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Exhibit 10.27
TRUST AGREEMENT
This Trust Agreement ("Agreement") is effective as of the 30th day of
September, 1996 between AMERIPATH, INC., a Delaware corporation (the
"Settlor"), and XXXXX X. XXXXXX, M.D. ("Xxxxxx") as trustee (in such capacity,
the "Trustee").
WHEREAS, as of the date hereof, the Settlor owns one hundred percent
(100%) of the outstanding capital stock of AmeriPath Cincinnati, Inc., an Ohio
professional corporation (the "Cincinnati PC");
WHEREAS, prior to the execution of this Agreement, the Settlor entered
into a certain Stock Purchase Agreement (the "PC Purchase Agreement") with
Xxxxxx and Xxxx Xxxxxx, M.D. ("Xxxxxx") pursuant to which Xxxxxx and Xxxxxx
sold all of the outstanding Cincinnati PC shares to the Settlor on the terms
and conditions set forth in the PC Purchase Agreement; and
WHEREAS, the Settlor seeks to create the Trust as provided herein (the
"Trust") and seeks to appoint Xxxxxx as the initial Trustee of the Trust.
NOW, THEREFORE, in consideration of the promises and covenants
contained herein, the parties agree to be legally bound as follows:
1. CREATION OF THE TRUST; INITIAL TRUSTEE: SUCCESSOR TRUSTEE.
(a) Name. The Trust shall be named and referred to as
the "AmeriPath Cincinnati Trust."
(b) Initial Trustee. The Settlor hereby appoints Xxxxxx
to act as the initial Trustee in accordance with the terms of this Agreement.
Xxxxxx hereby accepts such appointment and agrees to act as the Trustee in
accordance with the terms of this Agreement.
(c) Successor Trustee. If Xxxxxx or any Successor
Trustee ceases to serve, is removed, or resigns as Trustee pursuant to Section
6 hereof, the Successor Trustee (as defined below) shall be named pursuant to
Section 6(a) and 6(b) of this Agreement, as appropriate. A Successor Trustee
shall have all the powers, obligations and discretions given to the original
Trustee. Any person or institution may rely upon the representations of a
Successor Trustee, as to its authority and incumbency, until receiving written
instructions to the contrary from the Settlor.
2. PROPERTY IN TRUST.
(a) Initial Deposit in Trust. Concurrently with the
execution of this Agreement, the Settlor is delivering to the Trustee, on
behalf of the Trust, a stock certificate evidencing 50 shares of capital stock
of the Cincinnati PC (the "Initial Trust Estate"). The Trustee acknowledges
receipt of the Initial Trust Estate. The Trustee agrees that it will hold,
manage and distribute the Initial Trust Estate, Cincinnati PC shares and all
other property of any
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kind that becomes a part of the Trust in accordance with this Agreement and the
PC Purchase Agreement for the primary benefit of the Settlor.
(b) Other Additions To The Trust. At any time, the
Settlor may add property to the Trust. All such additions, however, shall be
subject to the Trustee's power to refuse to accept such property if, in its
sole discretion, it determines that such property would cause the Trustee to
incur liability under any federal, state, or local law or regulation. The
Settlor agrees that it shall add, and the Trustee agrees that it shall accept,
hold, manage and distribute, funds and securities issued by the Settlor in such
amounts and at such times as may be required to discharge the Trust's
obligations under the PC Purchase Agreement.
3. WITHDRAWAL, TERMINATION, AND MODIFICATION.
(a) Withdrawal. The Settlor reserves the right at any
time without the consent of the Trustee to withdraw any asset of the Trust or
to terminate the Trust by written instrument delivered personally or by
certified mail, return receipt requested, to the Trustee.
(b) Modification. The Settlor reserves the right at any
time without the consent of the Trustee to modify this Agreement in any respect
by delivery personally or by certified mail, return receipt requested, of a
written modification to the Trustee; provided, however, that any modification
affecting the powers or obligations of the Trustee shall be subject to the
written approval of the Trustee, who, upon disagreement with said
modifications, shall be deemed to have resigned its office as Trustee.
(c) Termination of Trust Agreement. This Agreement and
the Trust created hereunder shall continue until the earlier of (i) the date
specified in a written notice given to the Trustee by the Settlor, and (ii) 21
years after the death of the last survivor of the descendants of the late King
Xxxxxx V of the United Kingdom of Great Britain and Northern Ireland who were
living on the date hereof, but if any rights, privileges or options hereunder
shall be or become valid under applicable law for a period subsequent to the
21st anniversary of the death of such last survivor (or, without limiting the
generality of the foregoing, if legislation shall become effective providing
for the validity or permitting the effective grant of such rights, privileges
and options for a period in gross exceeding the period for which such rights,
privileges and options are hereinabove stared to extend and be valid), then
such right, privileges or options shall not terminate as aforesaid but shall
extend to and continue in effect, but only if such non-termination and
extension shall then be valid under applicable law, until such time as the same
shall, under applicable law, cease to be valid.
(d) Actions by the Trustee upon Termination. Upon
termination of this Agreement and the Trust created hereby, the Trustee shall
take such action as may be specified in writing by the Settlor to transfer the
Assets to the Settlor.
(e) Compliance with Laws. The Settlor agrees not to
exercise any right reserved in Section 3(a), 3(b) or 3(c) hereof in a manner
that could foreseeably result in a
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violation of any Laws (as hereinafter defined) by any one or more of the
Settlor, the Cincinnati PC, the Trustee or Xxxxxx.
4. DISTRIBUTIONS FROM TRUST.
(a) Distribution of Income. The Trustee shall distribute
the net income of the Trust, if any, to the Settlor at such times and in such
amounts as the Settlor directs in writing.
(b) Distribution of Property or Principal. The Trustee
shall pay or distribute the property or principal of the Trust to the Settlor
at such times and in such amounts as the Settlor directs in writing. The
Settlor agrees not to direct the distribution of the Cincinnati PC shares in a
manner that could foreseeably result in a violation of any Laws (as hereinafter
defined) by any one or more of the Settlor, the Cincinnati PC, the Trustee or
Xxxxxx.
5. POWERS AND OBLIGATIONS OF TRUSTEE.
(a) Powers. The Trustee, as a fiduciary, shall have,
subject to the restrictions set forth in this Section 5 and in addition to all
other powers granted to the Trustee by law, the powers set forth in this
Section 5. The Trustee shall have such powers without giving bond and without
being supervised by any court.
i) General Powers Over Trust Funds. The Trustee
may not distribute, sell, transfer, pledge or exchange any or all of the assets
of the Trust (the "Assets") without the prior written consent of the Settlor;
but otherwise has full power and authority to do everything in the management
and for the preservation of the Assets that it considers proper and for the
best interests of the Trust.
ii) Fiduciary Responsibility. The Trustee shall
not be held responsible for any loss sustained by the Trust through any error
of judgment made in good faith, but shall be liable only for the Trustee's own
willful misconduct, gross negligence or breach of good faith. The Trustee
shall not be personally liable upon any debt of or claim against the Trust
unless personal liability has been expressly assumed in writing by the Trustee.
iii) Practice of Medicine. It is anticipated that
the Assets shall include shares of stock in one or more professional
corporations. Nothing contained in any provision of this Agreement shall be
construed so as to constitute the practice of medicine by the Trust, the
Trustee, or the Settlor.
iv) Indemnification. The Settlor shall indemnify
the Trustee, in the Trustee's individual capacity, from any liability, loss,
claim, damage, judgment, award or expense (including reasonable attorney's fees
and disbursements) arising out of the performance of the trustee's duties
hereunder; provided, however, that the Settlor shall have no obligation to
indemnify the Trustee for the Trustee' s own willful misconduct, gross
negligence or breach of good faith. The Settlor may provide insurance for the
Trustee in such types and amounts as
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the Settlor deems reasonably necessary. The Trustee's right to indemnification
hereunder shall survive any resignation or removal of the Trustee, or and
termination of the Trust, with respect to any claim or matter arising out of
any action taken or not taken by the Trustee, or any other circumstance or
event occurring or existing, on or before the date of any such resignation,
removal or termination.
(b) Records. The Trustee shall keep such records of
Trust transactions as may be requested in writing by the Settlor; and the
Settlor, through any executive officer, shall at all reasonable times have the
right to inspect the records of the Trust.
(c) Release of Trustee's Obligation to Examine Records.
The Trustee or Successor Trustee shall have no responsibility for inquiring
into, reviewing or auditing the administration of any Asset before such asset
was accepted as Trust property, and Successor Trustee shall have no liability
for any act or omission of any prior Trustee or prior Successor Trustee
regarding the administration of Assets; provided, however, that no Trustee or
Successor Trustee shall be relieved of responsibility with reference to its own
acts or omissions in any other capacity.
(d) Action Upon Instructions. Subject to the provisions
of Section 8 hereof, upon the written instructions of the Settlor, the Trustee
will: (i) give such notice or direction or exercise such right, remedy or
power hereunder or in respect of all or any part of the Assets, as may be
specified in such instructions; (ii) take such action to hold, preserve,
protect or otherwise deal with the Assets as may be specified in such
instructions; (iii) deliver certificates evidencing Cincinnati PC shares to
such person for safekeeping as may be specified in such instructions; and (iv)
exercise the Trust's rights as holder of Cincinnati PC shares in such manner as
may be specified in such instructions (including exercising rights to consent
in writing; vote at meetings of stockholders (in person or by proxy) or
otherwise take such actions as under applicable law shareholders are permitted
or required to take (including election of directors)).
(e) No Duties Except as Specified in Trust Agreement or
Instructions. The Trustee shall not have any duty or obligation to manage,
control, use, make any payment in respect of, register, record, insure,
inspect, sell, dispose of or otherwise deal with the Assets, or to otherwise
take or refrain from taking any action under or in connection with the Assets,
except as expressly provided by the terms of this Agreement or in written
instructions from the Settlor, and no implied duties or obligations shall be
read into this Agreement against the Trustee.
(f) Absence of Duties. Except in accordance with written
instructions furnished pursuant to Section 5(d) and without limiting the
generality of Section 5(e), the Trustee shall have no duty to (i) file, record
or deposit this Agreement or any instrument or document described herein, or to
maintain any such filing, recording or deposit or to refile, rerecord or
redeposit any such document, (ii) obtain insurance on Assets or effect or
maintain any such insurance, other than to receive and forward to the Settlor
any notices, policies, certificates or binders furnished to the Trustee, (iii)
pay or discharge any tax or any lien owing with respect
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to or assessed or levied against any part of the Assets, other than to forward
notice of such tax or lien received by the Trustee to the Settlor, or (iv)
manage, control, use, sell, dispose of or otherwise deal with any part of the
Assets.
(g) Reliance; Advice of Counsel. The Trustee shall not
incur any liability to any Person in acting upon any signature, instrument,
notice, resolution, request, consent, order, certificate, resort, opinion, bond
or other document or paper believed by him to be genuine and believed by him to
be signed by the proper party or parties. The Trustee may accept and rely upon
a certified copy of a resolution of the board of directors or other governing
body of any corporate party as conclusive evidence that such resolution has
been duly adopted by such body and that the same is in full force and effect.
As to any fact or matter the manner of ascertainment of which is not
specifically prescribed herein, the Trustee may for all purposes hereof rely on
an officer's certificate of the relevant party, as to such fact or matter, and
such certificate shall constitute full protection to the Trustee for any action
taken or omitted to be taken by him in good faith in reliance thereon. In the
administration of the trusts hereunder, the Trustee may execute any of the
trusts or powers hereof and perform his powers and duties hereunder directly or
through agents or attorneys and may, at the expense of the Trust, consult with
counsel, accountants and other skilled persons to be selected and employed by
him, and the Trustee shall not be liable for anything done, suffered or omitted
in good faith by it in accordance with the advice or opinion of any such
counsel, accountants or other skilled persons and not contrary to express
provisions of this Agreement, unless the selection of such counsel, accountants
or other persons shall have been made with negligence, willful misconduct or
bad faith.
6. SUCCESSOR TRUSTEE AND COMPENSATION.
(a) Removal of Trustee and Appointment of Successor. Any
Trustee may be removed at any time with or without cause by a document signed
by the Settlor. The Settlor shall designate and appoint a Successor Trustee or
Trustees (a "Successor Trustee") who, to the extent required by law shall be a
doctor of medicine duly licensed to practice medicine in the State of Ohio.
Any such Successor Trustee shall be appointed in accordance with the terms of
this Agreement, and the Settlor shall deliver by certified mail, return receipt
requested, a document making such appointment, accompanied by the documents
removing the Trustee, to the Trustee being removed and to such Successor
Trustee. The Successor Trustee appointed in accordance with the foregoing
shall promptly deliver a written acceptance thereof to the then acting Trustee.
All of the Trust property in the possession of the then acting Trustee shall be
delivered to the Successor Trustee, together with an accounting of Trust
property, receipts and disbursements (which accounting shall be conducted at
the expense of the Settlor); upon so doing, the then acting Trustee shall have
no further responsibility or right to administer the Trust. Thereupon, such
Successor Trustee shall become vested with all of the Trust property with the
same effect as if originally designated as Trustee.
(b) Resignation of Trustee. Xxxxxx, as Trustee, or any
successor Trustee acting hereunder may resign at any time by giving written
notice to the Settlor which resignation
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shall be effective immediately upon receipt of such notice In that event, the
Settlor shall select a Successor Trustee and the Trust Assets shall be
transferred in accordance with terms set forth in Section 6(a) above.
(c) Compensation of Trustee. Any individual serving as
the Trustee hereunder shall serve without bond. As compensation for all
services under this Agreement, the Settlor shall pay to the Trustee, for his
individual account, $100 per year (or portion thereof) during the term of this
Agreement, payable in arrears on September 30 of each year (commencing
September 30, 1997) or earlier removal or resignation of the Trustee or
termination of the Trust. The Trustee will be entitled to reimbursement only
for actual expenses as the Trustee hereunder and the indemnification provided
in Section 5 hereof.
(d) Situs of Trust. Except as otherwise expressly
provided herein, the validity, effect, and interpretation of this Agreement,
and of the property interests created herein, shall be controlled by the laws
of the State of Ohio; such laws shall also govern the administration of the
Trust hereunder.
7. NOTICE. Any notice required or permitted to be given under
this Agreement shall be given by registered or certified mail, return receipt
requested in a pre-paid envelope, by overnight mail or courier, or by facsimile
transmission with receipt acknowledged addressed to the parties as follows (or
at other addresses as shall be given in writing by either party to the other):
If to Settlor: AmeriPath, Inc.
000 Xxxxx Xxxxx Xxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. New, President
If to Trustee: Xxxxx X. Xxxxxx, M.D., Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, M.D.
8. NO VIOLATION OF LAW. Nothing in this Agreement shall be
construed to impose upon Xxxxxx any requirement if complying with such
requirement could foreseeably result in a violation of any law, rule,
regulation, order, judgment, award or determination of any court, arbitrator,
governmental or other authority, including the violation of any code of
professional ethics or other mandate of the medical profession (collectively,
the "Laws"). The Settlor shall not knowingly issue to Xxxxxx any direction or
impose on him any requirements, which if performed by Xxxxxx could foreseeably
violate the Laws. Without limiting the foregoing, the Settlor shall not
interfere in any way with the exercise by Xxxxxx of his professional judgment.
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9. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
10. SALE OF THE ASSETS BY THE TRUSTEE IS BINDING. Any sale,
transfer, or other conveyance of the Assets or any part thereof by the Trustee
made pursuant to the terms of this Agreement or the PC Purchase Agreement shall
bind the Settlor and shall be effective to sell, transfer and convey all right,
title and interest of the Trustee and the Settlor in and to such Assets or any
part thereof. Xxxxxx, acting in his individual capacity as Seller under the PC
Purchase Agreement, shall not be required to inquire as to the authorization,
necessity, expediency or regularity of such sale, transfer or conveyance with
respect thereto by the Trustee or the Settlor.
11. SUCCESSORS AND ASSIGNS. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the
Settlor and its successors and assigns and the Trustee and his successors,
representatives and assigns, all as herein provided. Any request, notice,
direction, consent, waiver or other instrument or action by each of the parties
hereto shall bind the successors and assigns of such party. Upon the death of
any individual acting as the Trustee hereunder, his estate or other legal
representative shall promptly resign as the Trustee pursuant to Section 6(b)
hereof.
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IN WITNESS WHEREOF, the parties have executed this document as of the
date first above written.
AMERIPATH, INC.
By: /s/ Xxxxxx X. Xxxx
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Its: Vice President
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TRUSTEE:
/s/ Xxxxx X. Xxxxxx, M.D
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Xxxxx X. Xxxxxx, M.D.
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