EXHIBIT 2.2
ASSET PURCHASE AGREEMENT
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is made to be effective as of
the 1st day of March, 1996, by, between and among UCI Medical Affiliates, Inc.,
a Delaware corporation ("UCI"), UCI Medical Affiliates of South Carolina, Inc.,
a South Carolina corporation and wholly owned subsidiary of UCI ("UCI of SC"),
Doctor's Care, P.A., a South Carolina professional corporation ("Doctor's
Care"), Convenience Medical Services, P.A. ("Seller"), and Stephen A. Harvey,
M.D. ("Harvey").
INTRODUCTION. Seller owns and operates a medical practice located at 108
Highway 17 North, North Myrtle Beach, South Carolina 29582 ("Premises"). Harvey
is the sole shareholder of Seller. UCI of SC owns and/or leases various
medical-related facilities and equipment in South Carolina and has contracted
with Doctor's Care to provide health care services at such facilities. Seller
and/or Harvey desires to (i) lease the Premises to UCI of SC pursuant to a lease
between Harvey and UCI of SC dated as of March 1, 1996, (ii) transfer Seller's
patient records to Doctor's Care, and (iii) transfer to UCI of SC as of 11:59
p.m. on March 1, 1996 (the "Effective Date") certain assets of the Seller upon
the terms and conditions set forth herein. This Agreement provides for the
transfer of the Assets (hereinafter defined) from Seller to UCI of SC.
AGREEMENT. NOW, THEREFORE, in consideration of these premises and the
mutual covenants hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. SALE OF ASSETS TO UCI OF SC.
1.1 Transfer of Assets. At the Closing, for the consideration herein
provided, Seller shall convey, transfer, assign and deliver, or cause to be
conveyed, transferred, assigned, and delivered, to UCI of SC, and UCI of SC
shall purchase and accept from Seller, all of Seller's right, title, and
interest (as the case may be) in and to following assets (collectively
"Assets"):
1.1.1 All of the machinery, equipment, computer and telephone
systems (including hardware and software), furniture, furnishings, office
equipment, and related tangible personal property respecting Seller's
business conducted in the Premises (the "Business"), including (without
limitation) the items described in Exhibit A attached hereto.
1.1.2 All of the Goodwill, permits, licenses, computer software
and related intangible personal property of the Business and certain
equipment leases extant at the Closing Date which are specifically itemized
in Exhibit B attached hereto. Seller shall be responsible for obtaining the
necessary consents, if any, to assignment of such intangible assets. The
parties hereto acknowledge and agree that UCI of SC shall not assume any
equipment leases, personal property leases or real property leases other
than such leases set forth on Exhibit B attached hereto. As to the leases
set forth on Exhibit B, UCI of SC hereby agrees to assume all obligations
thereunder as of the Effective Date.
1.1.3 All of the inventory of the Business, wherever located.
1.1.4 All of Seller's repair and service contracts and warranties
(which are acceptable to UCI of SC in its sole discretion) used or useful
in the Business.
1.2 Method of Transfer. The transfer and sale of the Assets will be
evidenced by appropriate Bills of Sale, assignments and other instruments
executed and delivered by Seller and/or Harvey to UCI of SC and/or Doctor's Care
at Closing, as set forth in this Agreement.
1.3 Not a Sale of Business. This transaction constitutes the sale of assets
by Seller and not the sale of a business; provided, however, that anything
contained in this Agreement to the contrary notwithstanding, it is the intent of
the parties that UCI of SC purchase and acquire and Seller sell and
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transfer the complete operating process of the Business and all properties and
interest necessary to operate the Business substantially as it is presently
being operated.
1.4 Possession. UCI of SC shall take, and Seller shall deliver, possession
of the Assets at completion of Closing (as defined below) to be effective as of
the Effective Date (as defined below).
2. TRANSFER OF SELLER'S PATIENT RECORDS TO DOCTOR'S CARE.
2.1 Transfer of Patient Records. At Closing, for and in consideration of
Ten ($10.00) Dollars and no other consideration, Seller and Harvey shall
transfer and deliver to Doctor's Care all of Harvey and Seller's right, title
and interest in and to any medical records in their possession that were made in
treating patients and all records transferred to Seller concerning prior
treatment of any patient (the "Patient Records").
2.2 Method of Transfer. The transfer of the Patient Records will be
evidenced by an appropriate bill of sale substantially in the form attached
hereto as Exhibit C, executed and delivered by Seller and Harvey to Doctor's
Care at Closing, as set forth in this Agreement.
2.3 Notices. Seller shall cause any public notices to be filed in a timely
manner and to otherwise comply with all requirements of the Physician's Patient
Records Act or any other applicable law, regulation, rule or ordinance related
to the transfer of the Patient Records.
2.4 Possession. Doctor's Care shall pick up and take, and Seller shall
relinquish, possession of the Patient Records at Closing, to be effective as of
the Effective Date (as defined below).
3. CONSIDERATION FOR ACQUISITIONS.
3.1 Purchase Price. The purchase price ("Purchase Price") for the Assets
shall be payable as follows:
3.1.1 Common Stock. UCI shall issue to Seller certificates
representing such numbers of shares of the Common Stock of UCI, $0.05 par
value (the "Shares"), having an aggregate value of Three Hundred Thousand
($300,000) Dollars. For purposes hereof, the price per share of the Shares
shall be the closing ask price on the date immediately prior to the
Effective Date. The Shares, when issued, will be duly authorized, validly
issued, fully paid and non-assessable. The certificate evidencing the
Shares shall bear a restrictive legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES LAWS, HAVE BEEN TAKEN WITHOUT A VIEW TO THE
DISTRIBUTION THEREOF WITHIN THE MEANING OF SUCH ACT, AND MAY NOT
BE SOLD, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN
ACCORDANCE WITH SUCH ACT AND THE RULES AND REGULATIONS THEREUNDER
AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THE
COMPANY WILL NOT TRANSFER SUCH SHARES EXCEPT UPON RECEIPT OF
EVIDENCE SATISFACTORY TO THE COMPANY, WHICH MAY INCLUDE AN OPINION
OF COUNSEL, THAT THE REGISTRATION PROVISIONS OF SUCH ACT HAVE BEEN
COMPLIED WITH, THAT SUCH REGISTRATION IS NOT REQUIRED AND THAT
SUCH TRANSFER WILL NOT VIOLATE ANY APPLICABLE STATE SECURITIES
LAWS.
Seller acknowledges that the Shares shall be "restricted stock"
under Federal Securities laws (meaning that it was purchased other than
through a registered public offering). SEC Rule 144 will allow Seller to
resell the Shares on the market if certain conditions are satisfied,
including but not limited to the requirement that Seller shall have held
the Shares for at least two (2) years.
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3.1.2 Additional Payment. UCI of SC shall pay to Seller as follows:
(1) The sum of Sixty Thousand Dollars ($60,000.00) on or before
Closing.
(2) An additional sum of Two Hundred Forty Thousand Dollars
($240,000.00) due and payable in twenty-four monthly installments,
with interest at ten (10%) percent per annum, with first payment
due on or before April 1, 1996, pursuant to a promissory note
substantially in the form attached hereto as Exhibit D (the
"Note").
4. CLOSING.
4.1 Closing Date. The closing of the sale and purchase of the Assets and
related transactions ("Closing") shall take place on March 1, 1996, commencing
at 12:00 p.m. (local time), at the offices of Coffey, Chandler, & DuRant located
at 1801 Glenns Bay Road, Surfside Beach, South Carolina or such other time and
place as may be mutually agreed upon in writing by the parties (alternatively
"Closing). In the event Closing set forth in this Section 4 is changed to a
different date, all references in this Agreement to Closing shall be deemed to
refer to the time and date agreed upon by the parties, in the manner set forth
herein. The effective date for the transactions contemplated herein shall be
March 1, 1996 (the "Effective Date").
4.2. Transactions at Closing. At the Closing:
4.2.1 Upon receipt of an investment letter in the form of Exhibit
E attached hereto duly executed by Seller and Harvey, UCI shall issue to
Seller a certificate evidencing the Shares pursuant to Section 3.1.1. If
such certificate is not available at Closing, UCI will provide Seller with
a copy of the instructions which UCI will forward to its transfer agent
instructing such agent to issue a certificate evidencing the Shares to
Seller.
4.2.2 Seller and Harvey shall deliver to UCI of SC or Doctor's
Care, as applicable, the bills of sale, assignments, titles, certificates,
and other documents, agreements and instruments, in form and substance
required by this Agreement, as described in Section 4.3.
4.2.3 UCI of SC shall deliver to Seller and Harvey the documents,
agreements and instruments in form and substance required by this
Agreement, as described in Section 4.4..
4.2.4 Harvey and UCI of SC shall each deliver to the other the
lease related to the Premises substantially in the form of Exhibit F
attached hereto (the "Lease").
4.2.5 Harvey and UCI of SC shall each deliver to the other the
non-competition covenant substantially in the form of Exhibit G attached
hereto (the "Non-Compete").
4.2.6 All employees of Seller directly and primarily associated
with the Business will cease to be employees of Seller, and Doctor's Care
and/or UCI of SC may, subject to the exercise of Doctor's Care's and/or UCI
of SC's sole discretion, offer immediately or thereafter to hire any or all
of such persons. Doctor's Care and/or UCI of SC shall be entitled to hire
only those employees of Seller which Doctor's Care and/or UCI of SC elects
in its sole discretion to hire, and Doctor's Care and/or UCI of SC shall
not assume any liability whatsoever to any employee of Seller not hired by
Doctor's Care and/or UCI of SC. Seller will be responsible for paying and
reporting all costs and liabilities, including but not limited to
compensation, federal and state withholding taxes, federal and state
unemployment taxes, all employee benefit costs, and worker's compensation
claims incurred or accrued prior to the Effective Date.
4.2.7 The Parties will take such other actions contemplated at
Closing by this Agreement.
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4.3 Seller and Harvey's Documents. At Closing, Seller and Harvey shall
deliver or cause to be delivered, at Seller's expense, the following duly
executed, lawful and effective documents and instruments:
4.3.1 A bill of sale for tangible personal property and fixtures
composing portions of the Assets substantially in the form attached hereto
as Exhibit H to UCI of SC.
4.3.2 An assignment of intangible personal property composing
portions of the Assets substantially in the form attached hereto as Exhibit
I to UCI of SC.
4.3.3 An Investment Letter substantially in the form attached
hereto as Exhibit E to UCI.
4.3.4 A bill of sale for the Patient Records to Doctor's Care
substantially in the form attached hereto as Exhibit C.
4.3.5 The Lease substantially in the form attached hereto as
Exhibit F to UCI of SC.
4.3.6 Seller will deliver to UCI of SC copies of such duly filed
UCC termination statements, mortgages or lien satisfactions and other
documents, as are reasonably required by UCI of SC to evidence Seller's
and/or Harvey's clear and marketable title to the Assets.
4.3.7 Copy of all current data, contracts and information for
the Business.
4.3.8 Certified Resolutions of the directors and shareholders of
Seller authorizing the transaction contemplated herein.
4.4 Documents of UCI, UCI of SC or Doctor's Care. At Closing UCI, Doctor's
Care and/or UCI of SC shall deliver or cause to be delivered to Seller or Harvey
(as the case may be), at their expense, the following duly executed, lawful, and
effective documents and instruments:
4.4.1 UCI will deliver a certificate evidencing the Shares, or if
such certificate is not available, a copy of the instructions which UCI
will forward to its transfer agent instructing such agent to issue a
certificate evidencing the Shares to Seller.
4.4.2 UCI of SC will deliver the Lease substantially in the form
attached hereto as Exhibit F.
4.4.3 UCI of SC will deliver the Note substantially in the form
attached hereto as Exhibit D.
4.4.4 UCI of SC and Doctor's Care will deliver the security
agreement substantially in the form attached hereto as Exhibit J.
4.5 Conditions of Title. At Closing, the Assets shall be conveyed by
appropriate instruments of conveyance free and clear of all claims, security
interests, liens and encumbrances except personal property and ad valorem taxes
for the year of Closing (which shall be prorated as provided in this Agreement),
or leases which remain outstanding which have been assumed by UCI of SC.
4.6 Transactions Subsequent to Closing.
4.6.1 Employment Matters. Nothing contained herein shall be
construed to create any liability for UCI, UCI of SC or Doctor's Care to
present or past employees of Seller, or to the South Carolina Employment
Security Commission or any other person or entity or regulatory agency for
periods prior to the Effective Date.
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4.6.2 Confidentiality. Seller shall hold in confidence all
documents and information concerning the Business and the Assets (except
that Seller may, after reasonable notice to UCI of SC disclose such
documents and information, or copies or summaries thereof, to any
governmental authority reviewing the transactions contemplated hereby or as
required in Seller's reasonable judgment pursuant to Federal or state laws
or court order).
4.6.3 Taxes. Seller shall file such tax returns and reports and
pay such taxes as are required for periods ending with the day before the
Effective Date.
4.6.4 Creditors. Seller shall promptly pay all of Seller's valid
liabilities and perform all of Seller's valid obligations which Seller has
incurred in connection with the Assets or the operation of the Business.
4.6.5 Miscellaneous Required Acts. The parties hereto shall take
such other actions and comply with other obligations as are required after
Closing under this Agreement or under documents ancillary hereto.
4.7 Other Actions. The parties hereto agree that they will at any time and
from time to time do, execute, acknowledge and deliver, or will cause to be
done, executed, acknowledged and delivered, all such further acts, deeds,
assignments, transfers, conveyances, documents, instruments and assurances as
may be reasonably required by the other party in order to carry out fully and to
effectuate the transactions herein contemplated under, and in accordance with,
the provisions of this Agreement.
5. REPRESENTATIONS AND WARRANTIES OF SELLER AND HARVEY. Seller and Harvey hereby
jointly and severally warrant, represent, and covenant as follows:
5.1 Authority. Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of South Carolina. Seller has full
power and authority to execute this Agreement and to consummate the transactions
contemplated hereby. When executed and delivered, this Agreement shall
constitute valid and binding obligations of Seller and Harvey enforceable in
accordance with its terms and conditions. Neither the execution nor the delivery
of this Agreement nor the consummation of the transactions contemplated hereby,
nor the compliance with any of the terms and conditions hereof, will result in
the breach by Seller or Harvey of any of the terms, conditions, or judgment, law
or other contract, agreement or instrument to which Seller or Harvey is bound,
or constitute a default of such indenture, mortgage, deed of trust, order,
judgment, law or other contract, agreement or instrument.
5.2 Compliance with Laws. Seller is in compliance with all laws,
ordinances, and regulations that govern such Seller's ownership and present use
of the Assets, the violation of which would have an adverse effect on the Assets
or the Business. All of the Assets sold hereunder substantially comply with
applicable environmental, zoning health, OSHA, consumer products, and fire
safety regulations.
5.3 Title to Assets. At Closing, Seller will have, and shall be entitled to
convey, good, marketable and insurable title to the Assets and the condition of
title as required by Section 4.5. At Closing, Seller will not be indebted to any
contractor, laborer, mechanic, material man or any other person or entity for
work, labor, materials or services in connection with the Assets for which any
such person or entity could claim a lien against the Assets. To the best of
Seller's knowledge, there is not pending or threatened condemnation or eminent
domain action respecting the Premises or the Assets.
5.4 Consents. No consent of any third party is required in connection with
Seller's transfer and assignment of the Assets hereunder.
5.5 Litigation. There are no judicial or administrative actions or
proceedings pending, or to the best of Seller's and/or Harvey's knowledge,
threatened that question the validity of this Agreement or any transaction
contemplated hereby or that relate to the Assets, or to the conduct of Business,
including but not limited to condemnation or bankruptcy proceedings, which if
adversely determined would have an adverse
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effect upon Seller's and/or Harvey's ability to enter into this Agreement or
perform its obligations hereunder or upon the use, enjoyment, or value of the
Assets for UCI of SC and/or Doctor's Care.
5.6 Insurance Coverage. Buyer maintains policies of insurance covering the
Assets in amounts and against such losses and risks as are customary for
facilities such as the Business in their present usage, as well as general
public liability "occurrence" coverage in the amount of $1,000,000 per
occurrence and $1,000,000 in the aggregate, and same will be outstanding and
duly in force through Closing. For a period of one (1) year after Closing,
Seller shall maintain a comprehensive general liability "occurrence" policy for
discontinued operations in the amount of $200,000 per occurrence, and UCI of SC
shall be listed as an additional insured under such policy.
5.7 Normal Course. Seller shall have operated the Assets in the normal and
ordinary course of business since at least January 1, 1995, and shall have paid
or caused to be paid promptly when due all city, county and state ad valorem
taxes and similar taxes and assessments and all utility charges and assessments
imposed upon or assessed against the Assets prior to the Closing. Seller shall
exercise its best efforts to preserve the goodwill of the employees, patients,
suppliers and others having business relationships with the Business through
Closing.
5.8 Creditors, Solvency, and Bankruptcy. Seller and Harvey shall not
hinder, delay, defraud, or avoid any obligation to any past present or future
creditor in the transactions contemplated by this Agreement. Seller is currently
solvent and will not be rendered insolvent as a result of the transactions
contemplated hereby. Seller has not initiated, nor does it intend to initiate
with respect to itself as debtor, has had initiated or expects to have initiated
against it as debtor, any proceeding under federal or any state's bankruptcy,
insolvency or similar laws.
5.9 Labor and Employee Benefit Matters. Seller is not a party to any
agreement with any labor organization. Seller has not maintained or sponsored
for any employee or former employee of Seller any fringe or benefit plans,
including without limitation, any retirement, pension, profit sharing,
thrift-savings, non-qualified deferred compensation, incentive compensation,
stock bonus, stock option (qualified or non-qualified), cash bonus, employee
stock ownership (including, without limitation, payroll related employee stock
ownership), insurance, medical, welfare or vacation plans of any kind and any
"employee benefit plan" (as defined in Section 3(3) of Title I of the Employment
Retirement Income Security Act of 1974, as amended ("ERISA") or any voluntary
employees' beneficiary association (as defined in Section 501(c) (9) of the
Internal Revenue Code) or combination of the foregoing. Seller has not incurred
any accumulated funding deficiency within the meaning of ERISA or any liability
to the Pension Benefit Guaranty Corporation established under ERISA, nor has any
tax been assessed against Seller for the alleged violation of the Internal
Revenue Code with respect to the Business or its operation.
5.10 Payables and Taxes. Seller will pay all accounts payable and taxes,
assessments, and charges respecting the Assets incurring prior to the Effective
Date within a reasonable amount of time following Closing and will protect the
reputation of UCI of SC by promptly paying all the valid debts and obligations
of Seller which have been incurred in connection with the operation of the
Business prior to the Effective Date and which affect the Assets. Seller has
paid all taxes, license fees or other charges levied, assessed or imposed upon
the Business and any of the Assets incurring after the Effective Date.
5.11 Workers' Compensation. There are no worker compensation or similar
claims or actions pending or threatened, and Seller and/or Harvey does not know
of facts which would make such claims timely, by past or present employees of
Seller.
5.12 Status of Assets. The Assets sold hereunder constitute all of the
assets of the Business and include all property, rights, and intangibles
necessary for UCI of SC and/or Doctor's Care to operate after Closing a business
similar to the Business as presently conducted. All material inventory systems,
machinery, equipment, and other tangible property which are portions of the
Assets are generally sound, in good repair, may be safely operated within all
applicable standards or regulations in their present conditions, and are in
merchantable condition. All material contracts, commitments, and similar rights
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which are portions of the Assets are valid, binding, enforceable, and without
known default in violation of law. The information related to accounts
receivable provided to UCI of SC is materially accurate and reflect valid,
binding, and enforceable rights of the Business which shall be lawfully
transferred to UCI of SC hereunder.
5.13 No Adverse Conditions. Except as previously disclosed in writing to
UCI of SC, there are no adverse conditions or circumstances that may interfere
with the use and enjoyment of, or opportunity to resell or encumber, any of the
Assets, or might otherwise impede UCI of SC's ability to operate a business
similar to the Business utilizing the Assets.
5.14 Brokerage. Neither Seller nor Harvey has dealt with any broker in
connection with this transaction, and no brokerage commission nor claim thereof
shall accrue or become payable to any person or entity respecting this
transaction.
5.15 Disclosures. To the best of Seller's and Harvey's knowledge, all
information and data furnished by Seller and/or Harvey to UCI, UCI of SC or
Doctor's Care with respect to the Assets and the Business will be materially
true, correct, and complete, and not materially misleading.
5.16 Representations and Warranties at Closing. Except as expressly
otherwise permitted in this Agreement, the representations and warranties of
Seller and/or Harvey set forth in this Agreement shall be true as of the
Effective Date as though such representations and warranties were made on such
date, unless they reference a specific earlier date whereupon, as of the
Effective Date, they shall be true as at the earlier date referenced.
5.17 Environmental. To the best of Seller's and Harvey's knowledge, the
Premises is not now used and has never been used, as a gasoline station or other
site for the storage of petroleum products, or as a garbage or refuse dump site,
a landfill, a waste disposed facility for the storage, processing, treatment or
temporary or permanent disposal of regulated waste materials, including without
limitation solid, industrial, toxic, hazardous, radioactive, nuclear or
putrescible waste or sewage; and, to the best of Seller's and Harvey's
knowledge, the Premises is in substantial compliance with all applicable
environmental laws, regulations, codes and ordinances.
6. REPRESENTATIONS AND WARRANTIES OF UCI, DOCTOR'S CARE AND UCI OF SC. UCI,
Doctor's Care and UCI of SC hereby jointly and severally represent, warrant, and
covenant as follows:
6.1 Organization and Good Standing. UCI is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Delaware
and has full corporate power to carry on its businesses and to own and operate
its properties and assets as presently owned and operated. UCI of SC is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of South Carolina and has full corporate power to carry on its
businesses and to own and operate its properties and assets as presently owned
and operated. Doctor's Care is a professional association duly organized,
validly existing, and in good standing under the laws of the State of South
Carolina and has full corporate power to carry on its businesses and to own and
operate its properties and assets as presently owned and operated.
6.2 Authority of Buyer. UCI, Doctor's Care and UCI of SC each have taken
all corporate action necessary to approve and authorized the execution of this
Agreement, and to consummate the transactions contemplated hereby. Each of their
respective representatives signing this Agreement has full power and authority
to execute this Agreement in the indicated capacity and to consummate the
transactions contemplated hereby. When executed and delivered, this Agreement
shall constitute valid and binding obligations of UCI, Doctor's Care and UCI of
SC, enforceable in accordance with its terms and conditions except as
enforcement may be limited by applicable bankrupt, insolvency or similar laws
effecting creditors rights generally and by principles of equity. Neither the
execution nor the delivery of this Agreement nor the consummation of the
transactions contemplated hereby, nor compliance with all of the terms and
conditions hereof, will result in the breach by UCI, Doctor's Care or UCI of SC
of any of the terms, conditions or provisions of any of their respective of
trust, order, judgment, law, or other contract, agreement or
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instrument to which either of them is a party, or by which either is bound, or
constitute a default of such indenture, mortgage, deed of trust, order,
judgment, law, or other contract, agreement or instrument.
6.3 Brokerage. Neither UCI, Doctor's Care, nor UCI of SC has dealt with any
broker in connection with this transaction, and no brokerage commission nor
claim therefor shall accrue or become payable to any person or entity respecting
this transaction.
6.4 Consents. No consent of any third party is required in connection with
the purchase and acceptance of the Assets from Seller hereunder.
6.5 Litigation. There are no judicial or administrative actions or
proceedings pending, or to the best knowledge of UCI, Doctor's Care or UCI of
SC, threatened that question the validity of this Agreement or any transaction
contemplated hereby, which if adversely determined would have a material adverse
effect upon their ability to enter into this Agreement or perform their
respective obligations hereunder.
6.6 Creditors, Solvency and Bankruptcy. UCI, Doctor's Care or UCI of SC
shall not hinder, delay, defraud or avoid any obligations to any past, present
or future creditor of UCI, Doctor's Care or UCI of SC respectively in the
transactions contemplated by this Agreement. The above-mentioned parties are
currently solvent and will not be rendered insolvent as a result of the
transactions contemplated hereby. UCI, Doctor's Care or UCI of SC does not
intend to initiate with respect to itself as a debtor, nor do they expect to
have initiated against it as a debtor, any proceeding under federal or any
state's bankruptcy, insolvency or similar laws.
6.7 Representations and Warranties at Closing. Except as expressly
otherwise permitted in this Agreement, the representations and warranties of
UCI, Doctor's Care and UCI of SC set forth in this Agreement shall be true at
the Effective Date as though such representations and warranties were made on
such date, unless they reference a specific earlier date whereupon, at Effective
Date, they shall be true as at the earlier date referenced.
7. CONDITIONS PRECEDENT.
7.1 Conditions of UCI, UCI of SC and Doctor's Care. The obligations of UCI,
UCI of SC and Doctor's Care hereunder shall be subject, to the extent not
waived, to the satisfaction of each of the following conditions at the Closing:
7.1.1 Representation and Warranties. The representations and
warranties of Seller and Harvey contained in this Agreement shall be true
and correct in all material respects as of the date when made and, except
for changes specifically contemplated by this Agreement, on and as of the
Effective Date as though such representations and warranties had been made
as of the Effective Date.
7.1.2 Deliveries. The release of documents which Seller is
obligated to make under Section 4 shall have been made.
8. COST AND EXPENSES .
8.1 Transactional Cost. The parties hereto shall be responsible for their
respective attorney's fees, accountants' fees, experts' fees, and other expenses
incurred by them in connection with the negotiations and Closing of this
transaction; provided however, in the event litigation is commenced to enforce
any rights under this Agreement or to pursue any other remedy available to any
party, all legal expense or other direct costs of litigation of the prevailing
party shall be paid by the other party.
8.2 Proration of Taxes and Charges. All personal property taxes, public
utility charges and like charges (which are not terminated and paid as of
Closing by Seller), if any, relating to the personal (tangible and intangible)
property comprising the Assets shall be prorated as of the Effective Date, in
accordance with regular accounting procedure. Settlement at Closing will be made
on proration of estimates of such
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taxes and charges. If, as the result of such proration at Closing, a net balance
is owed by Seller to UCI of SC, or visa versa, the amount thereof shall be paid
to such party at or within thirty (30) days after receipt of the next succeeding
payment notice.
8.3 Sales Taxes. Seller shall be responsible for, and shall pay, all sales
taxes, if any, applicable to the sale of the Assets as called for herein.
9. INDEMNITY RIGHTS.
9.1 General Indemnity. Seller and Harvey shall jointly and severally
indemnify and hold UCI, Doctor's Care and UCI of SC and their respective
officers, directors and agents harmless, from any and all losses, damages,
liabilities, claims, suits, demands, penalties, assessments, obligations, causes
of actions or costs (including reasonable litigation expenses and legal fees)
asserted against or incurred by UCI, Doctor's Care or UCI of SC as a result of
any breach by Seller and/or Harvey of any covenant, warranty representation, or
agreement, made by Seller and/or Harvey herein or in agreements related hereto
including but not limited to litigation expenses and legal fees that might be
incurred because of such breach.
9.2 Special Indemnities. Seller and Harvey shall jointly and severally
indemnify and hold UCI, UCI of SC and Doctor's Care and their respective
officers, directors, and agents harmless from any and all losses, damages,
liabilities, claims, suits, demands, penalties, assessments, obligations, causes
of action, or costs (including reasonable litigation expenses and legal fees)
asserted against or incurred by UCI, Doctor's Care, or UCI of SC as a result of:
9.2.1 Environmental. Any existing environmental contamination or
the remediation thereof at the Premises.
9.2.2 Award or Settlement. Any lawsuit or similar claim against
Seller and/or Harvey arising from events or conditions prior to the
Effective Date.
9.2.3 Title to Assets. Any challenge to: (a) Seller's title to the
Assets, or (b) the transfer of such title and interest to the Assets to UCI
of SC pursuant to the Agreement.
9.2.4 Accounts Payable. Any accounts payable, taxes, assessments,
or charges of Seller and/or Harvey.
9.3 Set Off and Recoupment. In addition to any other available remedies,
UCI of SC, UCI, and Doctor's Care shall have the right of set off and recoupment
against amounts coming due to Seller or Harvey under this Agreement, Note,
Lease, or any other instruments ancillary hereto in the event Seller breaches
this Agreement or any right of indemnification arises in favor of UCI, UCI of
SC, or Doctor's Care under this Agreement. Seller and Harvey retain the right to
lawfully contest any such set off or recoupment in an action to collect any
amounts due Seller and/or Harvey under this Agreement, Note, Lease, or such
other ancillary instruments. The inclusion of this special set off or recoupment
provision shall not effect the availability, if any, of rights of set off or
recoupment arising at law or in equity.
10. EXISTING LIABILITIES. Neither UCI, Doctor's Care nor UCI of SC assumes any,
and hereby expressly disclaims all, obligations or liabilities of Seller,
contingent or absolute, including (without limitation) liabilities for (i)
federal or state income, payroll, property, or sales taxes for any period, or
(ii) any tort, contract, or statutory liability resulting from or alleged to
have resulted from the Business prior to the Effective Date or operations of
Seller prior to Effective Date, except for the obligations arising and maturing
after the Effective Date to perform under those contracts expressly assumed by
UCI of SC hereunder. All property taxes assessed against the Assets sold hereby
shall be prorated as of the Effective Date, and Seller shall promptly pay when
due, or reimburse UCI of SC for, all such taxes which remain the Seller's
responsibility.
48
11. RISK OF LOSS. In the event the Assets or any substantial part thereof shall
be damaged or destroyed prior to the Effective Date due to any casualty or
event, or there shall occur any actions for condemnation or eminent domain
having a material adverse affect on the Assets or any substantial part thereof,
Seller shall promptly notify UCI of SC that such damage, destruction, or action
has occurred and the estimated extent thereof. In case the amount of such
damage, destruction, condemnation or eminent domain is in excess of 10% of the
Purchase Price, including but not limited to the value of the Shares more fully
described in Section 3.1, of all of the Assets immediately before such damage or
destruction, then UCI of SC must within five (5) days of receipt of such notice
either:
11.1 Termination. Terminate this Agreement by giving Seller written notice
of such termination and thereupon all parties shall be released of all further
liability to the others; or
11.2 Adjustment. Alternatively, and subject to the fulfillment of the
conditions set forth herein, require the consummation of the transactions
provided for in this Agreement and, in such case (or in case of any damage by
fire or other casualty, or condemnation or eminent domain action not entitling
UCI of SC to terminate this Agreement), all proceeds of insurance covering the
Assets and the Premises and all of the claims arising as a result of such damage
or destruction to such Assets or all proceeds of such condemnation or eminent
domain action for such Assets shall become the property of UCI of SC. In the
event UCI of SC elects to require the consummation of the transactions
contemplated herein, Seller shall not compromise or settle any such claim or
action at any time without the written consent of UCI of SC which shall not be
unreasonably withheld. Seller shall cooperate with the collection of such
amounts. Further, in such event, the representations and warranties of Seller
and Harvey, as set forth in Section 5 shall be modified equitably to account for
such claim or action. In this regard, Seller represents and warrants that the
face amount of the subject fire and casualty insurance exceeds 10% of the
Purchase Price, including the value of stock more fully described in Section
3.11.
12. MISCELLANEOUS.
12.1 Entire Agreement. This Agreement, including the Exhibits hereto,
embodies the entire Agreement and understanding between the parties hereto as to
the matters herein addressed and supersedes all prior agreements and
understandings relating to the subject matter hereof.
12.2 No Waiver. No failure to exercise, and no delay in exercising any
right, power or remedy hereunder or under any document delivered pursuant hereto
shall impair any right, power or remedy which the parties hereto may have, nor
shall any such delay be construed to be a waiver of any such rights, powers or
remedies, or any acquiescence in any breach or default under this Agreement, nor
shall any waiver of any breach or default of any party hereunder be deemed a
wavier of any default or breach subsequently occurring.
12.3 Survival. All representations, warranties, covenants, and agreements
herein contained shall survive the Closing hereunder.
12.4 Amendment. No provision of this Agreement or any document or
instrument relating to the Agreement, may be amended, modified, supplemented,
changed, waived, discharged, or terminated, unless the parties hereto consent
thereto in writing.
12.5 Notices. All notices, requests, approvals, consents, demands and other
communication provides for or permitted hereunder shall be in writing, signed by
an authorized representative of the sender and addressed to the respective party
at the address set forth below:
UCI of SC: UCI Medical Affiliates of South Carolina, Inc.
6168 St. Andrews Road
Columbia, SC 29212-3132
Attn.: M.F. McFarland, III, MD
49
UCI: UCI Medical Affiliates, Inc.
6168 St. Andrews Road
Columbia, SC 29212-3132
Attn.: M.F. McFarland, III, MD
Doctor's Care: Doctor's Care, P.A.
6168 St. Andrews, Road
Columbia, SC 29212-3132
Attn.: M.F. McFarland, III, MD
Seller: Convenience Medical Services, P.A.
3426 Wilderness Lane
Murrells Inlet, SC 29576
Attn: Stephen Harvey, MD
Harvey: Stephen Harvey, MD
3426 Wilderness Lane
Murrells Inlet, SC 29576
A party hereto may change its respective address by notice in writing given to
the other parties to this Agreement. Any notice, request, approval, consent,
demand or other communication shall be effective upon the first to occur of the
following; (i) when delivered to the party to whom such notice, request,
approval, consent, demand or the communication is being given, or (ii) five (5)
business days after being duly deposited in the US mail, certified, return
receipt requested.
12.6 Severability of Provisions. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.
12.7 Successors and Assigns. This Agreement shall be binding upon the
parties, and their respective successors, heirs, and assigns, and shall inure to
the benefit of the parties and their respective successors, heirs, and permitted
assigns.
12.8 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one Agreement, and
any party hereto may execute this Agreement by signing any such counterpart. The
authorized attachment of counterpart signature pages shall constitute execution
by the parties.
12.9 Choice of Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of South Carolina.
12.10 Jurisdiction. The parties hereto consent to jurisdiction, subject to
proper service of process, in the State of South Carolina regarding any disputes
arising hereunder.
12.11 Usage. The section and paragraph headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Terms such as "hereof" , "hereunder",
"hereto", "herein", and words of similar import shall refer to this Agreement in
its entirety and all references to "Articles", "Paragraphs", "Sections", and
similar cross references shall refer to specified portions of this Agreement,
unless the context clearly requires otherwise.
12.12 Further Instruments and Acts. From time to time at a party's request,
whether at or after Closing and without further consideration, the other
party(ies) shall execute and deliver such further instruments of conveyance,
transfer and assignment and upon reimbursement for actual reasonable
out-of-pocket expenses take such other action as the requesting party reasonably
may require to more effectively convey and transfer to the requesting party the
properties to be conveyed, transferred and assigned
50
hereunder, and, if necessary, will assist the requesting party in the collection
or reduction to possession of such property. In addition, each party agrees to
provide reasonable access to records respecting the Business as are requested by
the other party(ies) for proper purpose with good cause shown (subject to
appropriate confidentiality agreements to be negotiated as such time) and agree
to reasonably cooperate in resolving any matters resulting from the transactions
contemplated hereby.
12.13 Assignment. This Agreement is not assignable by any party without the
prior written consent of the other parties hereto.
[SIGNATURE PAGE ATTACHED]
51
IN WITNESS WHEREOF, the parties have executed this Asset Purchase Agreement
under seal, with the corporate parties acting by and through their duly
authorized offers, effective as of the date first above written.
UCI:
UCI MEDICAL AFFILIATES, INC.
By: /s/ Stephen S. Seeling
Its: Chief Operating Officer and Counsel
UCI of SC:
UCI MEDICAL AFFILIATES OF SOUTH
CAROLINA, INC.
By: /s/ Stephen S. Seeling
Its: Chief Operating Officer and Counsel
DOCTOR'S CARE:
DOCTOR'S CARE, P.A.
By: /s/ Stephen S. Seeling
Its: Secretary
SELLER:
CONVENIENCE MEDICAL SERVICES, P.A.
By: /s/ Stephen A. Harvey, M.D.
Its: President
HARVEY:
/s/ Stephen A. Harvey, M.D.
Stephen A. Harvey, M.D.
52
EXHIBITS TO ASSET PURCHASE AGREEMENT
(EXHIBIT 2.2)
EXHIBIT NO. DESCRIPTION PAGE NUMBER
Exhibit A List of Assets 54
Exhibit B Equipment Leases 55
Exhibit C Bill of Sale - Medical Records 56
Exhibit D Promissory Note 57
Exhibit E Investment Letter 59
Exhibit F Lease 62
Exhibit G Non-Competition Covenant 75
Exhibit H Bill of Sale 80
Exhibit I Assignment and Assumption Agreement 82
Exhibit J Security Agreement 84
53
EXHIBIT A
LIST OF ASSETS
1 Wheelchair
2 Refrigerators
1 Autoclave
2 Glucometers
2 Hair Dryers
6 Exam Tables
2 Electric Exam Tables 7 Welch Allen -- Wall Mount Transformers
1 Welch Allen -- Portable Transformer
7 Goose Neck Lamps
2 Surgical Lights
9 Rolling Exam Stools
1 Infant Scale
1 Regular Adult Scale
1 Ultra Sound Machine
1 Rolling Table
3 Foot Stools
1 EKG Machine
1 Alcohol Breathalizer Machine
1 Printer (with breathalizer)
3 Mayo Stands
1 O2 cart with Wheels
1 IV Stand
1 Adult Ambu Bag
1 Pediatric Ambu Bag
1 Papoose Board
1 Electrocator
2 Ear Syringes
1 Head Mount Magnifier
1 Hand Held Black Light
8 Metal Trash Cans with Foot Pedal
2 Portable Blood Pressure Cuffs
3 Wall Mount Blood Pressure Cuffs
1 Large Blood Pressure Cuff
1 Pediatric Blood Pressure Cuff
1 X-Ra Table -- Complete Unit
1 Portable Step Stool
4 14 x 17 Cassettes -- 2 high speed; 2 rare earth
8 View Boxes
4 10 x 12 Cassettes
1 Processor -- automatic
1 Film Bend
1 Full Lead Apron
1 Lap Apron
1 Set of Lead Gloves
2 10 Pound Weights
6 Lead Blockers
1 Hot Light
54
EXHIBIT B
EQUIPMENT LEASES
Below is a summary of the Equipment Lease Agreements (the original leases are on
file with UCI Medical Affiliates, Inc.):
COULTER ELECTRONICS, INC.
Effective Date: November 22, 1994
Term of Lease: 63 Months
Lease Payment: $930.04 (plus tax)
Supplier: Coulter Leasing Corp.
Equipment: MD16 with Histogiems
AT&T
Effective Date: July 8, 1994
Term of Lease: 60 Months
Lease Payment: $118.37
Supplier: AT&T Credit Corporation
Equipment: Partner Plus
COMPUSYSTEMS, INC.
Effective Date: January 25, 1993
Term of Lease: 60 Months
Lease Payment: $449.99
Supplier: CompuSystems, Inc.
Equipment: 250 Meg Int Tape Drive
5 DC 6250 Tape Cartridges
Hardware and Software Maintenance
GE CAPITAL LEASE
Effective Date: October 7, 1994
Term of Lease: 36 Months
Lease Payment: $119.24
Supplier: General Electric Capital Corporation
Equipment: Minolta EP 1080/Automatic Document Feeder
AT&T CAPITAL LEASING SERVICES, INC.
Effective Date: March 25, 1995
Term of Lease: 60 Months
Lease Payment: $2,882.41
Supplier: Abbott Diagnostics
Equipment: Abbott Spectrum Series II
55
EXHIBIT C
BILL OF SALE - MEDICAL RECORDS
KNOW ALL MEN BY THESE PRESENTS, that Stephen A. Harvey, M.D. and
Convenience Medical Services, P.A., a South Carolina professional association
(collectively the "Grantor"), for and in consideration of the sum of Ten and
no/100 Dollars ($10.00), and other good and valuable consideration to it in
hand, paid at or before the ensealing and delivery of these presents, by
Doctor's Care, P.A., a South Carolina professional association ("Grantee"), the
receipt, sufficiency and adequacy of which is hereby acknowledged and subject to
the terms hereof, has bargained and sold and by these presents does sell,
assign, transfer, remise, release and quitclaim unto the said Grantee, its
successors and assigns, all of the Grantor's right, title and interest in and to
the following goods and chattels:
All Patient Records owned by Grantor with respect to Grantor's
medical practice at 108 Highway 17 North, North Myrtle Beach,
South Carolina 29582
TO HAVE AND TO HOLD the same unto said Grantee, its successors and assigns
forever.
IN WITNESS WHEREOF, this Bill of Sale has been executed by Grantor to be
effective as of the 1st day of March, 1996.
WITNESSES: CONVENIENCE MEDICAL SERVICES, P.A.
/s/ N. David DuRant By: /s/ Stephen A. Harvey, M.D.
Its: President (SEAL)
/s/ Jeanne Sparkes
/s/ Stephen A. Harvey, M.D.
Stephen A. Harvey, M.D. (SEAL)
/s/ N. David DuRant
/s/ Jeanne Sparkes
56
EXHIBIT D
PROMISSORY NOTE
$240,000.00 Columbia, S.C.
Subject to Set Off March 1, 1996
FOR VALUE RECEIVED, UCI Medical Affiliates of South Carolina, Inc., a
South Carolina corporation (the "Borrower"), hereby promises to pay, in lawful
money of the United States of America, to the order of Convenience Medical
Services, P.A., a South Carolina professional association (the "Lender"), the
principal sum of Two Hundred Forty Thousand and No/100 ($240,000.00) Dollars,
subject to set off as provided hereunder.
Interest shall accrue from March 1, 1996 on the principal balance
outstanding hereunder from time to time until paid in full at the fixed simple
rate per annum equal to ten (10.0%) percent, amortized over two (2) years and
calculated based upon a 360-day year and the actual number of days elapsed.
Equal payments of principal and interest in the amount of Eleven Thousand
Seventy-Four and 78/100 ($11,074.78) Dollars shall be due and payable commencing
on April 1, 1996, and continuing thereafter on the first (1st) day of each month
for the succeeding twenty-three (23) consecutive months. Payments hereunder
shall be made to the Lender at 3426 Wilderness Lane, Murrells Inlet, South
Carolina 29576, or at such other place as the Lender may designate from time to
time in writing.
Anything contained in this Note to the contrary notwithstanding, Buyer
shall have the right of set off and recoupment against amounts coming due
hereunder in the event that Lender or Stephen A. Harvey, M.D. ("Harvey")
breaches that certain Asset Purchase Agreement dated as of March 1, 1996, by and
among Borrower, Lender, UCI Medical Affiliates, Inc., and Harvey or any document
ancillary thereto (collectively the "Agreement"). In the event Borrower elects
to exercise the right of set off and recoupment set forth herein, upon notice to
the Lender the principal amount hereof shall be deemed reduced by the amount of
any set off or recoupment to which the Borrower is entitled, and all interest
and payments accruing thereafter shall be calculated based upon such reduced
principal amount. The Lender's right to lawfully contest such set off or
recoupment in any action to collect this Note shall not be impaired by
Borrower's exercise of such set off or recoupment rights. The inclusion of this
special set off or recoupment provision shall not affect the availability, if
any, of rights of set off or recoupment arising at law or in equity.
The occurrence of the following shall constitute an "Event of Default"
under the Note: Borrower, after the expiration of the applicable grace period
hereinafter set forth, fails to pay when due any principal or interest payment
hereunder (except for any amount then subject to an unresolved but duly asserted
set off or recoupment dispute). Upon the occurrence of an Event of Default as
hereinabove defined, then at any time thereafter the Lender may declare the
entire remaining principal balance due hereunder, together with all accrued
interest thereon, immediately due and payable. The applicable grace period
hereunder shall be thirty (30) days and shall begin to run upon receipt by
Borrower of written notice from Lender of a potential default hereunder.
The invalidity of any provision of this Note shall not affect the
validity of any other provision hereof. The acceptance after maturity of any
payment with respect to this Note shall not constitute a waiver of the right of
Lender to demand the payment in full of any unpaid balance. No delay or failure
on the part of the Lender in the exercise of any right or remedy shall operate
as a waiver thereof, and no single exercise of any right or remedy shall
preclude Lender from the exercise of any other or further rights or remedies.
This Note is collateralized by that certain Security Agreement executed
by Borrower and Doctor's Care, P.A. and dated the date hereof.
In the event this Note is placed in the hands of an attorney for
collection (but not for resolution of any disputes on a set off or recoupment of
the amount due hereunder), all expenses of the Lender, including
57
reasonable attorneys' fees, shall be added to the principal amount of this Note
and collected as a part hereof. This Note shall be governed by and construed in
accordance with the laws of the State of South Carolina. Jurisdiction and venue
for the enforcement of this Note shall be exclusively in the courts for the
State of South Carolina.
Borrower expressly waives demand, presentment, protest and notice of
non-payment or dishonor and all other notices or demands whatsoever (except for
notices expressly set forth herein), and such parties agree to remain bound
hereby until all amounts due hereunder are paid in full, notwithstanding any
extension of time for payment which may be granted, even though the period of
extension be indefinite.
The Borrower reserves the right to prepay this Note in whole or in part
at any time without fee or penalty; provided, however, that any partial payment
shall be applied first to accrued interest and then to the reduction of the
principal.
EXECUTED as of this 1st day of March, 1996.
UCI MEDICAL AFFILIATES OF SOUTH
CAROLINA, INC. (SEAL)
By: /s/ Stephen S. Seeling
Its: Chief Operating Officer and Counsel
Notice Address for Borrower:
6168 St. Andrews Road
Columbia, South Carolina 29212
Attn: Stephen Seeling, Esquire
58
EXHIBIT E
INVESTMENT LETTER
TO: UCI Medical Affiliates, Inc.
6168 St. Andrews Road
Columbia, SC 29160
Attn: President
RE: Issuance of Common Stock in UCI Medical Affiliates, Inc.
Dear Sir:
On this date, you are issuing to Convenience Medical Services, P.A., a
South Carolina professional corporation ("Transferee"), Seventy-Two Thousand
Seven Hundred Twenty-Eight (72,728) shares (the "Shares") of the common stock,
$0.05 par value, of UCI Medical Affiliates, Inc. (the "Company"). In
consideration of your agreement to issue the Shares to Transferee, Transferee
and Stephen A. Harvey, M.D., the sole shareholder of Transferee ("Harvey"),
hereby represent and warrant to you and hereby covenant and agree with you, as
follows:
1. Transferee is acquiring the Shares solely for Transferee's own
account and not as nominee for, representative of, or otherwise on behalf of any
other person or entity. Transferee is acquiring the Shares with the intention of
holding the Shares for investment purposes only, and Transferee has no present
intention of participating, directly or indirectly, in a subsequent sale,
transfer or other distribution of the Shares, or of dividing Transferee's
interest in the Shares with any other person or entity. Transferee has not
offered any of the Shares for sale or other disposition, and Transferee shall
not make any sale, transfer or other disposition of the Shares in violation of
state or federal law.
2. Transferee is an "accredited investor" as that term is defined in
Rule 501 of Regulation D promulgated by the Securities and Exchange Commission
("SEC") under the Securities Act of 1933 (the "Act"). NOTE: An "accredited
investor" includes any individual who: (a) has a net worth (with spouse) in
excess of $1,000,000; (b) has had an individual income in excess of $200,000 (or
joint income with spouse in excess of $300,000) in each of the two most recent
years and who reasonably expects an income of the same level for the current
year; or (c) is an executive office or director of the Company. (For purposes of
this paragraph, calculate net worth as the sum of the fair market value of all
assets, including all real estate, automobiles, savings, stocks, bonds,
individual retirement accounts, pension and profit sharing plans, limited
partnership interest and other investments, less all current and long term
liabilities.).
3. Harvey is an "accredited investor" as that term is defined in Rule
501 of Regulation D promulgated by the Securities and Exchange Commission
("SEC") under the Securities Act of 1933 (the "Act"). NOTE: An "accredited
investor" includes any individual who: (a) has a net worth (with spouse) in
excess of $1,000,000; (b) has had an individual income in excess of $200,000 (or
joint income with spouse in excess of $300,000) in each of the two most recent
years and who reasonably expects an income of the same level for the current
year; or (c) is an executive office or director of the Company. (For purposes of
this paragraph, calculate net worth as the sum of the fair market value of all
assets, including all real estate, automobiles, savings, stocks, bonds,
individual retirement accounts, pension and profit sharing plans, limited
partnership interest and other investments, less all current and long term
liabilities).
4. The Transferee and Harvey, each considers itself to be a
sophisticated investor in companies similarly situated to the Company, and
Transferee and Harvey have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of the
prospective investment in the Shares. Transferee and Harvey understands that
there is no public market for the Shares, no public market for the Shares is
likely to develop and it may not be possible for Transferee to readily liquidate
its investment. Transferee and Harvey are aware that Transferee's investment in
the Company is speculative and involves a high degree of risk of loss arising
from, among other things, substantial market, operational, competitive and other
risks, and having made their own evaluation of the risks associated with this
investment.
59
5. The Shares were not offered to Transferee by means of any form of
general or public solicitation or general advertising, or publicly disseminated
advertisements or sales literature, including (a) any advertisement, article,
notice, or other communication published in any newspaper, magazine, or similar
media, or broadcast over television or radio or (b) any seminar or meeting to
which Transferee was invited by any of the foregoing means of communications.
6. Transferee's investment in the Shares is reasonable and consistent
with the nature and size of its present investments and net worth, Transferee
has no need for liquidity in the investment represented by the Shares, and
Transferee is financially able to bear the economic risk of this investment,
including the ability to afford holding the Shares for an indefinite period of
time and to afford a complete loss of this investment.
7. Transferee is aware that the Company may offer and sell additional
shares of common stock in the future, thereby diluting its percentage equity
ownership of the Company.
8. Transferee understands that as a publicly traded company, the
Company files with the SEC various reports, including quarterly and annual
financial statements, annual reports to shareholders, and proxy statements, and
that all of such reports, statements and information are available to the
public, including Transferee, from the SEC and directly from the Company.
Transferee has been given the opportunity to obtain copies of such public
information and to ask questions of, and receive answers from, you with respect
to the Company and the Shares, concerning the terms and conditions of the
issuance of the Shares by you to Transferee, and has been given the opportunity
to obtain such additional information necessary to verify the accuracy of any
information provided to Transferee by you in order for Transferee to evaluate
the merits and risks of an investment in the Shares to the extent that you
possess such information or could acquire it without unreasonable effort or
expense. Transferee has been furnished with all information concerning the
Shares and the Company that Transferee desires.
9. In regard to any economic or legal considerations related to the
Shares, Transferee has relied on the advice of, or consulted with, only
Transferee's own advisors, and Transferee has not relied upon you, the Company,
the Company's legal counsel or the accountants for the Company regarding the
Shares or the transaction contemplated by this Investment Letter.
10. Transferee understands and acknowledges that the issuance of the
Shares to Transferee was not registered under the Act or under the securities
laws of any state in reliance upon an exemption or exemptions contained in the
Act (and the regulations promulgated thereunder) and applicable state securities
laws. Consequently, Transferee understands that the Shares cannot be
subsequently transferred unless they are registered under the Act and applicable
state securities laws, or unless an exemption from such registration
requirements is available. Transferee understands and acknowledges that any
certificate evidencing the Shares will bear a legend restricting the transfer of
such Shares consistent with the foregoing, and Transferee understands that a
notation may be made in the stock records of the Company restricting the
transfer of any of the Shares in a manner consistent with the foregoing.
11. Transferee understands and acknowledges that neither the Company
nor you are under any obligation to register the Shares for public sale or to
comply with the conditions of Rule 144 promulgated by the SEC under the Act or
to take any other action necessary in order to make available any exemption for
the subsequent transfer of the Shares without registration.
12. Transferee is a South Carolina professional corporation, and its
principal place of business is located in the State of South Carolina at the
address shown under its signature evidencing its execution of this Investment
Letter, and it has no present intention of removing itself from its existing
state of residence.
13. Transferee confirms that the representations it has previously made
to the Company and those contained in this Investment Letter are correct and
complete as of the date hereof, and that if there should occur any material
change in such representations prior to the receipt of the Shares by Transferee,
it agrees that it will immediately furnish such revised or corrected
representations or information to the Company.
This Investment Letter shall be binding upon the Transferee and the
Transferee's heirs, executors, administrators, successors, representatives and
assigns and shall enure to the benefit of you, your heirs,
60
executors, administrators, successors and assigns. This Investment Letter shall
be governed and construed in accordance with the laws of the State of South
Carolina.
TRANSFEREE:
Number of Shares of CONVENIENCE MEDICAL SERVICES, P.A.
UCI Medical Affiliates, Inc.
to be issued:
By: /s/ Stephen A. Harvey, M.D.
Stephen A. Harvey, M.D.
72,728 Shares Its: President
Date: March 1, 1996 108 Highway 17 North
(Street Address)
North Myrtle Beach, South Carolina 29582
(City, State, Zip)
HARVEY:
/s/ Stephen A. Harvey, M.D.
Stephen A. Harvey, M.D.
3426 Wilderness Lane
(Street Address)
Murrells Inlet, South Carolina 29576
(City, State, Zip)
61
EXHIBIT F
LEASE
STATE OF SOUTH CAROLINA )
) LEASE
COUNTY OF HORRY )
THIS LEASE, is made and entered into to be effective as of the 1st day
of March, 1996, by and between Stephen A. Harvey, M.D., hereinafter called
"Landlord", and UCI Medical Affiliates of South Carolina, Inc., hereinafter
called "Tenant."
WITNESSETH:
In consideration of the covenants and agreements of the respective parties
hereto, for themselves, their heirs, successors, distributes, executors,
administrators, legal representatives and permitted assigns, do hereby agree as
follows:
A. DESCRIPTION OF PREMISES
The premises which are the subject of the Lease (hereinafter referred
to as "Premises") are situated in Horry County and are more
particularly described as follows:
Lot with improvement situated thereon at 108 Highway 17 North,
North Myrtle Beach, South Carolina 29582, and more fully
described on Schedule 1 attached hereto.
B. TERM AND DELIVERY OF PREMISES
To Have and To Hold the said Premises unto Tenant for a term of twelve
(12) months, beginning on the 1st day of March, 1996 (the "Commencement
Date") and ending on the 30th day of April, 1997 (the "Expiration
Date"). Landlord and Tenant agree that if the Premises or any portion
thereof is conveyed, assigned or transferred by Landlord prior to the
Expiration Date, Tenant in its sole discretion may elect to terminate
this Lease and in such event Tenant shall have no further obligations
herein.
C. COVENANTS AND CONDITIONS OF LEASE
This Lease is made on the following covenants and conditions which are
expressly agreed to by Landlord and Tenant:
1. Rental: The rental to be paid by Tenant for the term of this Lease
shall be the sum of Four Thousand Dollars ($4,000.00) per month, payable in
advance on the first day of each and every month. Rent for any portion of a
month shall be appropriately prorated. In the event Tenant shall fail to pay
rent within ten (10) days of the due date, a late charge of two (2%) percent of
the amount due shall be added, and the same shall be treated as additional rent.
2. Future Use: Landlord agrees that for a period commencing on
the effective date hereof and ending on March 1, 2001, the Premises or any
portion thereof shall not be used as a primary care (family practice, internal
medicine, pediatrics, or emergency medicine) or urgent care medical clinic or
facility, without the prior written consent of Tenant which may be withheld for
any or no reason. The parties hereto acknowledge and agree that further evidence
of such restrictions contained in this Section C(2), substantially in the form
attached hereto as Schedule 2, shall be executed by the parties hereto and
recorded in the real estate records of the Premises. The terms of this Section
shall survive the expiration or termination of this Lease.
62
3. Tenant Alterations: Tenant shall not make, or suffer to be made, any
alterations of the Premises, or any part thereof, without the written consent of
Landlord, which consent shall not be unreasonably withheld.
4. Maintenance and Repair of Premises:
a. Landlord's Repairs. Landlord, at its own expense, shall
promptly repair defects, if any, in the roof, walls, heating and cooling system,
electrical system, and plumbing system of the Premises, provided Landlord shall
not be responsible for other repairs whatsoever. Notwithstanding the foregoing,
Landlord represents and warrants that as of the date hereof, the Premises is
habital, in good repair, and free from any material defects or damage.
b. Tenant's Repairs. Subject to the foregoing, Tenant, at its
own expense, shall maintain the leased Premises' exterior and interior
(including, without limitation, all parking areas, buildings, improvements and
appurtenances of every type thereto) in reasonable repair and condition.
5. Hazardous Substance Remediation: Notwithstanding anything
contained herein to the contrary, Tenant shall not be required to remediate,
purge or remove, or bear the cost of such remediation, purge or removal of, any
hazardous substance which contaminated the Premises prior to the commencement of
the term of this Lease or which existed at the commencement of the term of this
Lease and worsened through no fault of Tenant thereafter. In addition, Tenant
shall not be obligated to take actions to prevent such worsening of
contamination which existed at the commencement of this Lease. Landlord shall
indemnify Tenant and hold Tenant harmless from any and all liability, claim,
injury, damage, penalty, or cost, (including reasonable attorney's fees) arising
out of third party claims or assertions resulting from any hazardous substances
existing on the Premises as of the effective date of this Lease.
6. Americans With Disabilities Act: Notwithstanding any term
or provision to the contrary contained herein, the Landlord, at Landlord's sole
cost and expense, shall ensure that the Premise and improvements thereon shall
be in material compliance with the Americans With Disabilities Act, as the same
is amended from time to time (the "Act"). Tenant shall not be required to make
any alterations or additions to the Premises (both structural and
non-structural) that may be necessary from time to time to keep or bring the
Premises in material compliance with the Act.
7. Taxes and Other Obligations: During the term hereof, Tenant
agrees to pay all taxes, assessments (whether general or specific), including
real estate taxes which are or may be levied against the Premises and
improvements thereon as they become due and payable during the term of this
Lease. Such items shall be prorated for periods outstanding at the commencement
or the termination of this Lease.
8. Utilities: Tenant shall pay for all utilities serving the
building and ground including but not limited to electricity, gas, water, sewer,
telephone and janitorial services during the term of this Lease. Such items
shall be prorated for periods outstanding at the commencement or the termination
of this Lease.
9. Sign and Parking: Tenant may erect such sign as it deems
appropriate to advertise its business, provided such sign is in compliance with
governmental regulations. Tenant shall have the right to use the parking area
which is part of the Premises for patients and staff.
10. Zoning: The Property is currently zoned for the operation
of a medical office building. Landlord is not aware of any pending change or
amendment to the current zoning classification.
11. Entry by Landlord: Landlord, upon prior notice to Tenant
(except in event of an emergency) shall have the right to enter the Premises at
reasonable times for the purpose of inspection, posting notices or supervising.
Sixty (60) days prior to Expiration Date, Landlord may post suitable notice on
the Premises that same are for rent and may show same to prospective Tenant at
reasonable times.
63
12. Assignment and Subletting: Landlord and Tenant shall have
the right to assign or sublease this Lease to any party with the written consent
of the other party which shall not be unreasonably or arbitrarily withheld.
13. Waiver of Covenants: It is agreed that the waiving of any
covenants of this Lease by either party shall be limited to particular instances
and shall not be deemed to waive any other breaches of such covenant or any
provision herein contained.
14. Default: In the event that Tenant shall default in the
payment of rent or any other sums payable by Tenant herein, and such default
shall continue for a period of thirty (30) days after written notice of
delinquency has been given to Tenant by Landlord, or if the Tenant shall default
in the performance of any other covenants or agreements of this Lease and such
default shall continue for thirty (30) days after written notice of default has
been given to Tenant by Landlord, or if the Tenant shall become bankrupt or
insolvent and shall not cure said condition within thirty (30) days after
written notice of default has been given to Tenant by Landlord, then and in
addition to any and all other legal remedies and rights, Landlord may terminate
this Lease. In the event that Tenant shall default in the payment of rent
payable by Tenant herein, and such default shall continue for a period of ten
(10) days after written notice of delinquency has been given to Tenant by
Landlord, Tenant shall pay to Landlord as a penalty the sum of One Hundred and
No/100 ($100.00) Dollars.
15. Insurance: Tenant shall maintain at its own expense hazard
and liability insurance covering the Premises and contents thereof in an amount
as are customarily carried on businesses such as that to be conducted by Tenant.
Landlord shall be listed as a named insured on these insurance policies and
shall be provided with continuing evidence of such insurance.
16. Holding Over: In case Tenant shall hold over after the end
of the term herein provided, such tenancy shall be from month-to-month only, and
not a renewal hereof; subject, however, to every other term, covenant and
condition of this Lease, the rent shall be at the monthly rate of the last year
of the Lease term and either party hereto may terminate said tenancy at the end
of any month upon thirty (30) days prior written notice.
17. Damage or Destruction by Fire or Other Casualty: If the
Premises or any part thereof shall be damaged or destroyed by fire or other
casualty during the term of the Lease, Tenant shall promptly repair all such
damage and restore the Premises, subject to delays due to adjustment or
insurance claims, strikes and other causes beyond Tenant's control. If such
damage or destruction shall render the Premises untenantable in whole or in
part, the rent shall be abated, wholly or proportionately as the case may be
until the damage shall be repaired and the Premises restored. If the damage or
destruction shall be so extensive as to require substantial rebuilding (i.e.,
expenditure of fifty (50%) percent or more of replacement cost) of the building
on the Premises, Landlord or Tenant may elect to terminate this Lease by written
notice to the other given within thirty (30) days after the occurrence of such
damage or destruction.
18. Condemnation: In the event any part of the Premises shall
be taken or condemned at any time during the term hereof throughout the exercise
of the power of eminent domain and Tenant shall determine that the remaining
portion of the Premises are not reasonably suitable for its use and occupation,
Tenant may, by giving written notice to Landlord within ninety (90) days after
the date of such taking, terminate this Lease and Landlord shall refund any
unearned rent paid by Tenant. If Tenant does not terminate this Lease as
provided above, this Lease shall continue in force as to the remaining portion
of the Premises and in such event the monthly rental thereafter payable by
Tenant hereunder shall be adjusted and prorated in the exact ratio which the
value of the Premises remaining after such condemnation bears to the value of
the Premises immediately preceding the condemnation, and Landlord shall, at his
own expense, make any repairs or alterations to said Premises which may be
necessary by such condemnation.
In the event of the taking of all or any portion of the
Premises, Landlord and Tenant shall be free to pursue independent claim against
the condemning or taking authority for the amount of any
64
damage done to them respectively as a result thereof, and neither party shall
make claim against the other as a result of condemnation nor shall either be
entitled to any part of the other's condemnation award.
19. Enforcement: If any action at law or in equity shall be
brought to recover any rent under this Lease, or for, or on account of any
breach of or to enforce or interpret any of the covenants, terms or conditions
of this Lease, or for the recovery of the possession of the Premises, the
prevailing party shall be entitled to recover from the other party the
prevailing party's costs and reasonable attorney's fee, the amount of which
shall be fixed by the court and shall be made a part of any judgment rendered.
20. Quiet Enjoyment: Landlord agrees that Tenant, keeping and
performing the covenants herein contained on the part of Tenant to be kept and
performed, shall at all times during the term of this Lease peaceably and
quietly have, hold and enjoy the Premises.
21. Surrender of Premises: Tenant agrees to turn over all keys and
surrender the Premises at the expiration or sooner termination of this Lease or
any extension thereof, broomclean and deliver the Premises in substantially the
same condition as when delivered to Tenant or as altered, pursuant to the
provisions of this Lease, ordinary wear and tear, condemnation and damage by the
elements excepted.
22. Removal of Fixtures: The Tenant will be entitled to remove any
non-permanent fixtures. That is to be defined as any fixture that is not
specifically attached to the building. Once fixtures become attached to the
building and become a part of the permanent structure, these fixtures will
necessarily become the property of Landlord and cannot and will not be removed
at the expiration of the Lease without the prior written consent of the
Landlord. Should the Landlord give prior written consent before the removal of
any permanently attached fixture, it will be the responsibility of the Tenant to
repair the building in the same or as good condition as it was prior to the
removal of the fixtures.
23. Default of Landlord: If at any time during the term hereof Landlord
shall default in any of its obligations under this Lease, Tenant may give
written notice to Landlord of its intention to terminate the Lease together with
a statement of the nature of such default, and such termination shall become
effective on the thirtieth (30th) day after the date of such notice unless (a)
such default shall be cured within thirty (30) days after such notice or (b) if
the default is of such a nature that it cannot be cured within such period, the
necessary steps to cure such default are duly commenced within such period and
are thereafter diligently pursued.
24. Relationship of the Parties: Nothing herein shall be deemed to
create any partnership, joint venture, or agency relationship between the
parties. Neither party shall make any representation or statement (whether oral
or written) to any person or entity inconsistent with this paragraph.
25. Third Parties: The provisions of this Lease are not intended to be
for the benefit of any third parties, and no third party shall be deemed to have
any privity of contract with either of the parties hereto by virtue of this
Lease.
26. Time of Essence: The parties acknowledge and agree that time is of
the essence in the performance of this Lease.
27. Venue and Jurisdiction: The parties hereto hereby (i) agrees that
any litigation, action or proceeding arising out of or relating to this Lease
may be instituted in a state or federal court in the City and State of North
Myrtle Beach or Columbia, South Carolina, (ii) waives any objection which it
might have now or hereafter to any such litigation, action or proceeding based
upon improper venue or inconvenient forum, and (iii) irrevocably submits to the
jurisdiction of such courts in any such litigation, action or proceeding. For
all purposes of this Lease, the parties hereto irrevocably consents to personal
jurisdiction of such courts, and further agrees that service of process upon
such party may be effected pursuant to the United States mail.
65
28. No Inference Against Author: No provision of this Lease shall be
interpreted against any party because such party or its legal representative
drafted such provision.
29. Entire Lease: This Lease constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
contemporaneous written or oral agreements and representations between the
parties with respect thereto.
30. Recordation: This Lease or a memorandum hereof may be recorded by
either party. The parties agree to execute for recording purposes any such
memorandum.
31. Rights of Successors and Assigns: The covenants and agreements
contained in the within Lease shall apply to, inure to the benefit of, and be
binding upon the parties hereto, their heirs, distributes, executors,
administrators, legal representative, assigns and upon their respective
successors in interest, except as expressly otherwise hereinabove provided.
32. Notices: Any notice allowed or required by this Lease
shall be deemed to have been sufficiently served if the same shall be in writing
and placed in the United States mail via certified mail or registered mail,
return receipt requested, with proper postage prepaid and addressed as follows:
If to Landlord:
Stephen Harvey, M.D.
3426 Wilderness Lane
Murrells Inlet, SC 29576
If to Tenant:
UCI Medical Affiliates of South Carolina, Inc.
6168 St. Andrews Road
Columbia, SC 29212
Attention: Stephen S. Seeling
33. Set Off. Anything contained in this Lease to the contrary
notwithstanding, Tenant shall have the right of set off and recoupment against
amounts coming due hereunder in the event that Convenience Medical Services,
P.A. or Landlord breaches that certain Asset Purchase Agreement dated as of
March 1, 1996, by and among Tenant, Convenience Medical Services, P.A., UCI
Medical Affiliates, Inc., and Landlord or any document ancillary thereto
(collectively the "Agreement"). In the event UCI Medical Affiliates of South
Carolina, Inc. elects to exercise the right of set off and recoupment set forth
herein, upon notice to Landlord the rental hereunder shall be deemed reduced by
the amount of any set off or recoupment to which the Tenant is entitled.
Landlord's right to lawfully contest such set off or recoupment in any action to
collect rental hereunder shall not be impaired by Tenant's exercise of such set
off or recoupment rights. The inclusion of this special set off or recoupment
provision shall not affect the availability, if any, of rights of set off or
recoupment arising at law or in equity.
[SIGNATURE PAGE ATTACHED]
66
IN WITNESS WHEREOF, the parties hereto have caused these presents to be
executed to be effective as of the day and year first above written.
WITNESSES: LANDLORD:
/s/ Jeanne Sparkes /s/ Stephen A. Harvey, M.D.
Stephen A. Harvey, M.D.
/s/ N. David DuRant
TENANT:
UCI MEDICAL AFFILIATES OF
SOUTH CAROLINA, INC.
/s/ Jeanne Sparkes By: /s/ Stephen S. Seeling
Its: Chief Operating Officer and Counsel
/s/ N. David DuRant
67
STATE OF SOUTH CAROLINA )
) PROBATE
COUNTY OF HORRY )
PERSONALLY appeared before me the undersigned witness and made oath that
s/he saw the within-named UCI Medical Affiliates of South Carolina, Inc., by
Stephen S. Seeling, its Chief Operating Officer, sign, seal, and as its act and
deed, deliver the within-written instrument for the uses and purposes therein
mentioned, and that s/he with the other witness whose signature appears above,
witnessed the execution thereof.
/s/ Jeanne Sparkes
WITNESS
SWORN TO before me this 1st day of March, 1996.
/s/ N. David DuRant (L.S.)
Notary Public for South Carolina
My Commission Expires: 04-03-2001
STATE OF SOUTH CAROLINA )
) PROBATE
COUNTY OF HORRY )
PERSONALLY appeared before me the undersigned witness and made oath that
s/he saw the within-named Stephen A. Harvey, M.D. sign, seal, and as his act and
deed, deliver the within-written instrument for the uses and purposes therein
mentioned, and that s/he with the other witness whose signature appears above,
witnessed the execution thereof.
/s/ Jeanne Sparkes
WITNESS
SWORN TO before me this 1st day of March, 1996.
/s/ N. David DuRant (L.S.)
Notary Public for South Carolina
My Commission Expires: 04-03-2001
68
Schedule 1
Legal Description
All that certain piece, parcel or tract of land, situate, lying and being on the
southeastern side of U.S. Highway 17, in the Ocean Drive Section, City of North
Myrtle Beach, County of Horry, State of South Carolina, as shown on plat
prepared for the National Bank of South Carolina by C.B. Berry, R.L.S., dated
December 17, 1987, to be recorded, and according to said plat, having the
following metes and bounds, to wit: Beginning at a nail on the southeastern edge
of the right of way of U.S. Highway 17, approximately 125.0 feet from its
intersection with Second Avenue North, thence running S 42 degrees 00 feet East
for a distance of 175.0 feet to a nail; thence, turning and running S 48 degrees
00 feet West for a distance of 125.0 feet to an iron; thence, turning and
running N 42 degrees 00 feet East for a distance of 125.0 feet to the point of
beginning, be all measurements a little more or less.
TMS #144-06-44-002
69
Schedule 2
Use And Restriction Agreement
STATE OF SOUTH CAROLINA )
) USE AND RESTRICTION AGREEMENT
COUNTY OF HORRY )
WHEREAS, pursuant to that certain Asset Purchase Agreement ("Asset
Agreement") between UCI Medical Affiliates, Inc. ("UCI"), UCI Medical Affiliates
of South Carolina, Inc., ("UCI of SC"), Doctor's Care, P.A. ("Doctor's Care"),
Convenience Medical Services, P.A. ("Seller"), and Stephen A. Harvey, M.D.
("Harvey") dated as of March 1, 1996, Seller shall sell substantially all of
Seller's assets related to its practice located at 108 Highway 17 North, North
Myrtle Beach, South Carolina to UCI of SC;
WHEREAS, pursuant to the Asset Agreement, Harvey, the owner of the
Premises, shall lease to UCI of SC certain real property located at 108 Highway
17 North, North Myrtle Beach, South Carolina, 29582, more fully described on
Exhibit A attached thereto (the "Premises"), pursuant to that certain lease
dated as of March 1, 1996 (the "Lease"); and
WHEREAS, the Lease provides certain restrictions on the use of the Premises
and provide that this Use and Restriction Agreement (the "Agreement") setting
forth such restrictions be recorded in the real estate records for the Premises.
NOW THEREFORE, THE PARTIES HERETO AGREE THAT, Seller has operated a medical
practice on the Premises for a substantial number of years, and if the Premises
or any portion thereof were used as a primary care (family practice, internal
medicine, pediatrics, or emergency medicine) or urgent care medical facility,
the value of the assets purchased by UCI of SC under the Asset Agreement would
be significantly diminished.
THEREFORE, for a period commencing on the date hereof and continuing until
March 1, 2001 the Premises or any portion thereof shall not be used as a primary
care (family practice, internal medicine, pediatrics, or emergency medicine) or
urgent care medical clinic or facility, without the prior written consent of UCI
of SC which may be withheld for any or no reason.
FURTHERMORE, these restrictions on the use of the Premises shall
apply to any owner, lessor, licenser, licensee, permittee or any other party,
person, or entity, occupying or making use of the Premises (collectively the
"User").
Remedies for Restriction on Use
A. Accounting for Lost Profits. If User shall violate any of the provisions
of this Agreement, UCI of SC shall be entitled to recover any non-speculative
lost profits incurred by UCI of SC as a result of, growing out of, or in
connection with, any such violation by User. This remedy shall be in addition
to, and not in limitation of, any injunctive relief or other rights, remedies,
or damages, to which UCI of SC is or may be entitled as a result of this
Agreement.
B. Injunctive Relief. In the event of a breach or threatened
breach by User of any of the provisions of the Agreement, UCI of SC, in addition
to, and not in limitation of, any other rights, remedies, or damages available
to UCI of SC at law or in equity, shall be entitled to a temporary restraining
order, preliminary injunction, and permanent injunction in order to prevent or
restrain any such breach by User or by User's partners, agents, representatives,
servants, employers, employees, companies, consulting clients, and/or any and
all persons directly or indirectly acting for or with User. User agrees that in
the event of any breach by User of the covenants set forth in this Agreement,
UCI of SC shall suffer irreparable harm for which the remedy of monetary damages
may be inadequate.
70
Reasonableness of Restrictions.
A. Acknowledgment. Harvey has carefully read and considered the provisions
of the Agreement, and, having done so, voluntarily agrees that the restrictions
set forth in the Agreement, including, but not limited to, the time period of
restriction and the scope of restricted activities set forth in the Agreement,
are fair and reasonable and are reasonably required for the protection of the
legitimate interests of the UCI of SC, and its parent or subsidiary
corporations, partnerships, officers, directors, partners, employees and
affiliates, including but not limited to UCI and Doctor's Care.
B. Enforcement. In the event that, notwithstanding the foregoing, any of
the provisions of the Agreement, or any parts thereof shall be held to be
invalid or unenforceable, the remaining provisions or parts thereof shall
nevertheless continue to be valid and enforceable as though the invalid or
unenforceable portions or parts had not been included therein. In the event that
any provisions of the Agreement relating to the time period and/or the scope of
restricted activities and/or related aspects shall be declared by a court of
competent jurisdiction to exceed the maximum restrictiveness such court deems
reasonable and enforceable, the time period and/or the scope of restricted
activities and/or related aspects deemed reasonable and enforceable by the court
shall become and thereafter be the maximum restriction in such regard, and the
restriction shall remain enforceable to the fullest extent deemed reasonable by
such court.
C. Miscellaneous.
1. Waiver. Any waiver by either party of any breach or any term or
condition hereof shall be effective only if in writing and such writing shall
not be deemed to be a waiver of any subsequent or other breach, term or
condition of this Agreement.
2. Assignments. Neither this Agreement nor any rights hereunder
may be assigned or otherwise transferred by User.
3. Cumulative Remedies. All rights and remedies of a party
hereunder shall be cumulative and in addition to such rights and remedies as may
be available to a party at law or equity.
4. Governing Law. The construction and interpretation of this
Agreement shall at all times and in all respects be governed by the laws of the
State of South Carolina.
5. Severability. The invalidity or unenforceability or any
provision of this Agreement shall not render invalid or unenforceable any other
provision hereof.
[SIGNATURE PAGE ATTACHED]
71
IN WITNESS WHEREOF, the parties hereto have caused this Use And Restriction
Agreement to be executed as of this 1st day of March, 1996.
WITNESSES: HARVEY:
/s/ N. David DuRant /s/ Stephen A. Harvey, M.D.
/s/ Jeanne Sparkes
UCI OF SC:
UCI MEDICAL AFFILIATES OF
SOUTH CAROLINA, INC.
/s/ N. David DuRant By: /s/ Stephen S. Seeling
Its: Chief Operating Officer and Counsel
/s/ Jeanne Sparkes
72
STATE OF SOUTH CAROLINA )
) PROBATE
COUNTY OF HORRY )
PERSONALLY appeared before me the undersigned witness and made oath that
s/he saw the within-named UCI Medical Affiliates of South Carolina, Inc., by
Stephen S. Seeling, its Chief Operating Officer, sign, seal, and as its act and
deed, deliver the within-written instrument for the uses and purposes therein
mentioned, and that s/he with the other witness whose signature appears above,
witnessed the execution thereof.
/s/ Jeanne Sparkes
WITNESS
SWORN TO before me this 1st day of March, 1996.
/s/ N. David DuRant (L.S.)
Notary Public for South Carolina
My Commission Expires: 04-03-2001
STATE OF SOUTH CAROLINA )
) PROBATE
COUNTY OF HORRY )
PERSONALLY appeared before me the undersigned witness and made oath that
s/he saw the within-named Stephen A. Harvey, M.D. sign, seal, and as his act and
deed, deliver the within-written instrument for the uses and purposes therein
mentioned, and that s/he with the other witness whose signature appears above,
witnessed the execution thereof.
/s/ Jeanne Sparkes
WITNESS
SWORN TO before me this 1st day of March, 1996.
/s/ N. David DuRant (L.S.)
Notary Public for South Carolina
My Commission Expires: 04-03-2001
73
Exhibit A
Legal Description
All that certain piece, parcel or tract of land, situate, lying and being on the
southeastern side of U.S. Highway 17, in the Ocean Drive Section, City of North
Myrtle Beach, County of Horry, State of South Carolina, as shown on plat
prepared for the National Bank of South Carolina by C.B. Berry, R.L.S., dated
December 17, 1987, to be recorded, and according to said plat, having the
following metes and bounds, to wit: Beginning at a nail on the southeastern edge
of the right of way of U.S. Highway 17, approximately 125.0 feet from its
intersection with Second Avenue North, thence running S 42 degrees 00 feet East
for a distance of 175.0 feet to a nail; thence, turning and running S 48 degrees
00 feet West for a distance of 125.0 feet to an iron; thence, turning and
running N 42 degrees 00 feet East for a distance of 125.0 feet to the point of
beginning, be all measurements a little more or less.
TMS #144-06-44-002
74
EXHIBIT G
NON-COMPETITION COVENANT
THIS NON-COMPETITION COVENANT ("Agreement"), is made and entered into as of
this 1st day of March, 1996, by and between UCI Medical Affiliates of South
Carolina, Inc., a South Carolina corporation ("Buyer"), and Stephen A. Harvey,
M.D. ("Harvey").
Preliminary Statement
Harvey is currently the President and sole shareholder of Convenience
Medical Services, P.A., a South Carolina professional corporation ("Seller").
Buyer owns and/or leases various medical-related facilities and equipment in
South Carolina and has contracted with Doctor's Care, P.A., a South Carolina
professional corporation ("Doctor's Care"), to provide health care services at
such facilities.
Seller, Buyer, Harvey, UCI Medical Affiliates, Inc., and Doctor's Care have
entered into that certain Asset Purchase Agreement, dated as of March 1, 1996
(the "Purchase Agreement") respecting the sale by Seller to Buyer of
substantially all of the assets of Seller (the "Assets"), which assets are
utilized in Seller's business of a medical practice located at 108 Highway 17
North, North Myrtle Beach, Horry County, South Carolina (the "Business"). Also,
pursuant to the Purchase Agreement, Seller shall lease certain real estate and
improvements at which the Business is operated (the "Real Estate").
Seller has conducted the Business for a substantial number of years, and
Harvey has been an officer, director, sole shareholder, and employee of the
Business since Seller's incorporation in 1994. Thereby, Harvey has made use of,
acquired, and added to confidential and proprietary information and trade
secrets of Seller, all of which are portions of the Assets of Seller (which
Assets are being sold to Buyer pursuant to the Purchase Agreement).
Harvey also has developed unique relationships with patients, suppliers,
and employees of Seller and unique information and knowledge about the
competitive market, locations, potential patients, processes and prospects of
Seller's Business.
Buyer intends to operate the Assets acquired by it for Buyer's business
similar to Seller's Business. The value of Buyer's acquisition would be
diminished in the event that Harvey were to compete with Buyer and/or Doctor's
Care, to assist another person or entity to compete with Buyer and/or Doctor's
care, or to wrongfully divulge any confidential information.
Buyer has required, as a condition precedent to its purchase of such Assets
and lease of the Real Estate pursuant to the Purchase Agreement, that Harvey
covenant not to divulge any confidential information and not to compete with
Buyer and/or Doctor's Care as set forth herein.
Harvey has agreed to provide such covenants as set forth herein as a
material inducement to Buyer to enter into and close the Purchase Agreement and
in consideration of the payments to be made thereunder. Harvey's covenants
contained herein are ancillary to the Purchase Agreement. Harvey acknowledges
that he will benefit from the Purchase Agreement.
Pursuant to the Purchase Agreement, Buyer and Harvey desire to set forth
the terms and conditions of their agreements and understandings respecting such
covenants.
Statement of Agreement
NOW, THEREFORE, in consideration of the foregoing premises, the promises
set forth herein, the Purchase Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Harvey and Buyer, intending to be legally bound, hereby agree and covenant as
follows:
1. Non-Disclosure of Information. Harvey shall not, at any time after the
date hereof, directly or indirectly, divulge or disclose for any purpose
whatsoever any confidential information that has been
75
developed or obtained by, or disclosed to, Harvey at any time before or after
the date hereof (exclusive of such information as is in the public domain or as
is required to be disclosed pursuant to an applicable law, rule, regulation, or
final non-appealable order of a court of competent jurisdiction). Harvey
acknowledges that such confidential information is of a special and unique
nature and value relating to matters of Seller's Business, including, without
limitation, Seller's lists of patients and potential patients, leases or
contacts (which were specifically targeted by Seller prior to Closing), pricing
information and lists, sales and marketing materials and methods, proprietary
information, trade secrets, trademarks, systems, procedures, manuals,
confidential reports, records, operational expertise, the nature and type of
services rendered by Seller, the equipment and methods used and preferred by
Seller's patients and customers, and the fees paid by them (all of which are
deemed for all purposes to be confidential, proprietary, and trade secrets of
Seller transferred to Buyer pursuant to the Purchase Agreement).
2. Covenants against Competition. For a period of three (3)
years after the effective date hereof:
a. Patients, Etc. Harvey shall not, directly or through
an Affiliate (as defined below), (i) provide medical care or services to (or
assist another person or entity to provide medical care or services to) any
Seller Patient (as hereinafter defined), or (ii) solicit or divert (or assist
another person or entity to solicit or divert) any Seller Patient from
purchasing or using any of the Buyer's and/or Doctor's Care's services, or (iii)
provide anywhere in the Territory (as defined below) medical care or services in
any primary, urgent or occupational medical care facility or practice providing
the same or similar services provided or offered by Buyer and/or Doctor's Care.
For purposes of this Section 2(a), the term "Seller Patient" shall mean any
patient of Seller and shall include (without limitation) every such person to
which Seller has provided medical services prior to the date hereof. For
purposes hereof, the term "Territory" shall mean within (i) Myrtle Beach, South
Carolina, (ii) North Myrtle Beach, South Carolina, and (iii) all areas of Horry
County, South Carolina located east or north of U.S. Highway 501.
b. Ownership. In addition to (but not in limitation of)
the restrictions of Section 2(a), Harvey shall not, directly or through an
Affiliate (as defined below), own an equity interest (other than as the holder
for investment purposes only of up to 2% of the outstanding capital stock of any
corporation which is publicly traded on a national stock exchange or the NASDAQ
National Market System, so long as Harvey is not a controlling person of, or a
member of a group that controls, such corporation, and Harvey is not otherwise
affiliated in any capacity with such corporation) in any entity or enterprise
conducting operations in the Territory which is competitive with the business
activities engaged in by Seller prior to Closing or by the Buyer and/or Doctor's
Care after the Closing.
c. Employees. In addition to (but not in limitation of)
the restrictions of Sections 2(a) and (b), Harvey shall not, directly or through
an Affiliate (as defined below) solicit or in any manner attempt to solicit or
induce any person employed by, or an agent of, Buyer or Doctor's Care to
terminate such person's association or contract of employment or agency, as the
case may be, with Buyer and/or Doctor's Care.
d. Definition of Affiliate. For purposes of this
Agreement, an "Affiliate" of Harvey is a Person (as defined below) that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with Harvey. For purposes of this
Agreement, a "Person" includes, in addition to such person, all of the following
persons: (i) any relative or spouse of such person, or any relative of such
spouse, any one of whom has the same home as such person; (ii) any trust or
estate in which such person or any of the persons specified in Section 2(d)(i)
of this Agreement collectively own ten percent (10%) or more of the total
beneficial interest, or of which any of such persons serve as trustee, executor
or in any other capacity; and (iii) any corporation, partnership, limited
liability company or other organization in which such person or any of the
persons specified in Section 2(d)(i) of this Agreement are the beneficial owners
collectively of ten percent (10%) of any class of equity securities, of the
equity interest, or of the partnership interest.
e. Exception. Notwithstanding the foregoing, Harvey shall
not be deemed to be in violation of any covenant contained herein as a result of
Harvey's: (i) providing urgent or emergency medical services within the
emergency room of any medical facility licensed as a hospital in the State of
South Carolina, or (ii) providing emergency care to any Seller Patient in a
potentially life-threatening situation, or (iii) providing employment services
to Doctor's Care, P.A., a South Carolina professional corporation ("Doctor's
Care"). In the event Doctor's Care and Harvey enter into an employment agreement
at any time in the future, Harvey shall receive as compensation thereunder the
sum of Eighty-Five and
76
No/100 ($85.00) Dollars per hour. Nothing contained herein shall be construed as
to require Harvey and Doctor's Care to enter into any such employment agreement.
3. Consideration. In consideration of the restrictions and
covenants contained herein, Harvey hereby acknowledges the receipt and adequacy
of ten ($10.00) dollars and such other consideration set forth in the Purchase
Agreement.
4. Remedies.
a. Accounting for Lost Profits. If Harvey shall violate
any of the provisions of Sections 1 or 2, Buyer shall be entitled to recover any
non-speculative lost profits incurred by Buyer and/or Doctor's Care as a result
of, growing out of, or in connection with, any such violation by Harvey. This
remedy shall be in addition to, and not in limitation of, any injunctive relief
or other rights, remedies, or damages, to which Buyer is or may be entitled as a
result of this Agreement.
b. Injunctive Relief. In the event of a breach or
threatened breach by Harvey of any of the provisions of Sections 1 or 2, Buyer,
in addition to, and not in limitation of, any other rights, remedies, or damages
available to Buyer at law or in equity, shall be entitled to a temporary
restraining order, preliminary injunction, and permanent injunction in order to
prevent or restrain any such breach by Harvey or by Harvey's partners, agents,
representatives, servants, employers, employees, companies, consulting clients,
and/or any and all persons directly or indirectly acting for or with Harvey.
Harvey agrees that in the event of any breach by Harvey of the covenants set
forth in this Agreement, Buyer shall suffer irreparable harm for which the
remedy of monetary damages may be inadequate.
c. Set Off. In the event of any adjudicated breach by
Harvey of this Agreement or the Purchase Agreement, in addition to the other
rights or remedies to which Buyer may be entitled, Buyer shall be entitled, at
its option, to set off and recoup against the payments becoming due pursuant to
the Purchase Agreement the amounts to which Buyer may become entitled. Harvey's
right to lawfully contest such set off or recoupment in any action to collect
the amounts due hereunder shall not be impaired by Buyer's exercise of such set
off or recoupment right.
d. Alternatives. Buyer shall have the option, in its sole
discretion, to enforce the various restrictions of Sections 1 and 2
cumulatively, in the alternative, or consecutively.
5. Reasonableness of Restrictions.
a. Acknowledgment. Harvey has carefully read and
considered the provisions of Sections 1, 2, 3 and 4, and, having done so,
voluntarily agrees that the restrictions set forth in those Sections, including,
but not limited to, the time period of restriction, the geographical areas of
restriction, and the scope of restricted activities set forth in Section 2, are
fair and reasonable and are reasonably required for the protection of the
legitimate interests of the Buyer, and its parent or subsidiary corporations,
partnerships, officers, directors, partners, employees and affiliates, including
but not limited to Doctor's Care.
b. Enforcement. In the event that, notwithstanding the
foregoing, any of the provisions of Sections 1, 2, or 4 or any parts thereof
shall be held to be invalid or unenforceable, the remaining provisions or parts
thereof shall nevertheless continue to be valid and enforceable as though the
invalid or unenforceable portions or parts had not been included therein. In the
event that any provisions of Sections 1 or 2 relating to the time period and/or
the areas of restriction and/or the scope of restricted activities and/or
related aspects shall be declared by a court of competent jurisdiction to exceed
the maximum restrictiveness such court deems reasonable and enforceable, the
time period and/or areas of restriction and/or the scope of restricted
activities and/or related aspects deemed reasonable and enforceable by the court
shall become and thereafter be the maximum restriction in such regard, and the
restriction shall remain enforceable to the fullest extent deemed reasonable by
such court.
6. Miscellaneous.
a. Burden and Benefit. This Agreement shall be binding
upon Buyer's successors and assigns and Harvey's heirs, personal and legal
representatives, successors and assigns, and shall inure to the benefit of
Buyer's successors and permitted assigns and Harvey's heirs, personal legal
representatives, successors, and permitted assigns.
77
b. Modifications. This Agreement can only be modified by
a written agreement duly signed by Harvey and an authorized representative of
Buyer. Moreover, in order to avoid uncertainty, ambiguity and misunderstandings
in their relationships, the parties hereto covenant and agree not to enter into
any oral agreement or understanding inconsistent or in conflict with this
Agreement; and the parties hereto further covenant and agree that any oral
communication allegedly or purportedly constituting such an agreement or
understanding shall be absolutely null, void and without effect.
c. Waiver. Any waiver by either party of any breach or
any term or condition hereof shall be effective only if in writing and such
writing shall not be deemed to be a waiver of any subsequent or other breach,
term or condition of this Agreement.
d. Assignments. Neither this Agreement nor any rights
hereunder may be assigned or otherwise transferred by Harvey.
e. Cumulative Remedies. All rights and remedies of a
party hereunder shall be cumulative and in addition to such rights and remedies
as may be available to a party at law or equity.
f. Venue and Jurisdiction. The parties hereto hereby (i)
agrees that any litigation, action or proceeding arising out of or relating to
this Agreement may be instituted in a state or federal court located in Horry,
Lexington or Richland Counties, South Carolina, (ii) waives any objection which
it might have now or hereafter to any such litigation, action, or proceeding
based upon improper venue or inconvenient forum, and (iii) irrevocably submits
to the jurisdiction of such courts in any such litigation, action or proceeding.
For all purposes of this Agreement, the parties hereto further agrees that
service of process may be effected pursuant to United States mail.
g. Entire Agreement. This Agreement constitutes the
entire agreement between the parties with respect to the subject matter hereof
and supersedes all prior contemporaneous written or oral agreements and
representations between the parties with respect thereto.
h. Governing Law. The construction and interpretation of
this Agreement shall at all times and in all respects be governed by the laws of
the State of South Carolina.
i. Severability. The invalidity or unenforceability or
any provision of this Agreement shall not render invalid or unenforceable any
other provision hereof.
j. Survival. All terms of this Agreement shall survive
the Closing under the Purchase Agreement.
k. Usage. Capitalized terms used herein which are not
otherwise defined herein shall have the meanings ascribed to them in the
Purchase Agreement. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Terms such as "hereof",
"hereunder", "hereto", "herein", and words of similar import shall refer to this
Agreement in its entirety and all references to "Paragraphs", "Sections", and
similar cross references shall refer to specified portions of this Agreement,
unless the context clearly requires otherwise.
l. Enforcement. In the event litigation or other legal
proceedings are commenced to enforce any rights under this Agreement, all
reasonable legal expenses (including reasonable attorney's fees) and other
direct costs of litigation of the prevailing party shall be paid by the
non-prevailing party. All remedies specified herein are cumulative and
non-exclusive, and parties shall be entitled to seek or enforce any other rights
or remedies available to them at law or in equity.
m. Notices. Any notice, request, approval, consent,
demand or other communication shall be effective upon the first to occur of the
following: (i) upon receipt by the party to whom such notice, request, approval,
consent, demand or other communication is being given; or (ii) three (3)
business days after being duly deposited in the United States certified mail,
return receipt requested, and addressed as follows:
78
Buyer: UCI Medical Affiliates of South Carolina, Inc.
6168 St. Andrews Road
Columbia, South Carolina 29212
Attn.: Stephen Seeling, Esquire
Harvey: Stephen A. Harvey, M.D.
3426 Wilderness Lane
Murrells Inlet, South Carolina 29576
The parties hereto may change their respective addresses by notice in writing
given to the other party to this Agreement.
IN WITNESS WHEREOF, this Non-Competition Covenant is executed under seal by
BA Buyer and Harvey to be effective as of the date first above written.
HARVEY:
/s/ Stephen A. Harvey, M.D. (SEAL)
Stephen A. Harvey, M.D.
BUYER:
UCI MEDICAL AFFILIATES OF SOUTH CAROLINA, INC.
By: /s/ Stephen S. Seeling (SEAL)
Its: Chief Operating Officer and Counsel
79
EXHIBIT H
BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS, that CONVENIENCE MEDICAL SERVICES, P.A., a
South Carolina professional corporation with offices at 108 Highway 17 North,
North Myrtle Beach, South Carolina 29582 (the "Seller"), for and in
consideration of the sum of Ten Dollars ($10.00), lawful money of the United
States, and other good and valuable consideration to them in hand paid at or
before the ensealing and delivery of these presents by UCI MEDICAL AFFILIATES OF
SOUTH CAROLINA, INC., a South Carolina corporation with offices at 6168 St.
Andrews Road, Columbia, South Carolina 29212 (the "Buyer"), the receipt and
sufficiency whereof is hereby acknowledge, has bargained and sold and by these
presents does sell, assign and transfer unto Buyer all of Seller's right, title
and interest in and to, all the machinery, equipment, computers, telephone
systems, inventory, furniture, furnishings, office equipment, and other tangible
personal property composing portions of the Assets described in the Asset
Purchase Agreement dated as of March 1, 1996, between Seller, Buyer, UCI Medical
Affiliates, Inc., Doctor's Care, P.A., and Stephen A. Harvey, M.D.(the
"Agreement"), all as provided in the Agreement.
TO HAVE AND TO HOLD the same unto Buyer, its successors and assigns,
forever. AND Seller does for itself and its successors and assigns, covenant and
agree to and with Buyer, its successors and assigns, to warrant and defend the
sale and conveyance of the aforesaid assets hereby sold unto Buyer.
This Bill of Sale is made, executed and delivered pursuant to the
Agreement, and is subject to all of the terms, provisions, and conditions
thereof, including (without limitation) the indemnification therein. To the
extent of any conflict between the terms hereof and thereof, the terms of the
Agreement shall be controlling.
All capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Agreement unless the context clearly requires otherwise.
IN WITNESS WHEREOF, Seller has duly executed this Bill of Sale to be
effective as of the 1st day of March, 1996.
IN THE PRESENCE OF: CONVENIENCE MEDICAL SERVICES, P.A.
(CORPORATE SEAL)
/s/ Jeanne Sparkes By: /s/ Stephen A. Harvey, M.D.
Its: President
/s/ N. David DuRant
80
STATE OF SOUTH CAROLINA )
) PROBATE
COUNTY OF HORRY )
PERSONALLY APPEARED before me the undersigned witness who, after first
being duly sworn, deposes and says that s/he saw the within named CONVENIENCE
MEDICAL SERVICES, P.A., by Stephen A. Harvey, M.D., its President, sign, seal
and, as its act and deed, deliver the within written Bill of Sale for the uses
and purposes therein mentioned and that s/he with the other witness whose
signature appears above, witnessed the execution thereof.
SWORN to before me this 1st
day of March, 1996. /s/ Jeanne Sparkes
Witness
/s/ N. David Durant (L.S.)
Notary Public for South Carolina
My Commission Expires: 04-03-2001
81
EXHIBIT I
ASSIGNMENT AND ASSUMPTION AGREEMENT
KNOW ALL MEN, that CONVENIENCE MEDICAL SERVICES, P.A., a South Carolina
professional corporation (the "Assignor"), for and in consideration of the sum
of Ten Dollars ($10.00), lawful money of the United States, and other good and
valuable consideration to it in hand paid at or before the ensealing and
delivery of these presents, by UCI MEDICAL AFFILIATES OF SOUTH CAROLINA, INC., a
South Carolina corporation ("Assignee"), the receipt and sufficiency whereof is
hereby acknowledged, hereby assigns to Assignee all of Assignor's right, title
and interest in and to the permits, licenses, computer software, and all other
intangible assets and rights composing portions of the Assets as described in
the Asset Purchase Agreement dated as of March 1, 1996, between Assignor,
Assignee, UCI Medical Affiliates, Inc., Doctor's Care, P.A., and Stephen A.
Harvey, M.D. (the "Agreement"), all as provided in the Agreement, plus the
equipment leases set forth on Schedule 1 attached hereto.
Assignee hereby covenants with Assignor to assume and faithfully perform
and discharge all of the terms, covenants, liabilities and obligations (subject
to the Agreement) maturing and to be performed or discharged by Assignor under
the above assigned contracts beginning on the date hereof and henceforth.
This Assignment is made, executed, and delivered pursuant to the Agreement,
and is subject to all the terms, provisions and conditions thereof, including
(without limitation) the mutual indemnifications therein. To the extent of any
conflict between the terms hereof and thereof, the terms of the Agreement shall
be controlling.
All capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Agreement unless the context clearly requires otherwise.
IN WITNESS WHEREOF, the parties have duly executed this Assignment and
Assumption Agreement to be effective as of the 1st day of March, 1996.
ASSIGNOR:
CONVENIENCE MEDICAL SERVICES, P.A.
BY: /s/ Stephen A. Harvey, M.D.
Its: President
ASSIGNEE:
UCI MEDICAL AFFILIATES OF SOUTH CAROLINA, INC.
By: /s/ Stephen S. Seeling
Its: Chief Operating Officer and Counsel
82
SCHEDULE 1
Equipment Leases To Be Assumed
COULTER ELECTRONICS, INC.
Effective Date: November 22, 1994
Term of Lease: 63 Months
Lease Payment: $930.04 (plus tax)
Supplier: Coulter Leasing Corp.
Equipment: MD16 with Histogiems
AT&T
Effective Date: July 8, 1994
Term of Lease: 60 Months
Lease Payment: $118.37
Supplier: AT&T Credit Corporation
Equipment: Partner Plus
COMPUSYSTEMS, INC.
Effective Date: January 25, 1993
Term of Lease: 60 Months
Lease Payment: $449.99
Supplier: CompuSystems, Inc.
Equipment: 250 Meg Int Tape Drive
5 DC 6250 Tape Cartridges
Hardware and Software Maintenance
GE CAPITAL LEASE
Effective Date: October 7, 1994
Term of Lease: 36 Months
Lease Payment: $119.24
Supplier: General Electric Capital Corporation
Equipment: Minolta EP 1080/Automatic Document Feeder
AT&T CAPITAL LEASING SERVICES, INC.
Effective Date: March 25, 1995
Term of Lease: 60 Months
Lease Payment: $2,882.41
Supplier: Abbott Diagnostics
Equipment: Abbott Spectrum Series II
83
EXHIBIT J
SECURITY AGREEMENT
STATE OF SOUTH CAROLINA )
) SECURITY AGREEMENT
COUNTY OF HORRY )
THIS SECURITY AGREEMENT is made and given as of the 1st day of March, 1996,
by UCI MEDICAL AFFILIATES OF SOUTH CAROLINA, INC., a South Carolina corporation
and DOCTOR'S CARE, P.A., a South Carolina professional corporation (hereinafter
called "Owners"), to CONVENIENCE MEDICAL SERVICES (hereinafter called the
"Secured Party"), pursuant to that certain Asset Purchase Agreement dated as of
March 1, 1996, by and among UCI MEDICAL AFFILIATES OF SOUTH CAROLINA, INC.; UCI
MEDICAL AFFILIATES, INC.; DOCTOR'S CARE, P.A.; STEPHEN A. HARVEY, M.D. ; and the
Secured Party (the "Agreement"). Pursuant to the Agreement, and for value
received, the Owners hereby grant to Secured Party a security interest, in
accordance with the terms and conditions hereinafter set forth, in the following
described property (hereinafter called "Collateral"):
(1) The Assets set forth in Section 1 of the Agreement, more
fully defined in Schedule 1 attached hereto; and
(2) The medical records set forth in Section 2 of the
Agreement, more fully described in Schedule 2 attached hereto
to secure the payment of the indebtedness evidenced by that certain secured
Promissory Note (the "Note") in the original principal amount of Two Hundred
Forty Thousand No/100 ($240,000.00) Dollars executed by UCI Medical Affiliates
of South Carolina, Inc. simultaneously herewith and payable to the Secured
Party, and any extensions or renewals thereof.
OWNERS REPRESENT, WARRANT AND AGREE THAT:
1. The Collateral is used by Owners for a primary care
medical facility.
2. The Owners shall do all acts that may be necessary to
maintain, preserve and protect the Collateral.
3. Owners will maintain the Collateral in good condition
and repair, will not waste or destroy the Collateral or any part thereof, will
not use the Collateral in violation of any applicable law or policy of insurance
and will promptly pay when due all taxes and assessments upon the Collateral or
its operation or use.
4. Owners will keep the Collateral insured until this
Security Agreement is terminated with hazard coverage against all reasonable
expected risk to which it is exposed including fire, theft, accident and
physical damage in such amounts and with an insurance company as shall be
reasonably acceptable to Secured Party. Secured Party shall be provided with
continuing evidence of such insurance.
Notwithstanding anything contained herein to the contrary, nothing
contained herein shall be interpreted in any way to hinder, restrict or in any
way preclude the Owners' relocating, leasing, selling or renting, in whole or in
part, the Collateral in the regular course of Owners' business. Furthermore such
relocation, sale, lease, or rental shall not be deemed, in any way, to
constitute a Default hereunder.
84
THE PARTIES FURTHER AGREE THAT:
1. At its option, and without any obligation to do so, Secured Party may
discharge taxes, liens, or other encumbrances at any time levied or place on the
Collateral, pay for insurance on the Collateral, and pay for the maintenance and
preservation of the Collateral should Owners fail to do so. Owners agree to
reimburse Secured Party on demand for any payments so made and until such
reimbursement the amount so paid by Secured Party shall be added to the
principal amount of the indebtedness secured by this Security Agreement.
2. At the request of Secured Party, Owners will join with Secured
Party in executing one or more financing statements or other documents in form
satisfactory to Secured Party in order to perfect and protect any security
interest granted hereby for filing the same in all public offices wherever
filing or recording is deemed by Secured Party to be necessary or desirable.
EVENT OF DEFAULT: Owners shall be in default under this Security Agreement
upon breach by Owners of any obligation imposed by this Security Agreement or
the Note and the failure of the Owners to correct such breach within thirty (30)
days of receipt of written notice of the breach from the Secured Party.
REMEDIES OF SECURED PARTY UPON DEFAULT:
Upon default, Secured Party shall have all of the rights and remedies of a
Secured Party under the Uniform Commercial Code in force in this state at the
date hereof and, in addition, the following rights and remedies:
1. Secured Party may peaceably, by its own means or with judicial
assistance, enter Owners' premises and take possession of the Collateral, or
render it unusable, or dispose of the Collateral on Owners' premises, and Owners
will not resist or interfere with such action.
2. Secured Party may require Owners to assemble all or any part
of the Collateral and make it available to Secured Party at any place reasonably
convenient and designated in a notice sent to Owners.
ADDITIONAL PROVISIONS
1. No failure on the part of Secured Party to exercise and no delay in
exercising any right or remedy hereunder shall operate as a waiver hereof nor
shall any single or partial exercise by Secured Party of any right or remedy
hereunder preclude any other or future exercise hereof or the exercise of any
other right or remedy.
2. All rights of Secured Party hereunder shall inure to the
benefit of its successors and assigns and all obligations of Owners shall bind
their successors, executors or administrators, or his or its successors or
assigns.
3. Any notice required to be given may be given by mailing such
notice, postage prepaid, to the following addresses:
OWNERS 6168 St. Andrews Road
Columbia, SC 29212
Attn: Stephen S. Seeling, Esquire
SECURED PARTY 3426 Wilderness Avenue
Murrells Inlet, South Carolina 29576
Attn: Stephen A. Harvey, M.D.
85
4. This Security Agreement may not be changed orally but only by an
agreement in writing and signed by the party against whom enforcement of any
waiver, change, modification, or discharge is sought.
5. This Security Agreement and the rights and obligations to the
parties hereunder shall be construed and interpreted in accordance with the laws
of the State of South Carolina in force at the date of this Agreement. In the
event of any inconsistency between the terms hereof and the terms of the
Agreement, the terms of the Agreement shall be controlling.
[SIGNATURE PAGE ATTACHED]
86
IN WITNESS THEREOF, the parties hereto have caused these presents to be
executed effective as of the day and year first above written.
WITNESSES: OWNERS:
UCI MEDICAL AFFILIATES OF
SOUTH CAROLINA, INC., a South
Carolina corporation
/s/ N. David DuRant By: /s/ Stephen S. Seeling (SEAL)
Its: Chief Operating Officer and Counsel
/s/ Jeanne Sparkes
DOCTOR'S CARE, P.A., a South Carolina
professional corporation
/s/ N. David DuRant By: /s/ Stephen S. Seeling (SEAL)
Its: Secretary
/s/ Jeanne Sparkes
SECURED PARTY:
CONVENIENCE MEDICAL SERVICES, INC., a
South Carolina professional corporation
/s/ N. David DuRant By: /s/ Stephen A. Harvey, M.D. (SEAL)
Its: President
/s/ Jeanne Sparkes
87
SCHEDULE 1
List of Assets
1 Wheelchair
2 Refrigerators
1 Autoclave
2 Glucometers
2 Hair Dryers
6 Exam Tables
2 Electric Exam Tables
7 Welch Allen -- Wall Mount Transformers
1 Welch Allen -- Portable Transformer
7 Goose Neck Lamps
2 Surgical Lights
9 Rolling Exam Stools
1 Infant Scale
1 Regular Adult Scale
1 Ultra Sound Machine
1 Rolling Table
3 Foot Stools
1 EKG Machine
1 Alcohol Breathalizer Machine
1 Printer (with breathalizer)
3 Mayo Stands
1 O2 cart with Wheels
1 IV Stand
1 Adult Ambu Bag
1 Pediatric Ambu Bag
1 Papoose Board
1 Electrocator
2 Ear Syringes
1 Head Mount Magnifier
1 Hand Held Black Light
8 Metal Trash Cans with Foot Pedal
2 Portable Blood Pressure Cuffs
3 Wall Mount Blood Pressure Cuffs
1 Large Blood Pressure Cuff
1 Pediatric Blood Pressure Cuff
1 X-Ra Table -- Complete Unit
1 Portable Step Stool
4 14 x 17 Cassettes -- 2 high speed; 2 rare earth
8 View Boxes
4 10 x 12 Cassettes
1 Processor -- automatic
1 Film Bend
1 Full Lead Apron
1 Lap Apron
1 Set of Lead Gloves
2 10 Pound Weights
6 Lead Blockers
1 Hot Light
88
SCHEDULE 2
List of Patient Records
See Exhibit C - Bill of Sale (Medical Records) of the Asset Purchase Agreement.
89