or professional review committee or body, or governmental agency;
(3) any complaint, conviction or allegation involving Physician's commission of a felony, or any other crime involving moral turpitude;
(4) any investigation or proceeding, whether administrative, civil or criminal, relating to an allegation against Physician of filing false health care claims, violating anti-kickback laws, or engaging in other billing improprieties relating to the practice of medicine;
(5) any illness or condition that may impair Physician's ability to exercise sound medical judgment;
(6) any use of drugs (whether or not prescribed) or alcohol, which, in Company's reasonable opinion could compromise the reputation or quality of medical care at the Centers, or any participation in any alcohol or controlled substance detoxification, treatment, recovery, rehabilitation, counseling, screening or monitoring program;
(7) any allegation, investigation or proceeding based on any allegation, against Physician, relating to the alleged or potential violation by Physician of professional ethics or standards, or the engaging by Physician in illegal, immoral or other misconduct (of any nature or degree), relating to the practice of medicine;
(8) any denial of an application in any state for licensure as a Physician, for board certification or recertification, for participation in any third party payment program, for state or federal controlled substances registration, or for malpractice insurance; and
(9) any rejection or exclusion, for any duration, from participation in any Payor Program.
(v) shall submit to periodic, random drug testing in accordance with the Company's policies;
(vi) shall abide by the reasonable rules, regulations, policies and directives of Company;
(vii) shall render the clinical Services to patients at the Centers in a competent, professional and ethical manner, in accordance with prevailing standards of general medical practice, and in material compliance with all applicable statutes, regulations, rules, orders and directives of any and all applicable governmental and regulatory bodies having competent jurisdiction;
(viii) shall, in connection with the provision of the Services, use the equipment, instruments, pharmaceuticals and supplies furnished by Company for the purposes for which they are customarily used and in a manner consistent with sound medical practice; and
(ix) shall complete and maintain, in a timely manner, adequate and legible patient records with respect to all services rendered to patients at the Centers according to the policies and procedures established and maintained by Company.
(b) Patient Refunds. Physician represents and warrants to Company that (i) Physician recently became aware of one or more alleged technical violations of the federal Stark Law, (ii) Physician made or caused Company to make all required self-disclosures and refunds to the appropriate governmental party on account of such alleged technical violations, and (iii) Physician will or will cause Company to refund to patients certain payments made by patients associated with the alleged technical violations as soon as expeditiously possible, but no later than sixty (60) days following the date on which Physician became aware of the technical violations.
(c) Florida Licensure. Physician shall, and the Company shall cooperate in good faith with Physician's efforts to, obtain a license to practice medicine in the State of Florida as promptly as possible after the Effective Date. Upon Physician's obtaining of such license, Physician shall maintain such license in active and unencumbered status, in good standing under the laws of the State of Florida, and said license shall not be suspended, revoked or restricted in any manner at any time during the term of this Agreement. Notwithstanding the foregoing, the parties hereby agree that until such time as Physician obtains a license to practice medicine in the State of Florida, Physician will not be requested by Company nor expected by Company to provide any professional medical services at Centers located in the State of Florida.
(d) Operational Covenants. Physician shall assist Company in achieving Company's operational objectives for the Centers, including the Centers located in the State of Licensure (the "Alabama Centers"). Specifically, Physician shall assist Company in operating consistent with agreed-upon financial projections for the Alabama Centers, including without limitation the projected costs and expenses. The parties contemplate the occurrence following steps will be taken with respect to the operation of the Alabama Centers as promptly as practicable after the Effective Date:
(i) Company will discontinue its use of locum tenens professionals, and Physician will take or cause to be taken action to identify and procure part-time, "PRN" professional providers to assist in the staffing of the Alabama Centers.
(ii) Physician will work collaboratively with Company's executive management team, including without limitation the chief financial officer, to monitor operational and financial results compared to agreed-upon projections and operating budget, which practices are consistent with standard corporate practice
5. Professional Liability Insurance. Company shall maintain and pay all premiums for Physician's professional liability (malpractice) insurance policy (which may include the continuation Physician's professional liability policy in effect on the Effective Date) covering claims and losses resulting from the Services provided by Physician at the Centers during the term of this Agreement. Furthermore, Company shall maintain such coverage for at least three years after the termination of Physician's service with the Company (the "Tail Period"). If, due to the nature of Company's then-effective professional liability policy, Company is not required to obtain an extended reporting endorsement (a "Tail Policy") to provide coverage throughout the Tail Period, Company shall maintain its existing coverage throughout the Tail Period at its sole cost and expense. If, due to the nature of Company's then-effective professional liability policy, Company is required to obtain a Tail Policy to provide coverage throughout the Tail Period, Company shall pay a portion of the premium associated with such Tail Policy equal to the full amount of the premium for the Tail Policy multiplied by a fraction with numerator being equal to the number of years Physician served as an employee of Company and denominator being equal to the number of years covered by the tail coverage (including any years covered by the policy's applicable retroactive date). Physician shall be responsible for paying the portion of the Tail Policy premium not paid by Company. To avoid any coverage disruption, Company may, in its sole discretion, pay the full amount of the Tail Policy premium throughout the Tail Period, and Physician shall reimburse Company for Physician's portion with 30 days of Company's delivery of written notice thereof. If Physician fails to reimburse company within 30 days of receipt of such notice, the amount owed to Company shall accrue interest at the rate of 15%. Physician shall also be responsible for all costs incurred by Company to collect such amount (including reasonable attorneys' fees). Physician will fully cooperate in the defense of any asserted claim, whether or not this Agreement is still in effect to the extent Physician has any knowledge of the facts giving rise to the asserted claim. Any services or activities performed for third parties, not at the request or for the benefit of Company during or after the term of this Agreement, will not be deemed to be included in the definition of "Services," and Physician shall not be deemed to be Company's employee, agent or contractor in performing such services or activities. Company shall incur no liability for such outside services or activities, vicarious or otherwise, and Physician shall obtain and be solely responsible for the expense of professional liability insurance covering all such outside services and activities, which coverage shall contain commercially reasonable policy limits, and Physician shall indemnify and hold harmless Company against the entirety of any loss or threatened loss or expense resulting from, arising out of or relating to Physician's outside services or activities.
6. Term. This Agreement shall become effective as of the Effective Date. Unless sooner terminated as provided herein, this Agreement shall remain in full force and effect for 12 months after the Effective Date. This Agreement shall automatically renew on each anniversary of the Effective Date for an additional 12 months.
7. Termination.
(a) Termination by Physician. Physician may terminate this Agreement without cause upon 60 days' prior written notice to Company. Physician may terminate this Agreement with cause in the event Company breaches any representation or material term of this Agreement and such breach has not been cured by Company to the reasonable satisfaction of Physician within 30 days after prior written notice of such breach.
(b) Termination by Company. Company may terminate this Agreement without cause upon 45 days' prior written notice to Physician. Company may terminate this Agreement immediately by providing written notice to Physician upon the occurrence of any of the following:
(i) Physician's death;
(ii) Physician's disability for a continuous period in excess of 90 days due to a mental or physical condition (other than pregnancy) that is determined by a Physician selected by Company to be a permanently disabling condition or a condition that will impair Physician's ability to perform the Services beyond said 90-day period;
(iii) Physician's denial or instruction to a staff member to deny treatment to any patient who presents for care before the close of the stated business hours of the Center in which Physician is then working; provided Physician does not have a legitimate business or medical reason for such denial;
(iv) the suspension, limitation, revocation, or cancellation of Physician's license to practice medicine in the State of Licensure or any other state, or the institution of disciplinary proceedings against Physician by any such state or other applicable regulatory agency having jurisdiction over Physician's professional license or conduct;
(v) any change in control of Company, which shall include the sale of all or substantially all of the assets of Company, the sale of 51% or more of the equity of Company, or any merger or consolidation in which Company is not the surviving entity;
(vi) bankruptcy, insolvency or cessation of operations of Company; any voluntary or involuntary petition for bankruptcy, dissolution, liquidation or winding‑up of the affairs of Company; any assignment by Company for the benefit of creditors;
(vii) Physician's insubordination, gross neglect of duty or professional standards, material and substantial dishonesty, material and substantial disloyalty (except with respect to such outside services as Company consented to above), repeated failure to be available for work when scheduled, willful inattention to the economic or ethical welfare of Company;
(viii) Physician's failure or refusal to faithfully and diligently perform the Services and comply with the provisions of this Agreement, including providing the full scope of clinical services required for the particular Center and patient population in which Physician is then working;
(ix) Physician's use of drugs or alcohol, which, in the reasonable opinion of Company, may be expected to interfere with Physicians duties hereunder;
(x) Physician's engaging in criminal, unprofessional, unethical or fraudulent conduct, or Physician is found guilty of such conduct by any health care entity or governmental agency of competent jurisdiction;
(xi) Company's inability to adequately insure Physician or the termination of Company's professional liability policy covering Physician due to Physician's claims experience or error or omission of Physician;
(xii) Physician is excluded or suspended from participation in Medicare, Medicaid or any other Payor Program; or
(xiii) Physician's breach of any representation or other material term in this Agreement not described in any subsection (1) - (11) above, which breach has not been cured to the reasonable satisfaction of Company within 30 days after prior written notice of such breach.
(c) Termination Obligations. Upon termination of this Agreement for any reason, neither party shall have any further rights or obligations except: (i) as otherwise provided herein, (ii) for rights and obligations relating to or arising out of events or circumstances that occur or exist prior to the effective date of termination, including payment of Physician's compensation through the date of termination, or (iii) as a result of any breach of this Agreement. Upon any such termination, Physician shall (y) immediately repay any indebtedness owed by Physician to Company; provided that Company may, in its sole discretion, deduct or offset any amounts owed to Company by Physician from any amounts that may otherwise be due to Physician from Company; and (z) Physician shall promptly deliver to Company all property in Physician's possession or control which belongs to Company, including, without limitation, all equipment supplied to Physician for use at the Centers, all materials, whether written, descriptive, or maintained in some other form, relating to Company, the Centers, Company's business affairs, patients, or potential patients, and any other Confidential Information (as defined in Section 10) then in Physician's possession or control.
8. Independent Medical Judgment. Physician shall make any and all decisions pertaining or related to the practice of medicine and the care and treatment of patients. Notwithstanding any provision hereof to the contrary, Physician shall perform all services with respect to the diagnosis and treatment of patients in such manner as Physician, in the independent exercise of Physician's independent medical judgment, deems to be in the best interests of the patients. The parties specifically agree and acknowledge that Physician shall have full and final authority over all medical decisions made in the course of Physician's rendering care and treatment to patients at the Centers.
9. Referrals. If, in the exercise of Physician's independent medical judgment, Physician determines that it is in the best interest of a patient to refer the patient to another physician, a hospital or other health care facility, Physician shall refer such patient to a physician, hospital or other health facility designated by Company unless the patient prefers to be referred to another physician, hospital or other health care facility, or the Physician, based on his independent medical judgment, believes referral to another Physician, hospital, or other health care facility is in the best interest of the patient.
10. Confidential Information.
(a) Physician hereby acknowledges and agrees as follows: (i) as a result of Physician's employment by Company and the nature of the Physician's duties as an employee of Company, Confidential Information (as defined herein) will be disclosed or made available to Physician solely for the purpose of enabling Physician to perform such duties; (ii) Company has expended substantial sums to acquire and develop Confidential Information; (iii) Company derives substantial economic benefit from the fact that the Confidential Information is not known to Company's competitors; and (iv) any unauthorized disclosure or use of any Confidential Information would have a serious adverse effect on Company and its legitimate business interests.
(b) For purposes of this Agreement, the term "Confidential Information" means any proprietary and confidential information or data which is related to the medical practice or business activities of Company including, without limitation, (i) all terms and conditions of this Agreement, and (ii) any concept, plan, design, program (including computer program), idea, procedure, system, application, form, process, method, know-how, technique, technology or other information which pertains or relates in any way to the medical practice or business activities of Company including, without limitation (A) lists or other compilations of or information concerning patients, clients, customers, vendors or suppliers of Company, (B) the terms of any Payor Contract, pricing methods and fee schedules, (C) clinical protocols, (D) all other "trade secrets" of Company (as such term is defined in the Alabama Trade Secrets Act, as may be amended, modified or restated from time to time, Code of Alabama Section 8-27-1, et seq. (1975)), (E) personnel information, employee evaluations and employee compensation information, (F) all Patient Records (as defined in Section 11), and (G) all other financial or proprietary business information.
(c) From and after the date hereof, Physician shall hold all Confidential Information in confidence and, subject to subparagraph (d) below, shall not: (i) communicate or disclose any Confidential Information to any party other than (A) Company, (B) Physicians of Company who are authorized to receive such information or (C) a party to whom or which such communication or disclosure has been authorized by Company; (ii) duplicate, copy or make any record of any Confidential Information; or (iii) use any Confidential Information for the benefit of Physician or any party other than Company or for any purpose other than the performance of Physician's duties as an employee of Company. Notwithstanding the above, Physician has the right to access and/or obtain copies of Patient Records, at Physician's sole expense, in accordance with state and federal law upon reasonable prior written notice to Company. Notwithstanding the foregoing, the parties agree that to the extent that such charts, data and other records created in connection with Physician's rendition of professional services are in electronic form, there shall be no charge to Physician for delivering such items to Physician in electronic form.
(d) Notwithstanding the foregoing provisions of this Section 10, and subject to the limitations set forth in Section 11, Physician may disclose Confidential Information to any party if and to the extent required by law and, if such disclosure is made in a manner which complies with the provisions of this subparagraph (d), Physician shall have no liability on account of such disclosure. If Physician becomes legally required to disclose any Confidential Information, Physician shall immediately notify Company of such obligation, the specific Confidential Information which Physician is required to disclose and the party to whom or which Physician is required to make such disclosure so that Company, at its option, may seek a protective order or other appropriate remedy or waive compliance with the provisions of this Paragraph. If Company elects to seek a protective order or other appropriate remedy, Physician shall cooperate with, and not object to, any such action. If Company does not obtain the protective order or other remedy or waives compliance with such provisions, Physician shall disclose only that portion of such Confidential Information which Physician is legally required to disclose.
(e) Expert Witness or Consultant. Until the termination of this Agreement and for two years thereafter, Physician shall not provide services as an expert consultant or as an expert witness to any attorney, or any person employed by an attorney, in a proceeding adverse to Company or any of its Affiliates without first obtaining the approval of the Company.
(f) Company's Remedies for Breach. If Physician breaches or threatens to breach any of Physician's covenants contained in this Section 10, then, in addition to the recovery of damages, Company shall be entitled to institute and prosecute proceedings in any court of competent jurisdiction (either in law or in equity) to enforce the specific performance thereof by Physician or to enjoin Physician from any further or continuing breach without the necessity of showing actual damages or furnishing a bond or other security; provided, however, that nothing herein contained shall be construed as prohibiting Company from pursuing any other remedies available to it on account of such breach including the recovery of damages from Physician. If Company initiates and is successful in any legal action to enforce the provisions of this Section 10 or to seek damages for any breach thereof, Company shall be entitled to recover from Physician reasonable attorneys' fees and all other costs incurred by it in connection with such legal action. All remedies provided herein shall be cumulative and not exclusive and shall be in addition to any other remedies available at law or in equity to Company for any breach of this Agreement.
11. HIPAA and Patient Records. Each party agrees that it will comply with the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), including, without limitation, the privacy, security and electronic transaction regulations adopted thereto. All patient lists, charts, records and case histories created or maintained at the Centers and all records and information coming into the possession of Physician or Company which are the property of any hospital or referring physician and for which Company has assumed temporary or permanent custodial responsibility (collectively, "Patient Records") shall at all times be and remain the property of Company. Unless required by applicable law, no Patient Record shall be disclosed by Physician to any person not authorized by Company, except in strict accordance with medical ethics and such further procedures and rules relating thereto as are promulgated by Company from time to time. Physician agrees that Physician will not, during the term of this Agreement or at any other time thereafter, divulge or disclose any information contained in the Patient Records to any person or entity whatsoever, for any purpose prohibited by applicable law. It is understood that this prohibition does not apply to Patient Records for the purposes of consultation, reference of another physician, claims in connection with accidents or disability made by a patient, or other legitimate uses in furtherance of Company's business and the welfare of Company's patients.
12. Miscellaneous.
(a) Governing Law. This Agreement shall be governed and interpreted in accordance with, and the rights of the parties shall be determined by, the laws of the State of Licensure without regard to principles of conflicts of laws.
(b) Severability. If any provision of this Agreement shall be declared invalid or illegal for any reason whatsoever, then notwithstanding such invalidity or illegality, the remaining terms and provisions of this Agreement shall remain in full force and effect in the same manner as if the invalid or illegal provision had not been contained herein.
(c) Amendment. No alteration or modification of this Agreement, including exhibits hereto, shall be valid unless made in writing and executed by each of the parties hereto.
(d) Counterparts. This Agreement may be executed in more than one counterpart, and delivered via facsimile or other electronic means, and each executed counterpart shall be considered as the original.
(e) Vested Rights. No amendment, supplement or termination of this Agreement shall affect or impair any rights or obligations which mature prior to such amendment, supplement or termination.
(f) Successors. This Agreement shall be binding upon and shall inure to the benefit of the parties and their respective heirs, administrators, executors, successors and representatives.
(g) Notices. Any notice or other communication by one party to the other shall be in writing and shall be given, and be deemed to have been given, if either hand delivered or mailed, postage prepaid, certified mail (return receipt requested), addressed to the address specified for each such party on the signature page to this Agreement. Any party may change the address for notice by notifying the other party, in writing, of the new address.
(h) Further Actions. Each of the parties agrees that it shall hereafter execute and deliver such further instruments and do such further acts and things as may be required or useful to carry out the intent and purpose of this Agreement and as are consistent with the terms hereof
(i) Assignment. Neither party may assign this Agreement without the prior written consent of the other; provided that Company may assign this Agreement to any person or entity that directly, or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, Company, or that obtains such control through one or more transactions.
(j) Survival. This Section 12 and the covenants contained in Sections 5, 7(c), 10, and 11 shall survive any termination or expiration of this Agreement, as well as any other provisions which by their terms survive termination.
(k) Review by Counsel. Physician acknowledges that Physician has been given an opportunity to have this Agreement reviewed by counsel of Physician's choice and that Company has urged Physician to undertake such review. Physician further acknowledges that this Agreement has either been so reviewed or that Physician has determined to waive such review notwithstanding the advice of Company to have this Agreement reviewed on Physician's behalf.
[Signature page follows]
IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the Effective Date.
| COMPANY: |
| |
| ACSH URGENT CARE HOLDINGS, LLC, |
| a Delaware limited liability company |
| |
| By: | |
| Name: | Matthew D. Thompson |
| Title: | Chief Financial Officer |
| |
| Notice Address: |
| |
| ACSH Urgent Care Holdings, LLC |
| 5429 LBJ Freeway, Suite 850 |
| Dallas, Texas 75240 |
| Attention: Matthew D. Thompson, CFO |
| |
| PHYSICIAN: |
| | |
| Sign: | |
| Print: | Jason C. Junkins, M.D. |
| |
| |
| |
| 107 Mountain Breeze Court |
| Rainbow City, Alabama 35906 |
Exhibit A
SERVICES
1. Render professional medical treatment to patients of Company at the Centers in accordance with Company's mutually-agreed upon assignment schedule, which schedule shall be designed to assure that all of medical needs of the Centers' patients are met in a competent, timely and responsive manner; provided, however, that if Physician owns any investment interest in Company, Physician shall not be entitled to, nor shall Physician be expected to, or take action that could reasonably lead Company to, bill for Designated Health Services, as defined by 42 CFR § 411.351, rendered to patients whose treatment is paid for in whole or in part by Medicare or Medicaid until a Stark Law exception for investment interests contained in 45 CFR § 411.356 is satisfied;
2. Supervise and oversee the supervision of all physicians, nurse practitioners, physician assistants, and other licensed professionals at the Centers located in the State of Alabama and the Northern region of Florida;
3. Assist in the establishment of standards for medical care and assist designated management and medical staff at the Centers in the development of policies and procedures for medical care, designed to assure safe, effective and efficient care of patients at the Centers;
4. Assist on an as needed basis on issues pertaining to the electronic health records system and related applications.
5. Oversee the coding, record keeping, record creation and referral practices of physicians and other licensed professionals at the Centers;
6. Oversee the successful operation of on-site labs maintained at the Centers.
7. Review an appropriate number of clinical charts and other medical records arising from services rendered at the Centers to ensure that (1) the medical services are being provided to patients in a manner that is consistent with the plans of treatment prescribed, and (2) clinical records are being maintained in accordance with accepted medical professional standards and practice.
8. Assist in the development and implementation of programs relating to the training, orienting, and supervising of other physicians and mid-level clinical professionals.
9. Assist in the development and implementation of strategic plans for quality and overall improvement of clinical services at the Centers.
10. Assist, consult, cooperate, and participate with management of the Centers and the clinical staff in order to assure and improve quality patient care.
11. Review all incident and accident reports occurring in the Centers and actively participate in the Center's service and safety initiatives.
12. Work with and report directly to the Chief Medical Officer of the Company.
13. Act as liaison between clinical and non-clinical management personnel at the Centers.
14. Assist in reviewing and responding to all state and federal program audits and investigations conducted by all applicable state agencies and departments having jurisdiction over the Centers and providers rendering care at the Centers.
15. Perform such other duties as may from time to time be assigned by Company which are not inconsistent with the Agreement.
EXHIBIT C
OPTION NUMBER: ___________
OPTIONEE: JASON C. JUNKINS, M.D.
DATE OF GRANT: SEPTEMBER 12, 2014
EXERCISE PRICE:____________
COVERED SHARES: 25,000
AMERICAN CARESOURCE HOLDINGS, INC.
2009 EQUITY INCENTIVE PLAN
STOCK OPTION AGREEMENT
1. Definitions. In this Agreement, capitalized terms used herein and not defined elsewhere herein shall have the following meanings:
1.1. "Affiliate" means a corporation, partnership, business trust, limited liability company or other form of business organization at least a majority of the total combined voting power of all classes of stock or other equity interests of which is owned by the Company either directly or indirectly.
1.2. "Agreement" means this Stock Option Agreement.
1.3. "Anniversary Date" is one year or 365 days after the Date of Grant.
1.4. "Board" means the Board of Directors of the Company.
1.5. "Break Even Date" means the date the aggregate, after-tax profit (determined on a cash basis) attributable to the Springville Clinic (excluding all amounts collected from governmental sources including Medicare, Medicaid, and Tricare) equals the aggregate costs incurred by Company and its Affiliates (including amounts reimbursed to Optionee) in connection with the purchase, development, and operation of the Springville Clinic.
1.6. "Cause" means the termination of a Participant's employment, consulting or advisory relationship with the Company or the termination of a Participant's membership on the Board because of the occurrence of any of the following events:
(a) the Participant materially breaches any of his obligations as a key employee, consultant, advisor or director of the Company or any of its Affiliates;
(b) the Participant conducts his duties with respect to the Company or any of its Affiliates in a manner that is improper or negligent; or
(c) the Participant fails to perform his obligations faithfully as provided in any employment or consulting agreement executed between the Company or its Affiliates and the Participant, engages in habitual drunkenness, drug abuse, or commits a felony, fraud or willful misconduct which has resulted, or is likely to result, in material damage to the Company or its Affiliates, or as the Board in its sole discretion may determine.
1.7. "Code" means the Internal Revenue Code of 1986, as amended.
1.8. "Committee" means the committee(s), subcommittee(s), or person(s) charged, pursuant to the provisions of the Plan, with the administration of the Plan.
1.9. "Common Stock" means the common stock, par value $.01 per share, of the Company.
1.10. "Company" means American CareSource Holdings, Inc., a Delaware corporation, and any successor thereto.
1.11. "Covered Shares" means the shares of Common Stock subject to the Option.
1.12. "Date of Exercise" means the date on which the Company receives notice pursuant to Section 5.2 of the exercise, as a whole or in part, of the Option.
1.13. "Date of Expiration" means the date on which the Option shall expire, which shall be the earliest of the following times:
(a) the date of the first notification to the Optionee that the Optionee's Service is terminated by the Company or an Affiliate for Cause;
(b) thirty (30) days after termination of the Optionee's Service for any reason other than by the Company or an Affiliate for Cause, Retirement, death or Disability; provided, however, that if the Optionee dies within thirty (30) days of such termination, the Option shall be exercisable for a period of twelve (12) months after such termination;
(c) three (3) months in the case of Retirement from the Company or an Affiliate and twelve (12) months after termination of the Optionee's Service with the Company or an Affiliate by reason of Disability or death; or
(d) the close of business on the tenth anniversary of the Date of Grant. Notwithstanding the foregoing, if an Optionee owns or is deemed to own (by reason of the attribution rules applicable under Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or its Affiliate, such Option shall not be exercisable after the expiration of five (5) years from the Date of Grant.
1.14. "Date of Grant" means the date set forth at the beginning of this Agreement.
1.15. "Disability" means permanent and total disability as defined in Section 22(e)(3) of the Code.
1.16. "Exchange Act" means the Securities Exchange Act of 1934, as amended.
1.17. "Exercise Price" means the dollar amount per share of Common Stock set forth on page 1 of this Agreement, as it may be adjusted from time to time pursuant to Section 4 hereof.1.18. "Fair Market Value", with respect to Common Stock, shall be determined as follows:
(a) If the Common Stock is at the time listed on any stock exchange or the Nasdaq National Market or the Nasdaq SmallCap Market, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question on the stock exchange or the Nasdaq Market determined by the Board to be the primary market for the Common Stock, as such price is officially reported on such exchange or market. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.
(b) If the Common Stock is at the time traded on the OTC Bulletin Board ("OTCBB"), then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question, as such price is quoted on the OTCBB or any successor system. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.
(c) If the Common Stock is not listed or traded on any stock exchange or Nasdaq System or the OTCBB, the Fair Market Value shall be determined by the Board in good faith and in the manner established by the Board from time to time using a reasonable valuation method.
1.19. "Family Member" means a person who is (a) an ancestor, descendant, sibling or spouse of the Optionee, (b) determined by the Committee, in its sole discretion, to be a family member of the Optionee, or (c) a trust for the benefit of person(s) identified in paragraphs (a) or (b) hereof.
1.20. "Option" means, collectively, the Springville Option and the Sign-on Option.
1.21. "Option Period" means the period specified in Section 3.2 hereof.
1.22. "Optionee" means the person identified on page 1 of this Agreement.
1.23. "Plan" means American CareSource Holdings, Inc. 2009 Equity Incentive Plan, as amended from time to time.
1.24. "Retirement" means termination of employment in accordance with the retirement provisions of any retirement plan maintained by the Company.
1.25. "Service" means, if the Optionee is (a) an employee of the Company and/or any of its Affiliates (as determined by the Committee in its discretion), the Optionee's service as an employee of the Company and/or any of its Affiliates, (b) a member of the Board of Directors of the Company or any of its Affiliates but not an employee of the Company or any of its Affiliates (as determined by the Committee in its discretion), the Optionee's service as a member of such Board of Directors, or (c) a consultant or independent contractor to the Company (as determined by the Committee in its discretion) and is not described in the preceding clause (b), the Optionee's service as a consultant or independent contractor to the Company and/or any of its Affiliates. The Optionee's Service shall not be treated as having terminated if the capacity in which the Optionee provides Service, as described in the preceding sentence, changes, provided that the Optionee's Service is continuous notwithstanding such change.
1.26. "Sign-On Option" means the option to purchase 10,000 of the Covered Shares granted to Optionee in Section 2 of this Agreement, which vest according to the Vesting Schedule.
1.27. "Springville Clinic" means the medical clinic currently being developed by Optionee, the Company or a Company Affiliate in Springville, Alabama.
1.28. "Springville Option" means the option to purchase 15,000 of the Covered Shares granted to Optionee in Section 2 of this Agreement, which vest according to the Vesting Schedule.
1.29. "Vesting Schedule" means the schedule below according to which the Covered Shares vest, on a cumulative basis:
(a) Sign-On Option. Twenty percent (20%) of the Sign-On Option shall vest on the Anniversary Date with the remainder vesting in equal monthly installments over the 48 months immediately after the Anniversary Date
(b) Springville Option. One half of the Springville Option shall vest on the date the Springville Clinic is opened for business. The remaining half of the Springville Option shall vest, if at all, on the Break-Even Date.
2. Grant of Option. Pursuant to the Plan and subject to the terms of this Agreement, the Company hereby grants to the Optionee, as of the Date of Grant, the option to purchase from the Company that number of shares identified as the "Covered Shares" on page 1 of this Agreement, exercisable at the Exercise Price according to the Vesting Schedule.
3. Terms of the Option.
3.1. Type of Option. The Option is a nonstatutory stock option.
3.2. Option Period. Subject to the terms and conditions set forth in this Agreement, the Option may be exercised as to the Covered Shares during the period commencing on the Date of Grant and terminating on the Date of Expiration according to the Vesting Schedule.
3.3. Nontransferability.
(a) Except as set forth in Section 3.3(b), the Option is not transferable by the Optionee other than by will or by the laws of descent and distribution, and is exercisable, during the Optionee's lifetime, only by the Optionee, or, in the event of the Optionee's legal disability, by the Optionee's legal representative.
(b) Notwithstanding any other provision of this Agreement, the Optionee may transfer, not for value, all or part of the Option (the transferred Option or portion thereof being referred to herein as the "Transferred Option") to any Family Member (a "Qualified Transferee"); provided, however, that no transfer may be made unless the Optionee and the Qualified Transferee have made arrangements satisfactory to the Committee for satisfaction of any federal, state and local withholding tax requirements. For the purpose of this Section 3.3(b), a "not for value" transfer is a transfer that is (i) a gift or (ii) a transfer under a domestic relations order in settlement of marital property rights. Following any transfer under this Section 3.3(b), the Transferred Option shall continue to be subject to the same terms and conditions as were applicable immediately prior to transfer, such that, for example, (i) the Option Period applicable to the Qualified Transferee shall expire upon termination of the Optionee's Service for Cause in accordance with Section 3.2 herein, and (ii) any exercise of the Transferred Option by the Qualified Transferee must be in accordance with the procedures set forth in Section 3.4 and Section 5 hereof. Subsequent transfers of the Transferred Option (or any portion thereof) by the Qualified Transferee are prohibited, except to Family Members of the Optionee in accordance with this Section 3.3(b) or by will or the laws of descent and distribution.
3.4. Payment of the Exercise Price. The Optionee, upon exercise, as a whole or in part, of the Option, shall pay the Exercise Price, which payment may be made by any or all of the following means, either alone or in combination:
(a) cash or check payable to the order of the Company;
(b) if, at the time of exercise, the Common Stock is listed for trading on a national securities exchange or automated dealer quotation system delivery (either actual or constructive), such number of shares of unencumbered Common Stock (provided that such shares, if acquired under the Option or under any other option or award granted under the Plan or any other plan sponsored or maintained by the Company, have been held by the Optionee for at least six (6) months) that have an aggregate Fair Market Value on the Date of Exercise equal to that portion of the Exercise Price being paid by delivery of such shares; or
(c) if, at the time of exercise, the Common Stock is listed for trading on a national securities exchange or automated dealer quotation system and in accordance with such rules as may be specified by the Committee, delivery to the Company of a properly executed exercise notice and irrevocable instructions to a registered securities broker promptly to deliver to the Company cash equal to the Exercise Price for that portion of the Option being exercised.
4. Capital Adjustments. The number of Covered Shares as to which the Option has not been exercised, the Exercise Price, and the type of stock or other consideration to be received on exercise of the Option shall be subject to such substitution, adjustment or change, if any, as the Committee in its sole discretion deems appropriate to reflect such events as stock dividends, split-ups, spin-offs, recapitalizations, reclassifications, combinations or exchanges of shares, mergers, consolidations, liquidations, and the like, of or by the Company. Any adjustment determined to be appropriate by the Committee shall be conclusive and shall be binding on the Optionee.
5. Exercise.
5.1. Exercisability. The Option may be exercised at any time, and from time to time, during the Option Period, as a whole or in part to the extent of the percentage of Covered Shares set forth in the Vesting Schedule under Section 1.29 hereof; provided, that (i) in no event shall any such exercise be for less than one hundred (100) Covered Shares or, if the number of Covered Shares remaining subject to the Option total less than one hundred (100), such total remaining shares; (ii) any exercise of the Option shall be in whole shares; and (iii) the Option shall in no event be exercisable for an aggregate of more than the number of Covered Shares set forth on page 1 of this Agreement that shall have vested at the time of exercise under the Vesting Schedule, as adjusted pursuant to Section 4 herein.
5.2. Notice. Subject to Section 5.1, the Option shall be exercised by the delivery to the Company of written notice of such exercise, in such form as the Committee may from time to time prescribe, accompanied by full payment (or means of full payment permitted by Section 3.4 hereof) of the Exercise Price with respect to that portion of the Option being exercised. The form attached to this Agreement as Exhibit A shall be used to exercise the Option.
5.3. Withholding. The Company's obligation to deliver shares of Common Stock upon the exercise of the Option shall be subject to the satisfaction of any applicable federal, state and local tax withholding requirements. The Optionee may satisfy any such withholding obligation by any of the following means or by a combination of such means: (a) tendering a cash payment; (b) if, at the time the withholding obligation arises, the Common Stock is listed for trading on a national securities exchange or automated dealer quotation system, authorizing the Company to withhold shares of Common Stock from the shares otherwise issuable to the Optionee upon exercise of the Option; or (c) if, at the time the withholding obligation arises, the Common Stock is listed for trading on a national securities exchange or automated dealer quotation system, delivering to the Company already-owned and unencumbered shares of Common Stock. For purposes of this Section 5.3, shares of Common Stock that are withheld or delivered to satisfy applicable withholding taxes shall be valued at their Fair Market Value on the date the withholding tax obligation arises, and in no event shall the aggregate Fair Market Value of the shares of Common Stock withheld and/or delivered pursuant to this Section 5.3 exceed the minimum amount of taxes required to be withheld in connection with exercise of the Option.
5.4. Effect. The exercise, as a whole or in part, of the Option shall cause a reduction in the number of Covered Shares as to which the Option may be exercised in an amount equal to the number of shares of Common Stock as to which the Option is exercised.
6. Representations. The Optionee hereby represents and warrants that the Optionee has received and reviewed a copy of the Plan. The Optionee agrees that, upon the issuance of any shares of Common Stock upon the exercise of the Option, the Optionee will, upon the request of the Company, represent and warrant in writing that the Optionee (a) has received and reviewed a copy of the Plan; (b) is capable of evaluating the merits and risks of exercising the Option and acquiring the shares and able to bear the economic risks of such investment; (c) has made such investigation as he or she deems necessary and appropriate for the business and financial prospects of the Company; and (d) is acquiring the shares for investment only and not with a view to resale or other distribution thereof. The Optionee shall make such other representations and warranties that the Committee may request for the purpose of complying with applicable law.
7. Legends. The Optionee agrees that the certificates evidencing the shares of Common Stock issued upon exercise of the Option may include any legend which the Committee deems appropriate to reflect the transfer and other restrictions contained in the Plan, this Agreement or to comply with applicable laws.
8. Rights as Stockholder. The Optionee shall have no rights as a stockholder with respect to any shares of Common Stock subject to the Option until and unless a certificate or certificates representing such shares are issued to the Optionee pursuant to this Agreement.
9. Service. Neither the grant of the Option evidenced by this Agreement nor any term or provision of this Agreement shall constitute or be evidence of any understanding, express or implied, on the part of the Company to employ or retain the Optionee for any period.
10. Subject to the Plan. The Option evidenced by this Agreement and the exercise thereof are subject to the terms and conditions of the Plan, which is incorporated by reference and made a part hereof, but the terms of the Plan shall not be considered an enlargement of any rights or benefits under this Agreement. In addition, the Option is subject to any rules and regulations promulgated by the Committee
11. Governing Law. The validity, construction, interpretation and enforceability of this Agreement shall be determined and governed by the laws of the State of Delaware without giving effect to the principles of conflicts of laws.
12. Severability. If any provision of this Agreement shall be held to be invalid, illegal or unenforceable in any material respect, such provision shall be replaced with a provision that is as close as possible in effect to such invalid, illegal or unenforceable provision, and still be valid, legal and enforceable, and the validity, legality and enforceability of the remainder of this Agreement shall not in any way be affected or impaired thereby.
[Signature Page Follows]
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed on its behalf by the undersigned, thereunto duly authorized, effective as of the Date of Grant.
| ATTEST: | | AMERICAN CARESOURCE HOLDINGS, INC. |
| | | |
| | By: | | |
| | | |
| | Name: | Matthew D. Thompson |
| | Title: | Chief Financial Officer |
Accepted and agreed to as of the Date of Grant:
"EXHIBIT A"
EXERCISE OF OPTION
Board of Directors
American CareSource Holdings, Inc.
5429 Lyndon B. Johnson Freeway, Suite 700
Dallas, TX 75240
To Whom It May Concern:
The undersigned, the Optionee under the Stock Option Agreement ("Agreement") identified as Option No. ___ granted pursuant to the American CareSource Holdings, Inc. 2009 Equity Incentive Plan, hereby irrevocably elects to exercise the Option granted in the Agreement to purchase ______________ shares of Common Stock of American CareSource Holdings, Inc. par value $0.01 per share (the "Option Shares"), and herewith makes payment of $___________ in the form of (check all that apply and if more than one is checked, indicate the amount to be paid by each payment method):
| [ ] | Cash or Check: | |
| | |
| [ ] | Common Stock:1 | |
| | |
| [ ] | Brokerage Transaction:* | |
| | |
The undersigned hereby elects to satisfy applicable withholding requirements by (check all that apply and, if more than one is checked, indicate the amount to be withheld by each withholding method):
| [ ] | Cash or Check: | |
| | |
| [ ] | Common Stock:* | |
| | |
| [ ] | Brokerage Transaction:* | |
Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Agreement.
The undersigned hereby represents as follows:
1. The Optionee has received and reviewed a copy of the Plan;
1 Applicable only if the Common Stock is listed on a national securities exchange or an automated dealer quotation system and the requirements of Section 3.4 or 5.3, as applicable, of the Agreement are satisfied.
2. The Optionee is capable of evaluating the merits and risks of exercising the Option and acquiring the shares of Common Stock and is able to bear the economic risks of such investment;
3. The Optionee has made such investigations as the Optionee deems necessary and appropriate of the business and financial prospects of the Company; and
4. The Optionee is acquiring the shares of Common Stock for investment only and not with a view to resale or other distribution thereof.
The Optionee acknowledges that the Company has made available to the Optionee the opportunity to obtain information to evaluate the merits and risks associated with the Agreement and the transactions contemplated thereby. The Optionee further acknowledges that the investment contemplated by the Option involves a high degree of risk, including risks associated with the Company's business operations and prospects, the lack of a public market for the shares of Common Stock, and the limitations on the transferability of the Option and the shares of Common Stock.
| Date: | | | |
| | | (Signature of Optionee) |
| Date received by American CareSource Holdings, Inc.: | |
Note: Shares of Common Stock being delivered in payment of all or any part of the aggregate Exercise Price must be represented by certificates registered in the name of the Optionee and duly endorsed by the Optionee and by each and every other co-owner in whose name the shares may also be registered.
EXHIBIT D
NEGATIVE COVENANT AGREEMENT
This NEGATIVE COVENANT AGREEMENT (the "Agreement"), dated effective as of September 12, 2014, (the "Effective Date"), is by and between ACSH URGENT CARE HOLDINGS, LLC, a Delaware limited liability company ("Buyer"), and JASON C. JUNKINS, M.D., an individual resident of the State of Alabama ("Seller").
RECITALS:
A. Pursuant to that certain Stock Purchase Agreement dated as of the Effective Date by and between Buyer and Seller (the "Purchase Agreement"), Seller sold and Buyer purchased, all of the Shares of Mid-South Urgent Care, Inc., an Alabama corporation (the "Company"). Capitalized terms used and not defined herein shall have the meaning ascribed thereto in the Purchase Agreement. B. As a condition to Buyer's entering into the Purchase Agreement, Seller has agreed to remain an employee of Company pursuant to a written employment agreement.
C. Seller has intimate knowledge of the Business which knowledge, if exploited, directly or indirectly, by Seller in contravention of this Agreement, would seriously, adversely and irreparably affect the ability of the Buyer to realize the benefits of its acquisition and protect and secure, among other things, (1) certain trade secrets of the Business; (2) valuable confidential and professional information of the Business; (3) relationships with existing patients; (4) and the goodwill associated with the Business and Purchased Assets.
NOW THEREFORE, in consideration of the Purchase Price paid to Seller for the Purchased Assets, the covenants, warranties and mutual agreements herein set forth, and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties do hereby agree as follows:
1. Acknowledgements. Seller acknowledges that the covenants contained in this Agreement are an essential part of the Purchase Agreement and that, but for Seller's agreement to comply with such covenants, Buyer would not have entered into the Purchase Agreement. Seller further acknowledges that the terms and provisions of this Agreement are incorporated by reference into the Purchase Agreement. 2. Negative Covenants. From the Effective Date and continuing until the second anniversary of Seller's separation from service (as an employee, contractor or otherwise) with Company, Buyer or its Affiliates (the "Covered Period"), Seller shall not, directly or indirectly, for Seller's own account or for the benefit of others, within a radius of 25 miles of either of the Centers or any other urgent care, primary care, occupational health or walk-in medical center that Buyer or any of its Affiliates opens, acquires, manages or commits to open, acquire, or manage (whether or not such commitment is binding) at any time prior to Seller's separation of service (each a "Protected Center") (a) call upon, solicit, divert or take away, any patients, customers or clients seen or treated at any Protected Center, (b) hire, attempt to hire, contact or solicit with respect to hiring, any employee or independent contractor employed or engaged by Buyer within the 24-month period immediately preceding the expiration of the Covered Period, or, (c) own any interest in, lease, operate, manage, extend credit to or otherwise participate in (e.g., as an owner or lender) any urgent care, occupational health or walk-in medical business within a 25 mile radius of a Protected Center. The foregoing is not intended nor shall it be interpreted to prohibit Seller from referring any patient for any goods or services to any health care center that in Seller independent medical judgment is in the best interests of such patient. 3. Confidentiality.
a. Seller will hold and keep confidential all Confidential Information (as defined below) to which Seller, at any time shall have become informed, and will not, directly or indirectly, disclose any Confidential Information to any person, firm, corporation or entity, or use the same, or permit the same to be disclosed or used. "Confidential Information" as used herein means proprietary information directly relating to Seller or developed exclusively by Seller or the Company or developed for the use of Seller, the Company or the Business and may include, without limitation, the following types of information regarding Seller, the Company or the Business existing as of the date hereof: corporate information, including business information, plans, strategies, tactics, or policies; marketing information, including strategies, tactics, methods, customer and patient lists, prospects, and market research data; financial data or forecasts; policies or procedures; know-how and ideas; operational information, including trade secrets; and technical information, including designs, drawings and specifications. Confidential Information is limited to that information which is not generally known to the public (other than as a result of unauthorized disclosure by Seller) or within the industry in which Business is operated.
b. This Agreement does not apply to any part of the Confidential Information that Seller is required to disclose by any law or legally binding order of any court, government, semi-government, administrative, fiscal or judicial body, department, commission, authority, tribunal, agency or entity acting within its powers; provided, however that Seller shall use reasonable efforts not to disclose the Confidential Information until the Company has had a reasonable opportunity to formally oppose and restrict such disclosure and in any event Seller shall disclose only the minimum Confidential Information required to comply with the applicable law or order. In the event Seller proposes to disclose the Company's Confidential Information, Seller shall notify the Company of any legal requirement to make such a disclosure and must provide the Company with such reasonable assistance, at the Company's expense, in resisting disclosure as the Company may reasonably require.
4. Non-Disparagement. Seller will not in any way, directly or indirectly, make any statements, written or verbal, that are defamatory, derogatory, or disparaging about, or that may adversely affect the Business, Buyer or its Affiliates, or any of their shareholders, officers, directors, members, owners, employees, personnel, agents or representatives (collectively, the "Buyer Entities"). This includes, but is not limited to, making such statements on any internet site, blog or social media page, including Facebook, Google Plus, Twitter, LinkedIn, or any other internet site, electronic medium, or any other forum or medium. This prohibition applies to statements made under false names, anonymously, or through third parties or other business entities. The terms "derogatory" or "disparaging" as used in this Agreement are intended by the parties to have the broadest possible meaning and are to include any utterances or writings by Seller or at Seller's instruction, whether or not Seller believes or is of the opinion that such utterances or writings are correct or true, which could be reasonably regarded as tending to deprecate, discredit, demean, lower or diminish the regard or reputation of or otherwise adversely affect the Business or the Buyer Entities as a result. 5. Compliance. Seller acknowledges that Seller's compliance with the terms of this Agreement is necessary for Buyer to realize the benefits of its acquisition and to protect and secure, among other things, (a) trade secrets of the Business; (b) valuable confidential and professional information of the Business; (c) relationships with existing patients; and (d) the goodwill associated with the Business and Shares purchased by Buyer under the Purchase Agreement. Further, Seller acknowledges and agrees that irreparable injury, for which the remedy at law would be inadequate, will result to Buyer in the event of a breach of this Agreement. Accordingly, Seller agrees that Buyer will be entitled, in addition to any other remedies and damages available, including reasonable attorney fees incurred in the enforcement of the covenants and restrictions contained in this Agreement, to an injunction to restrain the violation of the terms of this Agreement. 6. Reasonableness; Severability. Seller acknowledge and agrees that the restrictions placed on Seller and the rights and remedies conferred on Buyer are reasonable in time, scope, and territory and are fully required to protect the legitimate business interests of Buyer without a disproportionate detriment to Seller. If any term or provision of this Agreement is determined to be invalid, illegal or unenforceable by any court, agency or tribunal of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Unless expressly provided in this Agreement to the contrary, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the Agreement be performed as originally contemplated to the greatest extent possible. If the parties are unable to mutually agree upon a modification, the court, agency or tribunal of competent jurisdiction may sever the invalid, illegal or unenforceable provision from this Agreement, provided that such action shall not affect, impair, or invalidate the portion of this Agreement not determined to by invalid or unenforceable. 7. Miscellaneous. This Agreement shall be construed and enforced in accordance with, and governed by, the laws of the State of Alabama (without regard to the conflicts of laws principles thereof). This Agreement embodies the entire agreement and understanding between Buyer and Seller with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and relating to the subject matter hereof. Except as set forth in Section 6 of this Agreement, this Agreement may not be modified or amended or any term or provision hereof waived or discharged except in writing signed by the party against whom such amendment, modification, waiver, or discharge is sought to be enforced. All of the terms of this Agreement shall be binding upon the parties hereto and their respective successors and assigns and shall inure to the benefit of and be enforceable by the parties hereto, the Buyer Entities and their respective successors and assigns. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including .pdf) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
[Signature Pages Follows]
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the Effective Date.
| BUYER: |
| |
| ACSH URGENT CARE HOLDINGS, |
| | LLC |
| a Delaware limited liability company |
| |
| By: | | | |
| Name: | Matthew D. Thompson |
| Title: | Chief Financial Officer |
| |
| SELLER: |
| |
| By: | | | |
| | |
| | Name: | Jason C. Junkins, M.D | |
EXHIBIT E
GUARANTY
THIS GUARANTY is made and entered into as of September 12, 2014 (the "Effective Date") by AMERICAN CARESOURCE HOLDINGS, INC., a Delaware corporation ("Guarantor"), is executed and delivered for the benefit of JASON C. JUNKINS, M.D., an individual resident of the State of Alabama ("Seller").
RECITALS:
A. Seller and ACSH Urgent Care Holdings, LLC, a Delaware limited liability company ("Buyer") are parties to that certain Stock Purchase Agreement, dated as of the Effective Date (the "Purchase Agreement"), pursuant to which Buyer purchased from Seller all of the outstanding shares of common stock of Mid-South Urgent Care, Inc., an Alabama corporation (the "Shares");
B. As partial payment of the purchase price for the Shares, Buyer executed and delivered a promissory note in the initial principal amount of $150,000 (the "Note"); and
C. To secure Buyer's payment and performance under the Note, Seller required that Guarantor, as Buyer's parent company, guaranty Buyer's obligations under the Note.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Guarantor hereby agrees as follows:
1. Guaranty. Guarantor, as the owner of 100% of the ownership interests in Buyer, unconditionally guaranties (the "Guaranty") unto Seller all payment and performance obligations of Buyer under the Note (collectively, the "Obligations").
2. Right of Action. The Guaranty is subject to all applicable provisions of the Note, including, without limitation, those affecting Buyer's obligation to satisfy the Obligations. Guarantor acknowledges that upon Buyer's default under the Note, Seller may bring a separate action against Guarantor for collection and enforcement of the Obligations without first proceeding against Buyer. The Guaranty shall be construed under and governed by the laws of the State of Alabama.
3. Termination. The Guaranty shall terminate and Guarantor shall be released from all liability hereunder immediately upon the satisfaction, in full, of the Obligations or the cancellation or termination of the Note.
4. Consent to Alteration. Guarantor acknowledges that Seller and Buyer may, from time to time, agree to modify, amend or alter certain provisions of the Note and Seller may extend the time period for payment of the Obligations without in any way releasing or discharging Guarantor from any of the Obligations.
5. Successors and Assigns of Seller. This Guaranty shall inure to the benefit of Seller and his successors and assigns and shall bind the Guarantor and its executors, administrators, successors and assigns.
[Signatures Page Follows]
IN WITNESS WHEREOF, Guarantor has executed and delivered this Guaranty as of the Effective Date.
| GUARANTOR: |
| |
| AMERICAN CARESOURCE HOLDINGS, INC. |
| a Delaware corporation |
| |
| By: | |
| Name: | Matthew D. Thompson |
| Title: | Chief Financial Officer |
[Signature Page to Guaranty]
2
