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Exhibit 2.1
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EXECUTION COPY
ASSET PURCHASE AGREEMENT
BY AND AMONG
AMERIPATH, INC.,
ANATOMIC PATHOLOGY ASSOCIATES, LLP
AND
THE PERSONS LISTED ON SCHEDULE I HERETO
EFFECTIVE AS OF FEBRUARY 1, 1998
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ASSET PURCHASE AGREEMENT (the "AGREEMENT"), dated and effective as of
February 1, 1998, by and among AMERIPATH, INC., a Delaware corporation, or its
permitted assigns ("AMERIPATH" or the "PURCHASER"), ANATOMIC PATHOLOGY
ASSOCIATES, LLP, an Indiana limited liability partnership ("APA" or the
"Seller"), and the persons listed on Schedule I hereto (referred to herein
collectively as the "PARTNERS" and individually as a "PARTNER"), which Partners
collectively own all of the partnership interests in Seller.
WHEREAS, the Seller owns all of the Assets (as such term is defined in
SECTION 1.1 hereof) and uses the Assets in the conduct of an anatomic pathology
business (the "BUSINESS");
WHEREAS, the Purchaser desires to purchase all of the Assets from the
Seller, on the terms and subject to the conditions hereinafter set forth;
WHEREAS, the Partners desire that the Seller sell, assign, convey,
transfer and deliver the Assets to the Purchaser, on the terms and subject to
the conditions hereinafter set forth;
WHEREAS, the Purchaser has caused the formation of AmeriPath APA, LLC,
an Indiana limited liability company ("AmeriPath APA");
WHEREAS, as of the closing of the transactions contemplated by this
Agreement, certain of the Partners shall become employed by AmeriPath APA;
WHEREAS, as a condition to the closing of the purchase of the Assets by
AmeriPath, AmeriPath APA and AmeriPath Indiana, Inc., an Indiana corporation and
a wholly-owned subsidiary of AmeriPath ("AMERIPATH INDIANA"), shall enter into a
certain management agreement (the "MANAGEMENT AGREEMENT") pursuant to which
AmeriPath Indiana shall manage the non-medical aspects of the business of
AmeriPath APA; and
WHEREAS, although the parties hereto have agreed as to the minimum
value of the Assets, they are not able to agree as to the total value of the
Assets, and thus the parties hereto have agreed to certain additional contingent
purchase price consideration based upon the results of operations of the Assets
as more fully set forth herein; and
NOW, THEREFORE, for and in consideration of the mutual benefits to be
derived hereby and the premises, representations, warranties, covenants and
agreements herein contained, AmeriPath, each of the Partners and Seller hereby
agree, intending to be legally bound, as follows:
ARTICLE I
TRANSFER OF ASSETS
1.1 PURCHASE AND SALE OF ASSETS. Except as otherwise provided in
SECTION 1.2 hereof, at the Closing (as such term is defined in SECTION 9.1
hereof), the Seller shall sell, transfer, convey, assign and deliver to the
Purchaser or its assignee, and the Purchaser or its assignee shall
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purchase and accept delivery of, the following tangible and intangible assets
and properties of the Seller (collectively, the "ASSETS"):
(a) all of the Seller's right, title and interest in and to the
fixtures, leasehold improvements, signage, lighting, supplies, equipment,
machinery and all other tangible and intangible assets and properties of the
Seller used in the operation of the Business, the material items of which are
listed on SCHEDULE 1.1 attached hereto;
(b) all of the Seller's right, title and interest in and to the
utility, security and other deposits and prepaid expenses relating to the
Business;
(c) all of the Seller's right, title and interest in and to all
patents, patent applications, inventions, marks, formulas (patented and
unpatented), copyrights, copyright applications, logos, franchises, proprietary
knowledge, trade secrets, technical information, quality control data, processes
(whether secret or not), methods and other similar know-how or rights used in
the conduct of the Business, including, but not limited to the areas of
retailing, marketing, advertising and personnel training and recruitment;
(d) all of the Seller's right, title and interest in and to all
tradenames used in the Business, and all variants thereof and all goodwill
associated therewith;
(e) all of the Seller's right, title and interest in and to the
Business as a going concern and its franchises, permits, licenses, telephone
numbers, customer lists, vendor lists, referral lists and contracts, advertising
materials and data, restrictive covenants, choices in action and similar
obligations owing to the Seller, together with all books, computer software,
files, papers, records and other data of the Seller relating to the Assets
and/or used by the Seller in the operation of the Business;
(f) all of the Seller's right, title and interest in and to any
and all inventory and to all other property (real and personal) and rights of
every kind or nature used by the Seller in the operation of the Business, other
than the Excluded Assets described in SECTION 1.2 hereof.
It is specifically understood and agreed by the parties hereto that the
Purchaser is acquiring and the Seller is selling, all of Seller's right, title,
and interest to and in the tangible and intangible assets attributable to or
used by the Seller in the Business, other than the Excluded Assets (as defined
in SECTION 1.2 hereof). Other than as provided in Section 2.15(a) hereof, all of
the Assets transferred hereunder shall be free and clear of all liens,
encumbrances, claims, mortgages, security interests, pledges, charges and other
restrictions of any kind or nature whatsoever. Except as otherwise set forth on
Schedule 1.1 hereof, all of the assets located at the Seller's place of business
are owned or leased by the Seller.
1.2 EXCLUDED ASSETS. It is specifically understood and agreed by the
parties hereto that the Seller is not selling, and the Purchaser is not
purchasing the assets and properties of the Seller listed on SCHEDULE 1.2
attached here to (the "EXCLUDED ASSETS").
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1.3 METHOD OF CONVEYANCE. The sale, transfer, conveyance, assignment
and delivery by the Seller of the Assets to the Purchaser hereunder shall be
effected on the Closing Date (as hereinafter defined) by the Seller's delivery
of (i) a xxxx of sale in the form attached hereto as EXHIBIT 1.3, (ii) all
assignments and other instruments of conveyance as the Purchaser may request,
all in form satisfactory to the Purchaser and its counsel, (iii) except as
otherwise set forth in Section 2.15(a) good, valid and marketable title to the
Assets, free and clear of any and all liens, encumbrances, claims, mortgages,
security interests, pledges, charges and other restrictions of any kind or
nature whatsoever and (iv) all other documents and instruments required to be
delivered by the Seller under the terms of this Agreement. In addition, on the
Closing Date, the Purchaser shall pay to the Seller the Purchase Price specified
in SECTION 1.5 hereof.
1.4 ASSUMED OBLIGATIONS. The Purchaser hereby agrees to assume, satisfy
and discharge, the liabilities and obligations of the Seller incurred in the
ordinary course of business, including but not limited to those liabilities and
obligations set forth on SCHEDULE 1.4(a) hereto with respect to the Business
(the "ASSUMED OBLIGATIONS"). Notwithstanding the immediately preceding sentence
or any other provision set forth herein, the parties hereto acknowledge and
agree that (i) the Purchaser shall not assume, satisfy, discharge or otherwise
be responsible for any liability, obligation, debt or commitment of the Seller
or the Partners of any kind or nature whatsoever, whether absolute or
contingent, accrued or unaccrued, asserted or unasserted, known or unknown, or
otherwise set forth on SCHEDULE 1.4(b) (the "EXCLUDED LIABILITIES") and (ii) all
of the Excluded Liabilities shall remain the sole, exclusive and absolute
responsibility of the Seller and the Senior Partners (as hereinafter defined).
The Seller and each of the Senior Partners jointly and severally agree to
indemnify the Purchaser pursuant to SUBSECTION 11.2 for the Excluded
Liabilities, among other things.
1.5 PURCHASE PRICE. In reliance on the representations, warranties,
agreements and covenants of the Partners and the Seller made herein, and as full
consideration for the Assets to be sold, transferred, conveyed and delivered by
the Seller to the Purchaser pursuant to this Agreement at the Closing, AmeriPath
shall deliver at the Closing, the following consideration in the aggregate (the
"PURCHASE PRICE") as follows:
(a) EIGHT MILLION THREE HUNDRED FORTY THOUSAND AND NO/100
DOLLARS ($8,340,000) shall be delivered to the Seller, by cashier's
check or by wire transfer;
(b) Certificates evidencing a number of shares of Common
Stock, par value $.01 per share, of AmeriPath EQUAL TO TWO MILLION
SEVEN HUNDRED EIGHTY THOUSAND AND NO/100 DOLLARS ($2,780,000) divided
by the "average share price," where the "average share price" is the
average of the closing prices for shares of AmeriPath stock traded
through NASDAQ for the ten (10) trading days immediately preceding the
Closing Date, as reported in the Wall Street Journal, Eastern edition
(the "AMERIPATH STOCK") shall be issued to the partners of Seller in
the amounts and as indicated on SCHEDULE 1.5 hereof. The AmeriPath
Stock will be issued at Closing but will be subject to vesting over
five years, in accordance with SECTION 1.9 hereof;
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(c) 7% Non-Negotiable Contingent Subordinated Promissory
Notes, due on January 31, 2003, in the form attached hereto as EXHIBIT
1.8 in the maximum aggregate principal amount of FIVE MILLION FIVE
HUNDRED SIXTY THOUSAND DOLLARS ($5,560,000.00), the issuance and
certain terms and conditions of which contingent notes are described in
SECTION 1.8 below, shall be issued to the partners of Seller in the
amounts and as indicated on SCHEDULE 1.5 hereof.
1.6 PURCHASE PRICE ALLOCATION. The Purchase Price shall be allocated
among the Assets in accordance with Section 1060 of the Internal Revenue Code of
1986, as amended, and the regulations promulgated thereunder (the "CODE"). The
allocation of the Purchase Price shall be determined as mutually agreed upon in
writing by the Purchaser and the Seller. The Seller and the Purchaser agree to
file timely all returns required under Code Section 1060 and the regulations
promulgated thereunder based on the allocations set forth on SCHEDULE 1.6 hereof
and further agree that they will not take any position inconsistent therewith on
any return or other document of any kind or in the course of any audit,
examination or other proceeding by any federal, state, local or other taxing
authority (or other governmental agency), court or tribunal.
1.7 This Section has intentionally been omitted.
1.8 THE CONTINGENT NOTE.
(a) PRINCIPAL AMOUNTS; ISSUANCE. The aggregate maximum principal
amount of the contingent notes to be issued and delivered at the Closing by the
Purchaser to the Partners as additional purchase price consideration pursuant to
SECTION 1.5(c) hereof shall be FIVE MILLION FIVE HUNDRED SIXTY THOUSAND DOLLARS
($5,560,000.00). At the Closing, the Purchaser shall deliver to the partners of
the Seller individual contingent notes ("Partner Notes") containing the terms
and conditions (other than principal amount) set forth in EXHIBIT 1.8 with the
maximum aggregate principal amounts set forth on SCHEDULE 1.5 hereof. For
purposes of this Agreement, the Partner Notes shall be referred to herein
collectively as the Contingent Note. The Contingent Note shall be due and
payable in the applicable payment amount specified in or calculated pursuant to
the Contingent Note and the Annexes to such Contingent Note (the "APPLICABLE
PAYMENT AMOUNT") corresponding to a target range of Operating Earnings or
Cumulative Operating Earnings (as defined below), as the case may be, specified
in the Contingent Note and the Annexes thereto, with respect to each of the five
twelve-month periods ending on January 31, for the years 1999 through 2003 (the
"FIVE PERIODS"), if, and only if, (i) with respect to the twelve month period
ending January 31, 1999, Operating Earnings for such period equal or exceed the
specified minimum target amount of $1,588,000 (the "YEAR-1 MINIMUM TARGET") or,
(ii) with respect to the 24 month period ending January 31, 2000, the 36 month
period ending January 31, 2001, the 48 month period ending January 31, 2002 and
the 60 month period ending January 31, 2003, Cumulative Operating Earnings for
such periods equal or exceed $3,176,000, $4,764,000, $6,352,000 and $7,940,000,
respectively (together with the Year-1 Minimum Target, as relevant to the
applicable period, the "MINIMUM TARGETS"). Payment of principal and interest,
when required to be paid hereunder, shall be made on or before March 31
following the period for which the Minimum Targets had been achieved. For each
of the Five
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Periods for which Operating Earnings or Cumulative Operating Earnings, as the
case may be, are less than the applicable Minimum Target, no principal
payment(s) shall be required, due or made under the Contingent Note, with
respect to that period, and any and all interest with respect thereto or accrued
thereon, which otherwise would have become due or payable had the applicable
Minimum Target been achieved for such period, but only with respect to such
period, shall be canceled and voided. The Applicable Payment Amount for any
payment period for which an Applicable Payment Amount is due and payable shall
be reduced by any and all amounts previously paid under or with respect to the
Contingent Note. Notwithstanding anything to the contrary herein or in the
Contingent Note, the aggregate maximum principal amount due or payable under the
Contingent Note shall not exceed $5,560,000.00.
(b) "OPERATING EARNINGS"; "CUMULATIVE OPERATING EARNINGS".
(i) DEFINITION OF "OPERATING EARNINGS". For purposes hereof
(and the Contingent Note), the term "OPERATING EARNINGS", with respect
to any year or period, shall mean the income of or attributable to the
Business for such year or period, BEFORE deduction for (in each case,
with respect to the Business) (i) interest paid in such year, (ii)
income tax payable for such year, (iii) charges for amortization of
goodwill, including without limitation any amortization of goodwill
recorded in connection with this transaction or amortization of any
payments made under the Contingent Note (but not including any
amortization with respect to an acquisition by Seller, initiated by
Seller, after the Closing Date, which acquisition positively impacts
the Operating Earnings or Cumulative Operating Earnings, as the case
may be, of Seller), (iv) any fees or expenses incurred by the Business
in connection with the transactions contemplated by this Agreement, (v)
allocations of corporate overhead of Purchaser, AmeriPath Indiana, Inc.
or AmeriPath Indianapolis, LLC that is unrelated to the operation of
the Business, and (vi) amounts payable to the Managing Director or
other administrators of AmeriPath APA (provided that such amount shall
not exceed $50,000 in the aggregate in any applicable twelve month
period). All such calculations shall be determined in accordance with
GAAP (as defined in SECTION 12.3 hereof). For purposes hereof (and the
Contingent Note), the "Business" shall include the business,
operations, contracts, assets and liabilities of Seller (as such is
constituted immediately prior to the Closing), which Business following
the Closing shall consist of the business, operations, contracts,
assets and liabilities of, and the results of operations, revenues and
expenses associated with, (A) Seller, (B) the contracts with hospitals
and medical facilities in effect from time to time, to which Seller,
prior to the Closing, and AmeriPath APA, following the Closing, is a
party, and which are serviced by the physicians who from time to time
were or are employed by Seller and/or AmeriPath APA and who report to
the medical director for AmeriPath APA (collectively, such physicians
being referred to herein as the "INDIANAPOLIS-BASED PATHOLOGISTS"), and
(C) AmeriPath APA's employment of, and employment agreements with, any
and all Indianapolis-Based Pathologists.
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(ii) CALCULATION OF OPERATING EARNINGS. A statement of the
Operating Earnings, prepared by AmeriPath senior management, will be
delivered to the holders of the Contingent Note (each a "Holder" and
collectively, the "Holders") as soon as practicable following the end
of each twelve month period, but in all events within 90 days after the
end of each such period. If the Holders wish to challenge the
calculation of Operating Earnings, they may do so by giving written
notice of such objection (the "OBJECTION NOTICE") to AmeriPath, within
30 days after receipt of such statement of Operating Earnings. The
Objection Notice shall set forth in reasonable detail the Holders'
calculation of Operating Earnings (or Cumulative Operating Earnings, as
the case may be). If an Objection Notice is so timely delivered to
AmeriPath, AmeriPath and the Holders shall use their best efforts to
resolve as soon as practicable any difference of opinion. If they are
unable to resolve such difference within 20 days after receipt by
AmeriPath of the Objection Notice from the Holders, the matter shall be
referred to the independent public accounting firm who then audits the
annual financial statements of AmeriPath (the "AUDITOR"), whose
decision shall be final and binding on all parties. If an Objection
Notice is not timely delivered to AmeriPath, and if the statement of
Operating Earnings prepared by AmeriPath senior management indicates
that the Minimum Target has been met for a given period, then the
appropriate Applicable Payment Amount of the Contingent Note with
respect to such period shall be paid within ten (10) days after the
earlier of the end of the 20 day period within which the Holders are
entitled to deliver an Objection Notice, or receipt by AmeriPath of
notice from the Holders that they accept the calculation of Operating
Earnings. If the Holders object to the calculation of Operating
Earnings for the purpose of determining compliance with this Section,
the Applicable Payment Amount of the Contingent Note for such year
shall be paid within ten (10) days after resolution of the dispute with
respect to such calculation to the extent, and solely to the extent,
that such resolution indicates that the Minimum Target has been
exceeded for such period. In the event that any dispute concerning
Operating Earnings or Cumulative Operating Earnings is submitted to the
Auditor for resolution, the non-prevailing party shall pay the
reasonable fees of the Auditor incurred in connection therewith. So
long as an Objection Notice has been delivered, the failure to timely
pay the Applicable Payment Amount in any year shall not be deemed a
breach until the time periods prescribed in this SECTION 1.8(b)(ii)
HAVE LAPSED. For purposes of this Agreement any action or right that
may be taken or enforced by the Holders at any time shall require the
written authorization of Holders entitled to receive no less than a
majority of the maximum aggregate payments payable under the Contingent
Note at such time.
(iii) CUMULATIVE OPERATING EARNINGS. For purposes hereof (and
the Contingent Note), the term "CUMULATIVE OPERATING EARNINGS" shall
mean and include, with respect to the 24 month period ending January
31, 2000, the 36 month period ending January 31, 2001, the 48 month
period ending January 31, 2002 and the 60 month period ending January
31, 2003, the Operating Earnings of the Business, on a cumulative
basis, from February 1, 1998 through the end of
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such period (E.G., the Cumulative Operating Earnings for the period
ending January 31, 2000 shall equal the Operating Earnings, on a
cumulative basis, from February 1, 1998 through January 31, 2000 (I.E.,
twenty-four full cumulative months of Operating Earnings would be
included)).
(iv) REGULATORY ADJUSTMENTS. Notwithstanding anything to the
contrary contained herein, if, in the judgment of a majority of the
full Board of Directors of AmeriPath, in their sole and absolute
discretion acting in good faith, it is determined that (A) the
inclusion of certain income, from referrals or otherwise, in the
calculation of Operating Earnings or Cumulative Operating Earnings, as
the case may be, may cause the Contingent Note, or the right to receive
payments under the Contingent Note by any Holder, to violate any
Regulation or Order of any Authority (as such terms are defined in
SECTION 12.3), or (B) any income was derived as the result of a
violation of the policies and procedures of AmeriPath adopted from time
to time by the Board of Directors of AmeriPath, then, such income shall
not be included in Operating Earnings or Cumulative Operating Earnings,
as the case may be, and shall not be taken into account in determining
the payments to be made under the Contingent Note and appropriate and
good faith adjustments shall be made to the Minimum Targets, with such
adjustments to apply to all similarly-situated pathologists at
AmeriPath; PROVIDED, HOWEVER, that the Holders shall be given prompt
notice of any such determination by the Board of Directors and shall
have an opportunity to review the basis for such determination with the
Board of Directors.
(c) EFFECT OF SALE ON CONTINGENT NOTE. Should any Person (as
defined in SECTION 12.3) acquire AmeriPath, whether by means of a merger with or
into AmeriPath in which AmeriPath does not survive or the acquisition of all or
substantially all of the stock or assets of AmeriPath (an "AMERIPATH
DISPOSITION"), then, as a condition to consummation of the AmeriPath
Disposition, the acquiring Person shall be required either to acknowledge and
guarantee AmeriPath's on-going obligations under the Contingent Note or to
assume the obligations under the Contingent Note.
(d) EFFECT OF ACQUISITIONS ON CONTINGENT NOTE. In the event that
AmeriPath acquires one or more Persons or businesses after the Closing Date (an
"AMERIPATH ACQUISITION"), Operating Earnings will be calculated without
deducting any selling, general or administrative expenses which do not relate to
Seller or the Business, and without taking into account the income generated by,
or expenses incurred in connection with, the AmeriPath Acquisition or the
acquired Person or business; provided, however, with respect to an AmeriPath
Acquisition whose income the Purchaser and the Holders have agreed to include in
the Operating Earnings or Cumulative Operating Earnings, as the case may be, of
the Business, interest, amortization and depreciation with respect to such
AmeriPath Acquisition shall be deducted from the Operating Earnings or
Cumulative Operating Earnings, as the case may be, of the Business.
(e) INTEREST. The Contingent Note shall bear interest as set
forth in the Contingent Note, computed on the basis of a 360-day year and the
actual number of days
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elapsed, on the Applicable Payment Amount thereof at the rate of seven percent
(7.0%) per annum. Simple interest shall accrue and shall be payable only upon
payment of principal, if any. In the event Operating Earnings are less than the
Minimum Target or Cumulative Operating Earnings are less than the cumulative
applicable Minimum Target for any given period, interest on the principal amount
of the Contingent Note with maturities prior to and including such date shall be
forgiven, canceled and voided.
(f) MATURITY, REDEMPTION AND PREPAYMENTS. For each period for
which Operating Earnings or Cumulative Operating Earnings, as the case may be,
equal or exceed the applicable Minimum Target, the appropriate Applicable
Payment Amount of the Contingent Note, together with interest accrued on such
Applicable Payment Amount, shall become due and payable and shall be paid as
provided in subparagraph (a) above. If, in the judgment of a majority of the
full Board of Directors of AmeriPath (which judgment is made based on the advice
of counsel), it is determined that the Contingent Note, or the holding of the
Contingent Note by any Holders, may violate any Regulation or Order of any
Authority (as such terms are defined herein), then, at AmeriPath's sole
discretion (as recommended by counsel to AmeriPath), upon written notice to the
Holders, the Contingent Note, may be canceled and voided and the parties hereto
agree to endeavor in good faith to arrive at reasonably economic and financial
substitute consideration therefor. In its sole and absolute discretion,
AmeriPath may prepay the Contingent Note by paying $556,000 for each year
remaining under the Contingent Note, such amount to be divided among the Holders
pro rata according to the maximum principal amounts of the Contingent Note.
AmeriPath shall give the Holders irrevocable written notice of any prepayment
permitted hereunder not less than three (3) business days prior to the
prepayment date, specifying such prepayment and the amount of the Contingent
Note proposed to be prepaid on such date, whereupon such principal amount of the
Contingent Note specified in such notice, together with accrued interest
thereon, shall become due and payable on the prepayment date; PROVIDED, HOWEVER,
that if the prepayment is to be made during the month of December in any year,
then the written notice shall be given not less than two (2) weeks prior to the
prepayment date. The aggregate amount of each partial prepayment shall be
allocated among each of the Holders of the Contingent Note at the time
outstanding PRO RATA in proportion to the unpaid principal amounts of the
Contingent Note held by each of such Holders.
(g) PAYMENTS. All payments of principal (including any
prepayments or redemptions), and interest under the Contingent Note shall be
made by AmeriPath in lawful money of the United States of America in immediately
available funds (or at the written request of the Holders thereof, by certified
or bank check) not later than five o'clock p.m., Eastern Standard time, on the
date each such payment is due. To the extent calculation of any payment amounts
(whether principal, interest or otherwise) results in fractions of a cent, the
amount shall be rounded down to the nearest whole cent.
(h) SUBORDINATION; SUBORDINATION AGREEMENT. The Contingent Note
shall be subordinate and junior in right of payment to certain senior
indebtedness pursuant to a subordination agreement attached hereto as EXHIBIT
7.9 (the "SUBORDINATION AGREEMENT"), by and among AmeriPath's senior lenders and
each of the holders of promissory notes of AmeriPath. As a condition to
AmeriPath's obligations under the Contingent Note, each Holder agrees
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to execute and deliver appropriate documents and agreements evidencing the
subordination of the Contingent Note to senior indebtedness of AmeriPath.
(i) NOTE NON-NEGOTIABLE. Except as otherwise provided in Section
1.8(a), the Contingent Note shall be non-transferable and non-negotiable other
than by will or the laws of intestate succession.
(j) RIGHT OF SET-OFF ON THE CONTINGENT NOTE. With respect to the
Contingent Note issued hereunder, AmeriPath shall have the right, following
prior written notice to the Holders, to set-off against principal or interest
payable to such Holders under a Contingent Note held by such Holders the amount
of any indemnification payment owed by such Holder under ARTICLE XI hereof. Such
notice shall state with reasonable specificity the good faith basis for
AmeriPath's right to such indemnification payment, and a copy of such notice
shall also be sent to each director of AmeriPath. The Holders shall have the
right to respond to such notice, and if the Holders request that the exercise of
such right of set-off be considered and approved by the Board of Directors, then
such right shall not be exercised unless considered and approved by a majority
of the full Board of Directors. If within 10 days after receipt of such notice
of set-off, the Holders against whom AmeriPath intends to assert such right of
set-off contests in writing (sent to AmeriPath) AmeriPath's claim that the
Holders are obligated to pay such amount as indemnification under ARTICLE XI
hereof, then the amount which AmeriPath would otherwise have paid to the Holders
but for the exercise of such right of set-off shall be paid into an interest
bearing escrow account maintained by a bank selected by AmeriPath, to be held in
such account until AmeriPath and the Holders have reached agreement as to the
amount, if any, of such indemnification payment and set-off, or until there has
been a judicial resolution of such matter, at which time the amount held in such
segregated account, together with any interest accrued thereon, shall be
released to the prevailing party, as appropriate and/or instructed. AmeriPath
and the Holders agree that they will use their best efforts to resolve any such
dispute within 30 days of receipt of notice by AmeriPath of the Holders'
objection to the set-off.
(k) DEFAULTS. The Holders of the Contingent Note shall be
entitled to the benefit of the Events of Default set forth in the form of
Contingent Note.
(l) CONFLICT. To the extent there is any conflict or
inconsistency between the terms of this Agreement and the terms specified in any
Contingent Note, the terms specified in the Contingent Note shall govern and
prevail.
1.9 AMERIPATH STOCK. As additional purchase price consideration, the
Purchaser shall issue to the partners of Seller, AmeriPath Stock, subject to the
conditions and restrictions set forth in this SECTION 1.9 (to be divided among
the partners of Seller as set forth on SCHEDULE 1.5 hereto). Persons to whom
such AmeriPath Stock is transferred and their permitted transfers and assigns
shall be referred to herein as "AmeriPath Stock Holders."
(a) RESTRICTIONS ON TRANSFER
(1) Except for transfers to immediate family members who
agree to be bound by the restrictions set forth in
this SECTION 1.9 (or trusts for
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the benefit of family members of each of the
AmeriPath Stock Holders, the trustees of which so
agree), for a period of one year from the Closing
Date, each of the AmeriPath Stock Holders shall not
sell, assign, exchange, transfer, distribute or
otherwise dispose of any shares of AmeriPath Stock
received hereunder. The certificates evidencing the
AmeriPath Stock delivered to each of the AmeriPath
Stock Holders, pursuant to this Agreement, shall bear
a legend substantially in the form set forth below
and containing such other information as AmeriPath
may deem necessary or appropriate:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO TRANSFER
RESTRICTIONS SET FORTH IN THAT CERTAIN ASSET PURCHASE AGREEMENT
EFFECTIVE AS OF FEBRUARY 1, 1998 BY AND AMONG THE ISSUER, ANATOMIC
PATHOLOGY ASSOCIATES, LLP AND THE PARTNERS THEREOF (THE "PURCHASE
AGREEMENT") AND MAY NOT BE SOLD, ASSIGNED, EXCHANGED, TRANSFERRED,
ENCUMBERED, PLEDGED, DISTRIBUTED, APPOINTED OR OTHERWISE DISPOSED OF,
AND THE ISSUER SHALL NOT BE REQUIRED TO GIVE EFFECT TO ANY ATTEMPTED
SALE, ASSIGNMENT, EXCHANGE, TRANSFER, ENCUMBRANCE, PLEDGE,
DISTRIBUTION, APPOINTMENT OR OTHER DISPOSITION PRIOR TO FEBRUARY 1,
1999. IN ADDITION, UNLESS SUCH SALE, ASSIGNMENT, EXCHANGE, TRANSFER,
ENCUMBRANCE, PLEDGE, DISTRIBUTION, APPOINTMENT OR OTHER DISPOSITION IS
MADE IN ACCORDANCE WITH APPLICABLE FEDERAL AND STATE SECURITIES LAWS
AND WITH THE PURCHASE AGREEMENT, THE ISSUER SHALL NOT BE REQUIRED TO
GIVE EFFECT TO ANY SUCH ATTEMPTED SALE, ASSIGNMENT, EXCHANGE, TRANSFER,
ENCUMBRANCE, PLEDGE, DISTRIBUTION, APPOINTMENT OR OTHER DISTRIBUTION.
THE ISSUER SHALL REMOVE THIS LEGEND (AND ANY STOP ORDER PLACED WITH THE
TRANSFER AGENT) WHEN THE RESTRICTIONS SET FORTH IN THE PURCHASE
AGREEMENT CEASE TO APPLY.
(2) Except for transfers to family members who agree to be bound
by the restrictions set forth in this SECTION 1.9 (or trusts
for the benefit of each of the AmeriPath Stock Holders or his
family members, the trustees of which so agree), regardless of
whether or not transfers of such shares are restricted
pursuant to the terms of subsection (1) above, during the
two-year period commencing on the Closing Date, each of the
AmeriPath Stock Holders shall not sell, assign, exchange,
transfer, distribute or otherwise dispose of, in any
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transaction or series of transactions, the greater of (i) more
than five percent (5%) of each of the AmeriPath Stock Holder's
holdings of AmeriPath Stock during any thirty (30) day period,
or (ii) more than Fifteen Thousand (15,000) shares of
AmeriPath Stock during any thirty (30) day period (each of
clause (i) and (ii) being referred to herein as a "FUTURE
SALE"), except in accordance with this SECTION 1.9. If any of
the AmeriPath Stock Holders desires to make a Future Sale,
such AmeriPath Stock Holder shall first provide written notice
thereof to AmeriPath. Promptly after receipt of such notice by
AmeriPath, AmeriPath shall designate in writing to such
AmeriPath Stock Holder the names and other pertinent
information of at least two investment banks or market makers
who actively make a market of AmeriPath's stock and through
whom the Future Sale may be made (subject to the volume
restrictions in (i) and (ii) above); PROVIDED, HOWEVER, that
the terms of such Future Sale (including commissions) shall be
competitive with what the AmeriPath Stock Holder would receive
in the absence of this SECTION 1.9 from a non-discount
brokerage firm.
(3) The AmeriPath Stock Holder shall not transfer any shares of
the AmeriPath Stock at any time if such transfer would
constitute a violation of any federal or state securities or
"blue sky" laws, rules or regulations (collectively,
"SECURITIES LAWS"), or a breach of the conditions to any
exemption from registration of the AmeriPath
Stock under any such Securities Laws, or a breach of any
undertaking or agreement of each of the AmeriPath Stock
Holders entered into with AmeriPath pursuant to such
Securities Laws or in connection with obtaining an exemption
thereunder, and AmeriPath shall not transfer upon its books
any shares of AmeriPath Stock unless prior thereto AmeriPath
shall have received an opinion, in form and substance
satisfactory to AmeriPath, of counsel, reasonably satisfactory
to AmeriPath, that such transfer is in compliance with this
SECTION 1.9 and the Securities Laws.
(4) For purposes of this Agreement (and the restrictions set forth
in this SECTION 1.9), the term "AmeriPath Stock" shall mean
and include (i) the shares of AmeriPath Stock issued, granted,
conveyed and delivered to each of the AmeriPath Stock Holders
pursuant to SECTION 1.5 hereof (the "PRIMARY SHARES"), and
(ii) any and all other or additional shares of capital stock
of AmeriPath issued or delivered by AmeriPath with respect to
the shares of AmeriPath Stock described in clause (i) hereof,
including without limitation any shares of capital stock of
AmeriPath issued or delivered with respect to such shares as a
result of any stock split,
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stock dividend, stock distribution, recapitalization or
similar transaction (the "ADDITIONAL SHARES").
(5) VESTING. Commencing January 31, 1999 and on each of the four
one-year anniversaries of such date, 20% of the shares of
AmeriPath Stock (including both the Primary Shares and any
Additional Shares issued with respect to such Primary Shares)
owned by each of the AmeriPath Stock Holders shall be free of
the restrictions set forth in SECTION 1.9, such restrictions
at such time having lapsed and no longer being applicable to
such percentage of the AmeriPath Stock, so that after five (5)
years none of the shares of AmeriPath Stock (including Primary
Shares and Additional Shares) shall be subject to the
restrictions set forth in SECTION 1.9 hereof.
(b) PERMITTED CONDITIONAL TRANSFER UPON DEATH. Notwithstanding
the provisions of this SECTION 1.9, upon an AmeriPath Stock Holder's death, the
AmeriPath Stock owned by such AmeriPath Stock Holder shall be transferable
solely pursuant to each of the AmeriPath Stock Holder's will or in accordance
with the laws of descent and distribution if, and only if, the descendants or
devisees or assignees or beneficiaries, as applicable, of the AmeriPath Stock
execute and deliver to AmeriPath an agreement, in form and substance
satisfactory to AmeriPath, evidencing their agreement to the restrictions
contained in this SECTION 1.9.
(c) LOCK-UP. Each of the AmeriPath Stock Holders agrees that, if
an underwriter requests the Purchaser, in connection with an underwritten public
offering of any of its securities, to secure and obtain a lock-up agreement,
whereby a Person agrees to refrain from selling, transferring, pledging or
otherwise conveying its securities for a certain period (the "LOCK-UP"), from
any of the Purchaser's stockholders, option holders or employees, each of the
AmeriPath Stock Holders shall execute and deliver to the Purchaser a Lock-up, in
form and substance acceptable to the Purchaser and the underwriters of such
offering, within ten (10) days of receipt a written request from the Purchaser.
(d) LEGEND(S) ON STOCK CERTIFICATES. Each of the AmeriPath Stock
Holders understands and agrees that any and all stock certificates evidencing
the AmeriPath Stock shall contain appropriate restrictive legends indicating, in
form satisfactory to AmeriPath, the restrictions to which the AmeriPath Stock is
subject, as provided under this Agreement.
(e) REPRESENTATIONS. Each of the AmeriPath Stock Holders
understands that, in connection with the issuance of the AmeriPath Stock,
AmeriPath is relying upon the representations and warranties being made by each
of the AmeriPath Stock Holders to AmeriPath in SECTION 2.26 hereof.
1.10 ADJUSTMENT TO PURCHASE PRICE. Notwithstanding the foregoing provisions
contained in this Article 1, the Purchase Price shall be adjusted based on the
"1997 EBIT". For purposes hereof, the term "1997 EBIT" shall mean the income of
or attributable to the Seller for the 1997 calendar year before deduction for
(i) interest paid in such year, (ii) income tax payable for such year, and
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(iii) charges for amortization of goodwill. All such calculations shall be
determined based on audited financial statements prepared by Xxxxxxx, Xxxxxxxxxx
& Co. in accordance with GAAP (as defined in SECTION 12.3 hereof).
(a) INCREASE IN PURCHASE PRICE. In the event that the 1997 EBIT
exceeds $2,084,250, then (I) the amounts payable under the Contingent Note shall
be increased by an amount equal to the product of (a) seven and (b) the excess
of the 1997 EBIT over $1,985,000 and (II) the Minimum Targets and other target
EBIT amounts upon which payments under the Contingent Note are determined ("EBIT
Targets") shall be restated by multiplying them by a fraction, the numerator of
which is the 1997 EBIT and the denominator of which is $1,985,000. The increase
in the aggregate amount payable under the Contingent Note shall be allocated
among the Holders pro rata based on the maximum amount payable to such Holders
under the Contingent Note at the time of such increase.
(b) DECREASE IN PURCHASE PRICE. In the event that the 1997 EBIT
is less than $1,885,750, then the Purchase Price shall be decreased by an amount
(the "Reduction Amount") equal to the product of (a) seven and (b) the excess of
$1,985,000 over the 1997 EBIT. The Purchase Price shall be reduced by the
Reduction Amount as follows: (I) the cash payable pursuant to Section 1.5(a)
hereof shall be reduced by 60% of the Reduction Amount, (II) the value of the
AmeriPath Shares to be delivered by Purchaser pursuant to Section 1.5(b) hereof
shall be reduced by 20% of the Reduction Amount and (III) the amounts payable
under the Contingent Note to be delivered pursuant to Section 1.5(c) hereof
shall be reduced by 20% of the Reduction Amount. In addition, EBIT Targets shall
be restated by multiplying them by a fraction, the numerator of which is the
1997 EBIT and the denominator of which is $1,985,000.
(c) For purposes of this Section, when payments under the
Contingent Note are increased or decreased by a given amount (the "Revision
Amount"), the amounts payable under the Contingent Note shall be calculated as
follows: the payment amounts payable under the Contingent Note if the 100%
Target EBIT is attained for each applicable year (each, the "100% Target
Payment") shall be increased (or decreased in the event there is a Purchase
Price reduction) by the Revision Amount; all other payment amounts shall be
restated by multiplying them by a fraction, the numerator of which is the
applicable 100% Target Payment plus (or minus in the event there is a the
Purchase Price is reduced) the Revision Amount and the denominator of which is
the applicable 100% Target Payment. For purposes of this Section, the 100%
Target EBIT for each year are as follows: $1,985,000 for the period ending
January 31, 1999; $3,970,000 for the period ending January 31, 2000; $5,955,000
for the period ending January 31, 2001; $7,940,000 for the period ending January
31, 2002; and $9,925,000 for the period ending January 31, 2003.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller makes the following representations and warranties to the
Purchaser, each of which shall be deemed material (and the Purchaser, in
executing, delivering and consummating
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this Agreement, has relied and will rely upon the correctness and completeness
of each of such representations and warranties notwithstanding independent
investigation, if any):
2.1 ORGANIZATION, QUALIFICATION, ETC. Seller is a limited liability
partnership duly organized and validly existing under the laws of the State of
Indiana with full power and authority to carry on its business as it is now
being conducted, and to own, operate and lease its properties and assets. Seller
is duly qualified or licensed to do business in good standing in the
jurisdictions set forth on SCHEDULE 2.1 attached hereto, those being every
jurisdiction in which the conduct of Seller's business, the ownership or lease
of its assets, properties, the proposed conduct of Seller's business, the
ownership or lease of its assets, properties, or the transactions contemplated
by this Agreement, require it to be so qualified, registered, or licensed and
the failure to be so qualified or licensed would have a Material Adverse Effect
(as defined in SECTION 12.3). True, complete and correct copies of Seller's
Amended and Restated Articles of Partnership of Anatomic Pathology Associates,
LLP ("Partnership Agreement"), as presently in effect, are attached hereto as
EXHIBIT 2.1.
2.2 SUBSIDIARIES. Except as set forth on SCHEDULE 2.2, Seller has no
Subsidiaries (as defined in SECTION 12.3) nor any investment or other interest
in, or any outstanding loan or advance to or from, any Person including any
Partner or Affiliate (as defined in SECTION 12.3).
2.3 LIABILITIES. Except as disclosed on SCHEDULE 2.3 attached hereto
and except for general claims by the Seller's creditors, the Seller has no
debts, liabilities or other obligations (whether absolute, accrued, contingent,
known, unknown or otherwise) of any kind or nature whatsoever in respect of
which any Person could lawfully claim a security interest in the Assets and/or
the leases, without regard to the foreseeability or reasonableness of such
Claim.
2.4 RECORD BOOKS. The books of Seller have been made available to the
Purchaser, are complete and correct and contain all of the proceedings of the
Partners of Seller.
2.5 AUTHORIZATION, ETC. Seller has full power and authority and each of
the Partners has full capacity to enter into this Agreement and the agreements
and documents contemplated hereby and perform their respective obligations
hereunder and thereunder. The execution, delivery and performance of this
Agreement and all other agreements and transactions contemplated hereby have
been duly authorized and no other proceedings on its part are necessary to
authorize this Agreement and the transactions contemplated hereby. Each Partner
represents that he or she is entering into this Agreement on such Partner's own
volition, free from any undue influence or coercion. Upon execution and delivery
of this Agreement by the parties hereto this Agreement and all other agreements
contemplated hereby shall constitute the legal, valid and binding obligation of
Seller and each of the Partners, enforceable against each such party in
accordance with their respective terms.
2.6 EQUIPMENT AND OTHER TANGIBLE PROPERTY. The Seller's equipment,
furniture, machinery, structures, fixtures and other tangible property included
in the Assets (the "Tangible Business Assets") are suitable for the purposes for
which intended and are in good operating condition and repair consistent with
normal industry standards, except for ordinary wear and tear, and except for
such Tangible Business Assets as shall have been taken out of service on a
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temporary basis for repairs or replacement consistent with the Seller's prior
practices and normal industry standards.
2.7 OPTIONS AND RIGHTS. There are no outstanding subscriptions,
options, warrants, rights, securities, contracts, commitments, understandings or
arrangements under which the Seller is bound or obligated to issue any
partnership or other interests in the Seller. Except as set forth in the
Partnership Agreement, there are no agreements, arrangements or understandings
between any Partner and/or the Seller and any other Person regarding the
Partner's partnership interest in the Partnership (or the transfer, disposition,
holding or voting thereof).
2.8 NO VIOLATION. The execution and delivery by Seller and each of the
Partners of this Agreement, and any and all other agreements contemplated
hereby, and the fulfillment of and compliance with the respective terms hereof
and thereof by Seller and each of the Partners do not and will not, except as
set forth on SCHEDULE 2.8 attached hereto, (a) conflict with or result in a
breach of the terms, conditions or provisions of, (b) constitute a default or
event of default under (with due notice, lapse of time or both), (c) result in
the creation of any Lien upon the partnership interests in or assets of Seller
pursuant to, (d) give any third party the right to accelerate any obligation
under, (e) result in a violation of, or (f) require any authorization, consent,
approval, exemption or other action by or notice to any court or Authority
pursuant to, the Partnership Agreement or any Regulation, Order or Contract (as
defined in SECTION 12.3) to which Seller or any Partner is subject except where
such would not have a Material Adverse Effect. Seller and each of the Partners
will comply with all applicable Regulations and Orders in connection with the
execution, delivery and performance of this Agreement and the transactions
contemplated hereby.
2.9 FINANCIAL STATEMENTS. Attached as EXHIBIT 2.9 hereto are the
following financial statements of Seller, each of which are applied on a
consistent basis: (i) audited balance sheets for the fiscal year ended December
31, 1995 and December 31, 1996 prepared on an accrual basis (the "BALANCE
SHEETS"), and (ii) audited statements of revenues and expenses and related
schedules thereto, prepared on an accrual basis, for the fiscal years ended
December 31, 1993, December 31, 1994, December 31, 1995 and December 31, 1996
(the "STATEMENTS OF REVENUES AND EXPENSES"). (collectively, together with the
Balance Sheets and the Statements of Revenues and Expenses, the "FINANCIAL
STATEMENTS"). The Balance Sheets (and the schedules thereto) fairly present in
all material respects the financial position of Seller at the respective dates
thereof, and the Statements of Revenues and Expenses (and the schedules thereto)
(x) fairly present in all material respects the results of operations for the
periods therein referred to, (except as stated therein or in the notes or
schedules thereto) applied on a consistent basis, and (y) fairly present in all
material respects the financial condition of Seller at the respective date, and
for the period covered by, such statements. Schedule 2.3 also contains an
unaudited balance sheet, statement of revenues and expenses and related
schedules thereto, prepared on a cash basis, for the nine months ended September
30, 1997 which are true and accurate in all material respects. Except as set
forth on SCHEDULE 2.3 attached hereto, Seller has no liability, whether accrued,
absolute or contingent, of a type required to be reflected on a balance sheet or
described in the notes thereto in accordance with GAAP other than (i)
liabilities which have been reflected or reserved against in the Financial
Statements, (ii) liabilities incurred since September 30, 1997 (which, if
greater
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than $500 are reflected on SCHEDULE 2.9(A) hereto) and (iii) liabilities covered
by insurance or reinsurance (a complete and detailed description of which is
provided in SCHEDULE 2.9(b)).
2.10 ACCOUNTS PAYABLE; ACCOUNTS RECEIVABLE; CUSTOMER DEPOSITS. SCHEDULE
2.10(a) sets forth a complete list of Seller's accounts payable and accrued
expense as of the Closing Date. Seller has no reason to believe that the
accounts receivable of Seller reflected on SCHEDULE 2.10(b) attached hereto on
the date hereof are not good and collectible at approximately the same
percentage rate as previously collected by Seller, based upon actual prior
experience consistent with prior practice. All such accounts receivable, to the
best of Seller's knowledge, are valid, genuine and subsisting, arise out of bona
fide sales and deliveries of goods, performance of services or other business
transactions and are not subject to defenses, set-offs or counterclaims.
2.11 EMPLOYEES. Seller has delivered to AmeriPath an accurate list
(which is set forth on SCHEDULE 2.11) showing all partners, managers and
employees of Seller, listing all employment agreements with such partners,
managers and key employees and the rate of compensation (and the portions
thereof attributable to salary, bonus and other compensation, respectively) of
each of such persons (i) as of the end of Seller's most recent fiscal year (the
"BALANCE SHEET DATE") and (ii) as of the date hereof. Seller has provided to
AmeriPath true, complete and correct copies of any employment agreements for
persons listed on SCHEDULE 2.11. Since the Balance Sheet Date, there have been
no increases in the compensation payable or any special bonuses to any partner,
employee or independent contractor, except ordinary salary increases implemented
on a basis consistent with past practices, except as set forth on SCHEDULE 2.11.
Seller has been for the past four years, and currently is, in
material compliance with all Federal, State and local Regulations and Orders
affecting employment and employment practices of Seller (including those
Regulations promulgated by the Equal Employment Opportunity Commission),
including terms and conditions of employment and wages and hours. Except as set
forth on SCHEDULE 2.11, (i) Seller is not bound by or subject to (and none of
its assets or properties is bound by or subject to) any arrangement with any
labor union, (ii) no employees of Seller are represented by any labor union or
covered by any collective bargaining agreement, (iii) no campaign to establish
such representation is in progress and (iv) there is no pending or, to the best
of Seller's knowledge, threatened labor dispute involving Seller and any group
of its employees nor has Seller experienced any labor interruptions over the
past three years. Seller believes its relationship with employees to be good.
2.12 ABSENCE OF CERTAIN CHANGES. Except as set forth on Schedule 2.12,
since January 1, 1998, there has not been (a) any Material Adverse Change (as
defined in SECTION 12.3) in the business, prospects, financial condition,
revenues, expenses, accounts receivable, accounts payable or operations of
Seller; (b) any material decrease in the cash and cash equivalents of Seller
from the amounts shown on the balance sheet for the fiscal year ended December
31, 1996 included in the Financial Statements; (c) any damage, destruction or
loss, whether covered by insurance or not, having a Material Adverse Effect,
with regard to Seller's properties and business; (d) any payment by Seller to,
or any notice to or acknowledgment by Seller of any amount due or owing to,
Seller's self-insured carrier, if any, in connection with any self-insured
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amounts or liabilities under health insurance covering employees of Seller, in
each case, in excess of a reserve therefor on the balance sheet for the fiscal
year ended December 31, 1996 included in the Financial Statements; (e) any
declaration, setting aside or payment of any distribution (whether in cash or
property) in respect of Seller's partnership interests, or any redemption or
other acquisition of such interests by Seller; (f) any increase in the rate of
compensation or in the benefits payable or to become payable by Seller to its
partners, employees or consultants; (g) any amendment, modification or
termination of any existing, or entering into any new, Contract or plan relating
to any salary, bonus, insurance, pension, health or other employee welfare or
benefit plan for or with any Partners, employees or consultants of Seller; (h)
any entry into any material Contract not in the ordinary course of business,
including without limitation relating to any borrowing or capital expenditure;
(i) any disposition by Seller of any asset other than in the ordinary course of
business consistent with prior practice; (j) any adverse change in the sales
patterns, pricing policies, accounts receivable or accounts payable relating to
Seller; or (k) any write-down of the value of any inventory having an aggregate
value in excess of $5,000, or write-off, as uncollectible, of any notes, trade
accounts or other receivables having an aggregate value in excess of $5,000; or
(l) any change by Seller in accounting methods or principles.
2.13 CONTRACTS.
(a) Except as set forth in SCHEDULE 2.13 hereto, Seller is
neither a party to nor subject to any written or oral:
(i) pension, profit sharing, bonus, retirement, stock option,
stock purchase or other plan providing for deferred or other
compensation to employees or any other employee benefit plan (other
than as set forth in SCHEDULE 2.19 hereto), or any Contract with any
labor union;
(ii) employment, consultation or other compensation Contract,
which is not terminable on notice of 30 days' or less by Seller without
penalty or other financial obligation (and, except as set forth on
SCHEDULE 2.13, no partner or employee of Seller receives total salary,
bonus and other compensation from Seller of $35,000.00 or more per
annum).
(iii) Contract containing covenants or agreements limiting the
freedom of Seller or any of its employees to compete in any line of
business presently conducted by Seller with any Person or to compete in
any such line of business in any area;
(iv) Contract with any Partner or with any affiliate or
relative of any Partner (except for any Contract disclosed in SCHEDULE
2.13 pursuant to clauses (ii) or (iii) of this SECTION 2.13(a));
(v) Contract relating to or providing for loans to Partners,
employees or Affiliates;
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(vi) Contract under which Seller has advanced or loaned, or is
obligated to advance or loan, funds to any Person;
(vii) Contract relating to the incurrence, assumption or
guarantee of any indebtedness, obligation or liability (in respect of
money or funds borrowed), or otherwise pledging, granting a security
interest in or placing a Lien on any asset of Seller;
(viii) guarantee or endorsement of any obligation;
(ix) Contract under which Seller is lessee of or holds or
operates any property, real or personal, owned by any other party,
except for any lease of real or personal property under which the
aggregate annual rental payments do not exceed $10,000.00;
(x) Contract pursuant to which Seller is lessor of or permits
any third party to hold or operate any property, real or personal,
owned or controlled by Seller;
(xi) assignment, license, indemnification or Contract with
respect to any intangible property (including, without limitation, any
Proprietary Rights (as defined in SECTION 12.3 hereto));
(xii) warranty Contract with respect to its services rendered
(or to be rendered) or its products sold or leased;
(xiii) Contract which prohibits, restricts or limits in any
way the distributions by Seller;
(xiv) Contract under which it has granted any Person any
registration rights (including piggyback rights) with respect to any
securities;
(xv) Contract for the purchase, acquisition or supply of
inventory and other property and assets, whether for resale or
otherwise in excess of $10,000.00;
(xvi) Contracts with independent agents, brokers, dealers or
distributors;
(xvii) sales, commissions, advertising or marketing Contracts;
(xviii) Contracts providing for "take or pay" or similar
unconditional purchase or payment obligations;
(xix) Contracts with Persons with which, directly or
indirectly, any Partner also has a Contract;
(xx) Contract with a hospital, physician or other health care
provider or Person pursuant to which the cost of providing health care
services to the patients
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covered by such Contract is assumed in whole or in part by Partner,
Seller or such provider; or
(xxi) any other Contract which is material to Seller's
operations or business prospects, except those which (x) were made in
the ordinary course of business, (y) are terminable on 30 days' or less
notice by Seller without penalty or other financial obligation, and (z)
in each case, involve aggregate payments by or to Seller of $10,000.00
or less.
(b) Seller has listed on SCHEDULE 2.13 all material written and
oral Contracts to which Seller is a party or by which it or any of its
properties are bound (including, but not limited to, Contracts with significant
suppliers, patients, joint venture or partnership agreements, Contracts with any
labor organizations and strategic alliances), (a) in existence as of the Balance
Sheet Date and (b) entered into since the Balance Sheet Date, and in each case
has delivered or made available true, complete and correct summaries of such
Contracts to AmeriPath.
(c) Except as set forth on SCHEDULE 2.8, no consent of any party
to any Contract is required in connection with the execution, delivery or
performance of this Agreement, or the consummation of the transactions
contemplated hereby.
(d) Seller has performed in all material respects all obligations
required to be performed by it and is not in default in any respect under or in
breach of nor in receipt of any claim of default or breach under any material
Contract listed on SCHEDULE 2.13; no event has occurred which with the passage
of time or the giving of notice or both would result in a default, breach or
event of non-compliance under any material Contract to which Seller is subject
(including without limitation all performance bonds, warranty obligations or
otherwise); Seller does not have any present expectation or intention of not
fully performing all such obligations; Seller does not have any knowledge of any
breach or anticipated breach by the other parties to any such Contract to which
it is a party.
2.14 TRUE AND COMPLETE COPIES. Copies of all Contracts and documents
delivered and to be delivered hereunder by each of the Partners or Seller are
and will be true and complete copies of such agreements, contracts and
documents.
2.15 TITLE AND RELATED MATTERS.
(a) Other than as described in SCHEDULE 2.15(a), Seller has good
and marketable title to all of the Assets free and clear of all Liens, except
(i) statutory Liens not yet delinquent, (ii) such imperfections or
irregularities of title, Liens, easements, charges or encumbrances as do not
detract from or interfere with the present use of the properties or assets
subject thereto or affected thereby, otherwise impair present business
operations at such properties or do not detract from the value of such
properties and assets, taken as a whole, (iii) as reflected in the balance
sheets included in Financial Statements or the notes thereto, or (iv) those
Liens disclosed on Schedule 2.15(a).
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(b) Except as set forth in Section 2.15(a), Seller owns, and will
on the Closing Date own, good and marketable title to all the Assets except as
to those Assets leased. All of such leases are valid and in effect, Seller is
not in default under such leases and to the knowledge of Seller, no other party
is in default under such leases. Other than as described in Schedule 2.15(a),
none of the Assets will be on the Closing Date subject to any (i) Contracts of
sale or lease, or (ii) Liens. Except for normal breakdowns and servicing
requirements, all Assets regularly used by Seller in the conduct of its business
is in good operating condition and repair, ordinary wear and tear excepted.
(c) There has not been since September 30, 1997 and will not be
prior to the Closing Date, any sale, lease, or any other disposition or
distribution by Seller of any of its assets or properties and any other assets
now or hereafter owned by it, except transactions in the ordinary and regular
course of business or as otherwise consented to by the Purchaser. After the
Closing, Purchaser, will own, or have the unrestricted right to use all Assets.
(d) SCHEDULE 2.15(d) attached hereto sets forth a description of
all material real and personal property owned or leased by Seller.
2.16 LITIGATION. Except as set forth on SCHEDULE 2.16, there is no
Claim (as defined in SECTION 12.3) pending or to the knowledge of the Seller
threatened against any of the Partners or Seller which, if adversely determined,
would have a Material Adverse Effect on Seller. Nor is there any Order
outstanding against each of the Partners or Seller having, or which, insofar as
can reasonably be foreseen, in the future may have, a Material Adverse Effect on
Seller.
2.17 TAX MATTERS.
(a) Seller has filed all federal, state, and local tax reports,
returns, information returns and other documents (collectively, the "TAX
RETURNS") required to be filed with any federal, state, local or other taxing
authorities (each a "TAXING AUTHORITY", collectively, the "TAXING AUTHORITIES")
in respect of all relevant taxes, including without limitation income, premium,
gross receipts, net proceeds, alternative or add-on minimum, ad valorem, value
added, turnover, sales, use, property, personal property (tangible and
intangible), stamp, leasing, lease, user, excise, duty, franchise, transfer,
license, withholding, payroll, employment, fuel, excess profits, occupational
and interest equalization, windfall profits, severance, and other charges
(including interest and penalties) (collectively, the "TAXES") and in accordance
with all tax sharing agreements to which each of the Partners or Seller may be a
party. All Taxes required or anticipated to be paid for all periods prior to and
including the Closing Date have been or will be paid, including any of Seller's
Taxes that may be due or claimed to be due as a result of the consummation of
the transactions contemplated by this Agreement. All Taxes which are required to
be withheld or collected by Seller have been duly withheld or collected and, to
the extent required, have been or will be paid to the proper Taxing Authority or
properly segregated or deposited as required by applicable laws. There are no
Liens for Taxes upon any property or assets of Seller except for liens for Taxes
not yet due and payable. Neither of the Partners nor Seller has executed a
waiver of the statute of limitations on the right of the Internal Revenue
Service or any other Taxing Authority to assess additional Taxes or to contest
the income or loss
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with respect to any Tax Return. The basis of any depreciable
assets, and the methods used in determining allowable depreciation (including
cost recovery), is correct and in compliance with the Code.
(b) No audit of Seller or Seller's Tax Returns by any Taxing
Authority is currently pending or threatened, and no issues have been raised by
any Taxing Authority in connection with any Tax Returns. No material issues have
been raised in any examination by any Taxing Authority with respect to Seller
which reasonably could be expected to result in a proposed deficiency for any
other period not so examined, and there are no unresolved issues or unpaid
deficiencies relating to such examinations. The items relating to the business,
properties or operations of Seller on the Tax Returns filed by or on behalf of
Seller for all taxable years (including the supporting schedules filed
therewith), available copies of which have been supplied to the Purchaser, state
accurately the information requested with respect to Seller and such information
was derived from the books and records of Seller.
(c) Seller has not made nor has become obligated to make, nor
will as a result of any event connected with the Closing become obligated to
make, any "excess parachute payment" as defined in Section 280G of the Code
(without regard to subsection (b)(4) thereof).
(d) The Partners shall cause Seller to file all Tax Returns and
reports with respect to Taxes which are required to be filed for Tax periods
ending on or before the Closing Date (a "PRE-CLOSING TAX RETURN"), and Seller
shall pay all Taxes due in respect of such Pre-closing Tax Returns to the
appropriate Taxing Authority; and Seller shall pay all costs associated with the
preparation thereof.
2.18 COMPLIANCE WITH LAW AND APPLICABLE GOVERNMENT AND OTHER
REGULATIONS. Except as set forth on SCHEDULE 2.21, the Seller is presently
complying in respect of its operations, equipment, practices, real property,
plants, laboratories, structures, and other property, and all other aspects of
its business and operations, with all applicable Regulations and Orders,
including, but not limited to, Health Care Laws (as defined in SECTION 12.3),
all Regulations relating to the safe conduct of business, environmental
protection, quality and labeling, antitrust, Taxes, consumer protection, equal
opportunity, discrimination, health, sanitation, fire, zoning, building and
occupational safety where such failure or failures would individually or in the
aggregate have a Material Adverse Effect. There are no Claims pending, nor to
the best knowledge of Seller are there any Claims threatened, nor have each of
the Partners received any written notice, regarding any violations of any
Regulations and Orders enforced by any Authority claiming jurisdiction over
Seller, including any requirement of OSHA or any pollution and environmental
control agency (including air and water).
(a) SCHEDULE 2.18(a) attached hereto sets forth all permits,
licenses, provider numbers, orders, franchises, registrations and approvals
(collectively, "PERMITS") from all Federal, state, local and foreign
governmental regulatory bodies held by Seller. Except as set forth on SCHEDULE
2.21, the Permits listed on SCHEDULE 2.18(a) are the only Permits that are
required for Seller to conduct its business as presently conducted, except for
those the absence of which would not have any Material Adverse Effect on Seller.
Each such Permit is in full force
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and effect and, to the best of the knowledge of Seller, no suspension or
cancellation of any such Permit is threatened and there is no basis for
believing that such Permit will not be renewable upon expiration.
(b) Seller has licenses to provide health care services in the
jurisdictions set forth in (or in the Permits set forth in) SCHEDULE 2.18(b)
hereto, which such licenses are all those necessary to conduct the business of
Seller in the jurisdictions in which Seller presently operates. SCHEDULE 2.18(b)
also sets forth a true and complete description of the status of each such
license. Except as set forth on SCHEDULE 2.18(b), the Seller is not aware of any
event, transaction, correspondence or circumstance which would have, or could
foreseeably have, a Material Adverse Effect on one or more of such licenses.
2.19 ERISA AND RELATED MATTERS.
(a) BENEFIT PLANS; OBLIGATIONS TO EMPLOYEES. Except as set forth
in SCHEDULE 2.19 hereto, neither Seller, nor any ERISA Affiliate of Seller, is a
party to or participates in or has any liability or contingent liability with
respect to:
(i) any "employee welfare benefit plan" or "employee pension
benefit plan" or "multi-employer plan" (as those terms are respectively
defined in Sections 3(1), 3(2) and 3(37) of the Employee Retirement
Security Act of 1974, as amended ("ERISA");
(ii) any retirement or deferred compensation plan, incentive
compensation plan, stock plan, unemployment compensation plan, vacation
pay, severance pay, bonus or benefit arrangement, insurance or
hospitalization program or any other fringe benefit arrangements for
any employee, consultant or agent, whether pursuant to contract,
arrangement, custom or informal understanding, which does not
constitute an "employee benefit plan" (as defined in Section 3(3) of
ERISA); or
(iii) any Employment Agreements not terminable on 30 days' or
less written notice, without further liability.
Any plan, arrangement or agreement required to be listed on SCHEDULE
2.19 for which any Partner or any ERISA Affiliate of any Partner may have any
liability or contingent liability is sometimes hereinafter referred to as a
"BENEFIT PLAN". For purposes of this Section, the term "ERISA AFFILIATE" shall
mean any trade or business, whether or not incorporated, that together with
Seller would be deemed a "SINGLE EMPLOYER" within the meaning of Section
4001(b)(i) of ERISA.
(b) PLAN DOCUMENTS AND REPORTS. A true and correct copy of each
of the Benefit Plans listed on SCHEDULE 2.19, and all contracts relating
thereto, or to the funding thereof, including, without limitation, all trust
agreements, insurance contracts, investment management agreements, subscription
and participation agreements and record keeping agreements, each as in effect on
the date hereof, has been supplied to the Purchaser. In the case of any Benefit
Plan that
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is not in written form, the Purchaser has been supplied with an accurate
description of such Benefit Plan as in effect on the date hereof. A true and
correct copy of the three most recent annual reports and accompanying schedules,
the three most recent actuarial reports, and the most recent summary plan
description and Internal Revenue Service determination letter with respect to
each such Benefit Plan, to the extent applicable, and a current schedule of
assets (and the fair market value thereof assuming liquidation of any asset
which is not readily tradable) held with respect to any funded Benefit Plan has
been supplied to the Purchaser by Seller, and there have been no material
changes in the financial condition in the respective Plans from that stated in
the annual reports and actuarial reports supplied.
(c) COMPLIANCE WITH LAWS; LIABILITIES. As to all Benefit Plans,
except as otherwise specified on SCHEDULE 2.19, Seller is in compliance in all
material respects with the terms of all Benefit plans and every Benefit Plan is
in compliance with all of the requirements and provisions of ERISA and all other
laws and regulations applicable thereto, including without limitation the timely
filing of all annual reports or other filings required with respect to such
Benefit Plans. None of the assets of any Benefit Plan are invested in employer
securities or employer real property, as those terms are defined in Section
407(d) of ERISA. There have been no "prohibited transactions" (as described in
Section 406 of ERISA or Section 4975 of the Code) with respect to any Benefit
Plan and neither Seller nor any ERISA Affiliate of Seller has otherwise engaged
in any prohibited transaction. There has been no "accumulated funding
deficiency" as defined in Section 302 of ERISA, nor has any reportable event as
defined in Section 4043(b) of ERISA occurred with respect to any Benefit Plan.
Actuarially adequate accruals for all obligations or contingent obligations
under the Benefit Plans are reflected in Seller's balance sheet for the fiscal
year ended December 31, 1996 included in Financial Statements provided to the
Purchaser and such obligations include a pro rata amount of the contributions
which would otherwise have been made in accordance with past practices for the
plan years which include the closing date.
2.20 INTELLECTUAL PROPERTY.
(a) Except as set forth on SCHEDULE 2.20, Seller has no trade
name, service xxxx, patent, copyright or trademark related to its business.
(b) Seller has the right to use each Proprietary Right listed in
SCHEDULE 2.20, and except as otherwise set forth therein, each of such
Proprietary Rights is, and will be on the Closing Date, free and clear of all
royalty obligations and Liens. There are no Claims pending, or to the best
knowledge of the Seller, threatened, against Seller or any of the Partners that
its use of any of the Proprietary Rights listed on SCHEDULE 2.20 infringes the
rights of any Person. Seller has no knowledge of any conflicting use of any of
such Proprietary Rights.
(c) Seller is not a party in any capacity to any franchise,
license or royalty agreement respecting any Proprietary Right and there is no
conflict with the rights of others in respect to any Proprietary Right now used
in the conduct of its business.
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(d) INTERNAL SOFTWARE APPLICATIONS.
(i) SOFTWARE APPLICATIONS The current software applications
used by Seller in the operation of its business are set forth and
described on SCHEDULE 2.20(d) hereto (the "Software"). To Seller's
knowledge after due inquiry, the Software used by Seller complies with
the necessary requirements to function efficiently after the year 2000.
(ii) OWNED SOFTWARE. To the extent any of the Software has
been has been designed or developed by Seller's management information
or development staff or by consultants on Seller's behalf, is original
and capable of copyright protection in the United States, and Seller
has complete rights to and ownership of such Software, including
possession of, or ready access to, the source code for such software in
its most recent version. No part of any such Software is an imitation
or copy of, or infringes upon, the software of any other Person or
violates or infringes upon any common law or statutory rights of any
other Person, including, without limitation, rights relating to
defamation, contractual rights, copyrights, trade secrets, and rights
of privacy or publicity. Seller has not sold, assigned, licensed,
distributed or in any other way disposed of or encumbered the Software.
(iii) LICENSED SOFTWARE. The Software, to the extent it is
licensed from any third party licensor or constitutes "off-the-shelf"
software, is held by Seller legitimately and is fully transferable to
the Purchaser without any third party consent, except as set forth on
SCHEDULE 2.8. Except as set forth on Schedule 2.2(d), all of Seller's
computer hardware has legitimately-licensed software installed therein.
2.21 ENVIRONMENTAL MATTERS. Except as disclosed in SCHEDULE 2.21: (a)
neither Seller's business nor the operation thereof violates any applicable
Environmental Law (as defined in SECTION 12.3) and no condition or occurrence
(any accident, happening or event which occurs or has occurred at any time prior
to the Closing Date, which results in or could result in a claim against Seller
or the Purchaser or creates or could create a liability or loss for Seller or
the Purchaser) which, with notice or the passage of time or both, would
constitute a violation of any Environmental Law; (b) Seller is in possession of
all Environmental Permits (as defined in SECTION 12.3) required under any
applicable Environmental Law for the conduct or operation of Seller's business
(or any part thereof), and Seller is in full compliance with all of the
requirements and limitations included in such Environmental Permits; (c) Seller
has not stored or used any pollutants, contaminants or hazardous or toxic
wastes, substances or materials on or at any property or facility now or
previously owned, leased or operated by Seller except for inventories of
chemicals which are used or to be used in the ordinary course of Seller's
business (which inventories have been sorted or used in accordance with all
applicable Environmental Permits and all Environmental Laws, including all
so-called "Right to Know" laws); (d) Seller has not received any notice from any
Authority or any private Person that Seller's business or the operation of any
of its facilities is in violation of any Environmental Law or any Environmental
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Permit or that it is responsible (or potentially responsible) for the cleanup of
any pollutants, contaminants, or hazardous or toxic wastes, substances or
materials at, on or beneath any property or facility now or previously owned,
leased or operated by Seller, or at, on or beneath any land adjacent thereto or
in connection with any waste or contamination site; (e) Seller is not the
subject of any Federal, state, local, or private Claim involving a demand for
damages or other potential liability with respect to a violation of
Environmental Laws or under any common law theories relating to operations or
the condition of any facilities or property (including underlying groundwater)
owned, leased, or operated by Seller; (f) Seller has not buried, dumped,
disposed, spilled or released any pollutants, contaminants or hazardous or
wastes, substances or materials on, beneath or adjacent to any property or
facility now or previously owned, leased or operated by Seller or any property
adjacent thereto; (g) no by-products of any manufacturing or mining process
employed in the operation of Seller's business which may constitute pollutants,
contaminants or hazardous or toxic wastes, substances or materials under any
Environmental Law are currently stored or otherwise located on any property or
facility now or previously owned, leased or operated by Seller or any property
adjacent thereto; (h) no property or facility now or previously owned, leased or
operated by Seller, is listed or proposed for listing on the National Priorities
List pursuant to CERCLA, on the CERCLIS or on any other federal or state list of
sites requiring investigation or clean-up; (i) there are no underground storage
tanks, active or abandoned, including petroleum storage tanks, on or under any
property or facility now or previously owned, leased or operated by Seller; (j)
Seller has not directly transported or directly arranged for the transportation
of any Hazardous Material to any location which is listed or proposed for
listing on the National Priorities List pursuant to CERCLA, on the CERCLIS or on
any federal or state list or which is the subject of federal, state or local
enforcement actions or other investigations which may lead to material Claims
against Seller for any remedial work, damage to natural resources or personal
injury, including Claims under CERCLA; and (k) there are no polychlorinated
biphenyls, radioactive materials or friable asbestos present at any property or
facility now or previously owned or leased by Seller. Seller has timely filed
all reports required to be filed with respect to all of its property and
facilities and has generated and maintained all required data, documentation and
records under all applicable Environmental Laws.
2.22 DEALINGS WITH AFFILIATES. SCHEDULE 2.22 hereto sets forth a
complete list, including the parties, of all oral or written agreements and
arrangements to which Seller is, will be or has been a party, at any time from
January 1, 1995 to the Closing Date, and to which any one or more Affiliates is
also a party.
2.23 BANKING ARRANGEMENTS. SCHEDULE 2.23 attached hereto sets forth the
name of each bank in or with which Seller has an account, credit line or safety
deposit box, and a brief description of each such account, credit line or safety
deposit box, including the names of all Persons currently authorized to draw
thereon or having access thereto. Seller has no liability or obligation relating
to funds or money borrowed by or loaned to Seller (whether under any credit
facility, line of credit, loan, indenture, advance, pledge or otherwise).
2.24 INSURANCE. SCHEDULE 2.24 attached hereto sets forth a list and
brief description, including dollar amounts of coverage, of all policies of
property, fire, liability, business
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interruption, workers' compensation, and other forms of insurance held by Seller
as of the date hereof, as well as a schedule of Claims filed with Seller's
current insurance carrier, including a history of such Claims and a description
and estimated dollar amount of any unresolved Claims. Such policies are valid,
outstanding and enforceable policies, as to which premiums have been paid
currently. Seller is not aware of any state of facts, or of the occurrence of
any event which might reasonably (a) form the basis for any claim against Seller
not fully covered by insurance for liability on account of any express or
implied warranty or tortious omission or commission, or (b) result in material
increase in insurance premiums of Seller.
2.25 CONSENTS. SCHEDULE 2.25 attached hereto, sets forth a complete
list of consents of governmental and other regulatory agencies or authorities,
foreign or domestic, required to be received by or on the part of Seller and
each of the Partners to enable Seller or each of the Partners to enter into and
carry out this Agreement in all material respects. Except as set forth on
SCHEDULE 2.25, all such requisite consents have been, or prior to the Closing
will have been, obtained.
2.26 INVESTMENT REPRESENTATIONS. In the event, in connection with this
Agreement or any agreement or transaction contemplated hereby, AmeriPath offers
or sells, or is deemed to offer or sell, any securities of AmeriPath to a
Partner (including AmeriPath Stock pursuant to SECTION 1.5), then each of the
Partners hereby represents and warrants to AmeriPath as follows:
(a) Each of the Partners has been offered, and up to the Closing
Date and the time(s) of issuance of the AmeriPath Stock shall be offered, the
opportunity to ask questions of, and receive answers from, AmeriPath and its
Subsidiaries, and each of the Partners have been given full and complete access
to all available information and data relating to the business and assets of
AmeriPath and its Subsidiaries, have obtained such additional information about
AmeriPath and its Subsidiaries which each of the Partners have deemed necessary
in order to evaluate the opportunities, both financial and otherwise, with
respect to AmeriPath and, except as set forth herein, have not relied on any
representation, warranty or other statement concerning the Purchaser and its
Subsidiaries in their evaluation of the decision to consummate the transactions
contemplated herein. Each Partner has read and reviewed the latest public
filings of AmeriPath, including the prospectus dated October 21, 1997, as well
as the latest filings on form 10-q and any and all press releases of AmeriPath.
On the basis of the foregoing, each of the Partners is familiar with the
operations, business plans and financial condition of AmeriPath.
(b) Each of the Partners understands that he must bear the
economic risk of the AmeriPath Stock, if and when issued to such Partner, for an
indefinite period of time because, except as provided in this Agreement, (i)
each of the Partners understands that AmeriPath proposes to issue and deliver
the shares of AmeriPath Stock issuable in accordance with this Agreement,
without compliance with the registration requirements of the Securities Act of
1933, as amended (the "SECURITIES ACT") or the Securities Act of Indiana, that
for such purpose AmeriPath will rely upon the representations, warranties,
covenants and agreements contained herein, as well as any additional
representations, warranties, covenants, agreements and certifications requested
by AmeriPath to be delivered by each of the Partners at such time(s) of issuance
or reissuance of the AmeriPath Stock; and that such noncompliance with
registration is
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not permissible unless such representations and warranties are correct and such
covenants and agreements are performed at and as of the time of issuance; (ii)
each of the Partners understands that, under existing rules of the Securities
and Exchange Commission (the "SEC"), there are substantial restrictions in the
transferability of his shares of AmeriPath Stock; his shares of AmeriPath Stock
may be transferred only if registered under the Securities Act or if an
exemption from such registration is available; Partner may not be able to avail
themselves of the provisions of Rule 144 promulgated by the SEC under the
Securities Act with respect to the transfer of such shares; (iii) the AmeriPath
Stock may not be sold, transferred, pledged, or otherwise disposed of without
the consent of AmeriPath and an opinion of counsel for or satisfactory to
AmeriPath that registration under the Securities Act or any applicable state
securities laws is not required; and (iv) AmeriPath neither has an obligation to
register a sale of the AmeriPath Stock held by any Partner nor has it agreed to
do so in the future.
(c) Except as set forth on SCHEDULE 2.26, each of the Partners is
an "accredited investor", as such term is defined in Rule 501 of Regulation D
promulgated under the Securities Act in that each of the Partners, as of the
date of this Agreement, either (a) (either individually or jointly with such
Partner's spouse) has a net worth in excess of $1,000,000; or (b) had an
individual income in excess of $200,000 in each of the two most recent years or
joint income with such Partner's spouse in excess of $300,000 in each of those
years, and reasonably expects reaching the same income level in the current
year.
(d) Each of the Partners is a sophisticated investor familiar
with the type of risks inherent in the acquisition of securities such as the
shares of AmeriPath Stock and such Partner's financial position is such that
such Partner can afford to retain his shares of AmeriPath Stock for an
indefinite period of time without realizing any direct or indirect cash return
on such Partner's investment.
(e) Each of the Partners is acquiring his shares of AmeriPath
Stock for such Partner's own account and not with a view to, or for sale in
connection with, the distribution thereof within the meaning of the Securities
Act. No Partner has any present plan, intention, commitment, binding agreement
or arrangement to dispose of any shares of AmeriPath Stock
(f) Each of the Partners understands that the certificates
evidencing his shares of AmeriPath Stock, when and if issued, will bear
appropriate restrictive legends.
2.27 INVENTORIES. All of the Seller's inventories are owned free and
clear and are not subject to any Lien, and such inventories and supplies have
been purchased by Seller in the ordinary course of business, consistent with
anticipated seasonal requirements, and the volumes of purchases thereof and
orders therefor have not been reduced or otherwise changed in anticipation of
the transactions contemplated by this Agreement.
2.28 BROKERAGE. Neither Seller nor any Partner has employed any broker,
finder, advisor, consultant or other intermediary in connection with this
Agreement or the transactions contemplated by this Agreement who is or might be
entitled to any fee, commission or other compensation from Seller or any
Partner, or from the Purchaser or its Affiliates, upon or as a
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result of the execution of this Agreement or the consummation of the
transactions contemplated hereby.
2.29 IMPROPER AND OTHER PAYMENTS. Except as set forth on SCHEDULE 2.29
hereto, (a) neither Seller, any Partner, employee thereof, nor, to Seller's
knowledge, any agent or representative of Seller nor any Person acting on behalf
of any of them, has made, paid or received any unlawful bribes, kickbacks or
other similar payments to or from any Person or Authority, (b) no contributions
have been made, directly or indirectly, to a domestic or foreign political party
or candidate, (c) no improper foreign payment (as defined in the Foreign Corrupt
Practices Act) has been made, and (d) the internal accounting controls of Seller
are believed by Seller's management to be adequate to detect any of the
foregoing under current circumstances.
2.30 PARTICIPATION IN AUDITS. Except as set forth in SCHEDULE 2.30,
Seller has not been informed of any Recoupment Claims (as hereinafter defined)
arising in connection with audits or reviews conducted by Medicaid, Medicare or
private insurance companies. To the best of the knowledge of Seller, there is no
basis for any Recoupment Claims based upon cost reports, claims or bills
submitted or to be submitted in connection with services rendered by Seller. For
purposes of this SECTION 2.30 the term "RECOUPMENT CLAIM" shall mean any
recoupment or overpayment, set-off, penalty or fine, pending or to the knowledge
of Seller threatened by any third-party payor or governmental authority having
jurisdiction over Seller for amounts arising from or related to payments to
Seller for services rendered prior to the Closing.
2.31 HEALTH CARE LAWS & REGULATIONS.
(a) FRAUD AND ABUSE. Except as set forth on SCHEDULE 2.31(a), to
the best of Seller's knowledge, Seller and its Partners, employees, contractors
and providers, have not engaged in any activities which are prohibited under
federal Medicaid statues, 42 U.S.C. Section 1320a-7a and 7b, or the regulations
promulgated pursuant to such statutes or related state or local statutes or
regulations or which are prohibited by rules of professional conduct or which
otherwise could constitute fraud, including but not limited to the following:
(i) making or causing to be made a false statement or representation of a
material fact in any application for any benefit or payment; (ii) making or
causing to be made any false statement or representation of a material fact for
use in determining rights to any benefit or payment; (iii) failing to disclose
knowledge by a claimant of the occurrence of any event affecting the initial or
continued right to any benefit or payment on its behalf or on behalf of another,
with intent to secure such benefit or payment fraudulently; and (iv) soliciting,
paying or receiving any remuneration (including any kickback, bribe, or rebate),
directly or indirectly, overtly or covertly, in cash or in kind or offering to
pay such enumeration (a) in return for referring an individual to a Person for
the furnishing or arranging for the furnishing of any item or service for which
payment may be made in whole or in part by Medicare or Medicaid, or (b) in
return for purchasing, leasing, or ordering or arranging for or recommending
purchasing, leasing, or ordering any good, facility, service, or item for which
payment may be made in whole or in part by Medicaid; subject, in the case of
(iv) to the lack of clarity in the law relating to the marketing of Medicare
risk products by brokers.
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(b) THIRD-PARTY PAYORS. All Contracts with third-party payors
were entered into by Seller in the ordinary course of business. Seller will have
made available to the Purchaser, as of the Closing Date, an accurate and
complete list of all third-party payors which have agreements with Seller (as
set forth on SCHEDULE 2.31(b)), together with accurate and complete copies of
all such Contracts. Except as set forth on SCHEDULE 2.31(b), Seller is in
compliance with each third-party payor's Contract, and Seller has properly
charged and billed in accordance with the terms of those Contracts, including,
where applicable, billing and collection of all deductibles and co-payments.
(c) COMPLIANCE WITH MEDICARE AND MEDICAID PROGRAMS. Seller has
timely and accurately filed all requisite claims and other reports required to
be filed in connection with all state and federal Medicare and Medicaid programs
in which Seller participates due on or before the Closing Date except to the
extent that the failure to file such claims and reports would not result in a
Material Adverse Effect on Seller. Except as set forth on SCHEDULE 2.31(c)
hereto, there are no Claims pending or, to Seller's knowledge, threatened or
scheduled before any Authority, including without limitation, any intermediary,
carrier, the Administrator of the Health Care Financing Administration, the
Indiana Department of Health and Rehabilitative Services, the Agency for Health
Care Administration or any other state or federal agency with respect to any
Medicare and Medicaid claim filed by Seller on or before the Closing Date, or
program compliance matters, which would have a Material Adverse Effect on
Seller, or its assets, the operations or utility thereof, or the consummation of
the transactions contemplated hereby. Seller has delivered to the Purchaser
accurate and complete copies of any Claims, actions or appeals listed on
SCHEDULE 2.31(c). Except for routinely scheduled reviews pursuant to Seller's
Medicare and Medicaid Contracts, no valid review or program integrity review
related to Seller has been conducted by any Authority in connection with the
Medicare or Medicaid programs and no such review is scheduled, or to Seller's
knowledge, pending or threatened against or affecting Seller, its business,
assets, or the consummation of the transactions contemplated hereby.
(d) RATE LIMITATIONS AND RATES. Each facility currently operated
by Seller charges rates and accordingly bills for services which are legal and
proper, and Seller's standard and Medicare rates are set forth on SCHEDULE
2.31(d). Certain reimbursement rates established by third-party payors are
subject to retrospective adjustment, which adjustments are set forth on said
SCHEDULE 2.31(d).
(e) REIMBURSEMENT DOCUMENTATION. Seller has filed when due any
and all cost reports and other documentation and reports, if any, required to be
filed by third-party payors and governmental agencies in compliance with
applicable contractual provisions and/or laws, regulations and rules.
(f) PATIENT REFERRALS. No Person having a "financial
relationship" with Seller, as that term is defined in 42 U.S.C. Section 1395nn,
is in a position, directly or indirectly, to refer patients or services to
Seller, other than referrals which comply with (or are exempt from) the
requirements of 42 U.S.C. Section 1395nn and the regulations promulgated
pursuant thereto.
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2.32 FINANCIAL CONDITION AT CLOSING. At and as of Closing, Seller
shall have a minimum of $175,000.00 in cash on hand. Other than for a breach of
this representation, there shall be no adjustments with respect hereto after the
Closing.
2.33 DISCLOSURE. Neither this Agreement nor any of the exhibits,
attachments, written statements, documents, certificates or other items prepared
for or supplied to the Purchaser by or on behalf of Seller with respect to the
transactions contemplated hereby contains any untrue statement of a material
fact or omits a material fact necessary to make each statement contained herein
or therein not misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to each of the Partners as follows:
3.1 CORPORATE ORGANIZATION, ETC. The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation with full corporate power and authority to carry
on its business as it is now being conducted and to own, operate and lease its
properties and assets. The Purchaser is duly qualified or licensed to do
business in good standing in every jurisdiction in which the conduct of its
business, the ownership or lease of its properties, or the transactions
contemplated by this Agreement, require it to be so qualified or licensed and
the failure to be so qualified or licensed would have a Material Adverse Effect
on its business.
3.2 AUTHORIZATION, ETC. The Purchaser has full corporate power and
authority to enter into this Agreement and to carry out the transactions
contemplated hereby. The Board of Directors of the Purchaser has duly authorized
the execution, delivery and performance of this Agreement, the Contingent Note
and the other agreements and transactions contemplated hereby, and no other
corporate proceedings on its part are necessary to authorize this Agreement and
the transactions contemplated hereby. Upon execution and delivery of this
Agreement by the parties hereto this Agreement shall, and upon issuance of the
Contingent Note in accordance with the provisions hereof the Contingent Note
shall, constitute legal, valid and binding obligations of the Purchaser,
enforceable against the Purchaser in accordance with their respective terms.
3.3 NO VIOLATION. The execution, delivery and performance by the
Purchaser of this Agreement, and all other agreements contemplated hereby, and
the fulfillment of and compliance with the respective terms hereof and thereof
by the Purchaser, do not and will not (a) conflict with or result in a material
breach of the terms, conditions or provisions of, (b) result in a violation of,
or (c) require any authorization, consent, approval, exemption or other action
by or notice to any Authority pursuant to, the certificate of incorporation or
by-laws of the Purchaser, or any Regulation to which the Purchaser is subject,
or any material Contract or Order to which the Purchaser or its properties are
subject. The Purchaser will comply with all applicable Regulations and Orders in
connection with its execution, delivery and performance of this Agreement and
the transactions contemplated hereby.
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3.4 GOVERNMENTAL AUTHORITIES. The Purchaser has complied in all
material respects with all applicable Regulations in connection with its
execution, delivery and performance of this Agreement and the agreements and
transactions contemplated hereby. The Purchaser is not required to submit any
notice, report, or other filing with any governmental authority in connection
with its execution or delivery of this Agreement or the consummation of the
transactions contemplated hereby. No authorization, consent, approval, exemption
or notice is required to be obtained by the Purchaser in connection with the
execution, delivery, and performance of this Agreement and the agreements and
transactions contemplated hereby.
3.5 ISSUANCE OF AMERIPATH STOCK. The AmeriPath Stock to be issued by
AmeriPath to the Partners, in accordance with the terms and subject to the
conditions set forth in this Agreement shall, upon issuance and delivery, be
duly authorized, validly issued, fully paid and non-assessable.
3.6 SUBSIDIARIES. Other than the wholly-owned subsidiaries to the
Purchaser listed in SCHEDULE 3.6 hereto, the Purchaser has no subsidiaries.
3.7 LITIGATION There is no Claim (as defined herein) pending, or to the
best knowledge of the Purchaser, threatened against the Purchaser which, if
adversely determined would have a Material Adverse Effect on Purchaser. There is
no Order outstanding against the Purchaser having, or which, insofar as can
reasonably be foreseen, in the future may have, a Material Adverse Effect on the
Purchaser.
3.8 MATERIAL ADVERSE CHANGE. There has been no Material Adverse Change
to Purchaser's financial position since end of the period reflected in the
financial statements most recently filed with the United States Securities and
Exchange Commission.
3.9 DISCLOSURE. Neither this Agreement nor any of the exhibits,
attachments, written statements, documents, certificates or other items prepared
for or supplied to the Sellers by or on behalf of the Purchaser with respect to
the transactions contemplated hereby contains any untrue statement of a material
fact or omits a material fact necessary to make each statement contained herein
or therein not misleading.
3.10 CONSENTS. There are no consents of governmental or other
regulatory agencies or authorities, foreign or domestic, required to be received
by or on the part of the Purchaser to enable the Purchaser to enter into and
carry out this Agreement in all material respects.
3.11 SENIOR CREDIT FACILITY. The Purchaser is not currently in default,
and will not be in default upon the consummation of this Agreement, under the
terms of the Amended and Restated Credit Agreement, originally dated May 29,
1996 and amended and restated June 27, 1997, among the Purchaser, its
subsidiaries, BankBoston, N.A., as agent, and the lenders named therein.
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ARTICLE IV
COVENANTS OF SELLER AND THE PARTNERS
From the date hereof until the Closing, except as otherwise consented
to or approved by the Purchaser in writing, Seller covenants and agrees that it
shall act, and each of the Partners shall cause Seller so to act or refrain from
acting where required hereinafter, to comply with the following:
4.1 REGULAR COURSE OF BUSINESS. Seller shall operate its business
diligently and in good faith and in the ordinary and usual course, consistent
with past management practices; shall maintain all of its respective properties
in good order and condition, shall maintain (except for expiration due to lapse
of time) all leases and Contracts in effect without change except as expressly
provided herein; shall comply in all material respects with the provisions of
all Regulations and Orders applicable to Seller and the conduct of its business;
shall not cancel, release, waive or compromise any debt, Claim or right in its
favor; shall not alter the rate or basis of compensation of any of its Partners,
employees or consultants; shall maintain insurance and reinsurance coverage as
in effect on the date hereof up to the Closing Date; and shall preserve the
business of Seller intact, and use its best efforts to keep available for Seller
and the Purchaser the services of the employees and consultants of Seller, and
to preserve the good will of clients, patients, suppliers and others having
business relations with Seller.
4.2 AMENDMENTS. Seller shall not merge with or into or consolidate with
any other corporation or Person, acquire substantially all of the assets of any
Person or change the character of its business.
4.3 CAPITAL CHANGES; PLEDGES. Except as contemplated under this
Agreement, Seller shall not issue or sell any options, warrants or other
instruments providing rights to purchase or otherwise acquire any interest in
the Seller and Seller shall not pledge or otherwise encumber Assets.
4.4 DISTRIBUTIONS. Seller shall not declare, pay or set aside for
payment any distribution in respect of its partnership interests other than a
distribution of cash that does not result in a violation of SECTION 4.6 hereof ,
nor shall Seller, directly or indirectly, redeem, purchase or otherwise acquire
any partnership interests.
4.5 CAPITAL AND OTHER EXPENDITURES. Seller shall not make any capital
expenditures, or commitments with respect thereto.
4.6 CASH AND CASH EQUIVALENTS. Cash and cash equivalents shall be
preserved, and expended, solely in the ordinary and usual course of business. In
addition, the Assets shall include no less than $175,000 in cash.
4.7 BORROWING. Seller shall not incur, assume or guarantee any
indebtedness, obligations or liabilities not reflected on the Financial
Statements (or the balance sheets included therein) except in the ordinary
course of business or for purposes of consummation of the
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transactions contemplated by this Agreement and in any case only after
consultation with the Purchaser.
4.8 OTHER COMMITMENTS. Except as set forth in this Agreement, incurred
or transacted in the ordinary course of business, or permitted in writing by the
Purchaser, Seller shall not enter into any transaction or make any commitment or
incur any obligation (including entering into any real property leases).
4.9 FULFILLMENT OF CONDITIONS PRECEDENT. Seller and each of the
Partners shall use their best efforts to obtain at their expense, on or prior to
the Closing Date, all such waivers, Permits, consents, approvals or other
authorizations from third parties and Authorities, and to do all things as may
be necessary or desirable in connection with the transactions contemplated by
this Agreement in order to fully and expeditiously consummate the transactions
contemplated by this Agreement.
4.10 INTERIM FINANCIAL INFORMATION. To the extent prepared in the
ordinary course of business, Seller shall supply the Purchaser with unaudited
financial statements (including, without limitation, balance sheets and
statements of revenues and expenses) and information for each calendar month,
promptly following the conclusion of such month, and as Seller may otherwise
reasonably request.
4.11 FULL ACCESS AND DISCLOSURE.
(a) Seller shall afford to the Purchaser and its counsel,
accountants and other authorized representatives reasonable access during
business hours to Seller's facilities, properties, books and records in order
that the Purchaser may have full opportunity to make such reasonable
investigations as it shall desire to make of the affairs of Seller; including
financial audits, and each of the Partners shall cause Seller's employees and
auditors to furnish, on a timely basis, such additional financial and operating
data and other information as the Purchaser shall from time to time reasonably
request including, without limitation, any internal control recommendations
applicable to Seller made by Seller's independent auditors in connection with
any examination of Seller's Financial Statements and books and records.
(b) From time to time prior to the Closing Date, Seller shall
promptly supplement or amend information previously delivered to the Purchaser
with respect to any matter hereafter arising which, if existing or occurring at
the date of this Agreement, would have been required to be set forth herein or
disclosed.
(c) In connection with any "due diligence" examination performed
by the Purchaser with respect to the business of Seller, each of the Partners
shall fully cooperate and the results of such "due diligence" examination shall
be satisfactory to the Purchaser.
4.12 CONFIDENTIALITY. Each of the Partners and Seller shall, and shall
cause its employees and other personnel and authorized representatives to, hold
in confidence, and not disclose to any other party without the Purchaser's prior
consent, all written and oral information furnished or disclosed by or received
from the Purchaser or its Partners, employees, agents,
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counsel and auditors in connection with the transactions contemplated hereby
except as may be required by applicable law or as otherwise contemplated herein.
The Partners and the Seller hereby acknowledge that they are aware, and that
they will advise such employees and representatives who are informed of the
matters which are the subject of this letter, that the United States securities
laws prohibit any Person who has received from an issuer material, non-public
information of the type which is the subject of this Agreement from purchasing
or selling securities of such issuer or from communicating such information to
any other Person under circumstances in which it is reasonably foreseeable that
such Person will purchase or sell such securities. In addition, without the
prior written consent of AmeriPath, the Seller and the Partners will not, and
will direct such employees and representatives not to, disclose to any Person
either the fact that this Agreement has been entered into or that information
has been provided under this Agreement or that discussions or negotiations are
taking or have taken place concerning a possible transaction between the Seller,
the Partners and AmeriPath, or any of the terms, conditions or other facts with
respect to any such discussions or possible transaction, including the status
thereof.
4.13 BREACH OF AGREEMENT. Neither any Partner nor Seller shall take any
action which, if taken on or prior to the Closing Date, would constitute a
breach of this Agreement.
ARTICLE V
COVENANTS OF THE PURCHASER
The Purchaser hereby covenants and agrees with Seller and each of the
Partners that prior to the Closing or the termination of this Agreement:
5.1 CONFIDENTIALITY. The Purchaser shall, and shall cause its
principals, officers and other personnel and authorized representatives to, hold
in confidence, and not disclose to any other party without the Partners' prior
consent, all information received by it from each of the Partners or Seller's
employees, agents, counsel and auditors in connection with the transactions
contemplated hereby except as may be required by applicable law or as otherwise
contemplated herein.
5.2 FULL ACCESS AND DISCLOSURE.
(a) The Purchaser shall afford to Seller and each of the
Partners, and their counsel, accountants and other authorized representatives
reasonable access during business hours to the Purchaser's facilities,
properties, books and records in order that each of the Partners may have full
opportunity to make such reasonable investigations as they shall desire to make
of the business of the Purchaser; and the Purchaser shall cause its officers,
employees and auditors to furnish such additional financial and operating data
and other information as each of the Partners shall from time to time reasonably
request including, without limitation, any internal control recommendations
applicable to the Purchaser made by the Purchaser's independent auditors in
connection with any examination of the Purchaser's financial statements and
books and records.
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(b) From time to time prior to the Closing Date, the
Purchaser shall promptly supplement or amend information previously delivered to
Seller and/or each of the Partners with respect to any matter hereafter arising
which, if existing or occurring at the date of this Agreement, would have been
required to be set forth herein or disclosed.
(c) The Purchaser shall fully cooperate in connection with any
"due diligence" examination performed by the Seller or the Partners with respect
to the business of the Purchaser. For purposes of this SECTION 5.2, "Purchaser"
shall mean and include AmeriPath and its Subsidiaries.
ARTICLE VI
OTHER AGREEMENTS
The parties hereto further agree as follows:
6.1 FURTHER ASSURANCES. Subject to the terms and conditions of this
Agreement, each of the parties hereto shall use its best efforts to take, or
cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable Regulations or otherwise to
consummate and make effective the transactions contemplated by this Agreement.
In furtherance and not in limitation of the preceding sentence, the parties
hereto shall use their best efforts to cause the Closing to take place on or
before March 1, 1998. If at any time after the Closing Date the Purchaser shall
consider or be advised that any further deeds, assignments or assurances in law
or in any other things are necessary, desirable or proper to vest, perfect or
confirm, of record or otherwise, in the Purchaser (or Seller, as appropriate),
the title to any property or rights of Seller acquired or to be acquired by
reason of, or as a result of, the acquisition, each of the Partners agree that
each of the Partners shall execute and deliver all such proper deeds,
assignments and assurances in law and do all things necessary, desirable or
proper to vest, perfect or confirm title to such property or rights in Seller
and otherwise to carry out the purpose of this Agreement.
6.2 AGREEMENT TO DEFEND. In the event any action, suit, proceeding or
investigation of the nature specified in SECTIONS 7.2 or 8.2 is commenced,
whether before or after the Closing Date, all the parties hereto agree to
cooperate and use their best efforts to defend against and respond thereto.
6.3 CONSENTS. Without limiting the generality of SECTION 6.1, each of
the parties hereto shall use their best efforts to obtain all permits,
authorizations, consents and approvals of all Persons and governmental
authorities necessary, proper or advisable in connection with the consummation
of the transactions contemplated by this Agreement prior to the Closing Date.
With respect to every material Contract of Seller, for which a consent or
approval is not required under the terms of such Contract, upon the execution
and delivery of this Agreement, each party to each such Contract shall, after
consultation with and coordination by AmeriPath, be advised of the transaction
contemplated hereby.
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6.4 NO SOLICITATION OR NEGOTIATION. Unless and until this Agreement is
terminated, neither each of the Partners nor Seller through its employees,
representatives, agents, advisors, accountants and attorneys shall initiate,
solicit or encourage, directly or indirectly, any inquiries or the making of any
proposal with respect to, or engage in negotiations concerning, or provide any
confidential information or data to any Person with respect to, or have any
discussions with any Persons relating to, any acquisition, business combination
or purchase of all or any significant asset of, or any equity interest in,
Seller, or otherwise facilitate any effort or attempt to do or seek any of the
foregoing, and shall immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any of the foregoing. Should Seller or any Partner be contacted
with respect to any offer, inquiry or proposal, Seller and each of the Partners
shall immediately advise the Purchaser in writing of the name, address and phone
number of the contact and the nature of the inquiry.
6.5 NO TERMINATION OF PARTNER'S OBLIGATIONS BY SUBSEQUENT INCAPACITY,
ETC. Each of the Partners specifically agree that the obligations of such
Partner hereunder, including, without limitation, obligations pursuant to
ARTICLE XI, if any, and SECTION 6.4 shall not be terminated by the death or
incapacity of any Partner.
6.6 EMPLOYMENT AGREEMENTS. Seller and each of the persons set forth on
SCHEDULE 6.6 hereof shall, at or prior to the Closing, terminate any existing
employment or independent contractor agreements between Seller and such
individual and shall enter into an Employment Agreement with AmeriPath APA in
the form of EXHIBIT 6.6, attached hereto (the "EMPLOYMENT AGREEMENTS").
6.7 PUBLIC ANNOUNCEMENTS. Neither any Partner nor Seller nor any
Affiliate, representative, employee, or Partner of any of such Persons, shall
disclose any of the terms of this Agreement to any third party (other than the
Purchaser's advisors and senior lending group and the Partners' advisors)
without the other party's prior written consent unless required by any
applicable law. The form, content and timing of any and all press releases,
public announcements or publicity statements (except for any disclosures under
or pursuant to Federal or State securities laws in connection with the
registration of AmeriPath's securities or otherwise) with respect to this
Agreement or the transactions contemplated hereby shall be subject to the prior
approval of the Purchaser. No press releases, public announcements or publicity
statements shall be released by either party without such prior mutual
agreement.
6.8 DELIVERIES AFTER CLOSING. From time to time after the Closing, at
the Purchaser's request and without expense to Seller and without further
consideration from the Purchaser or Seller, each of the Partners shall execute
and deliver such other instruments of conveyance and transfer and take such
other action as the Purchaser reasonably may require to convey, transfer to and
vest in the Purchaser, and to put the Purchaser in possession of, any rights or
property to be sold, conveyed, transferred or delivered hereunder, including
transferring any Assets subsequently delivered or paid to Seller, any revenues
generated or otherwise earned by AmeriPath APA but delivered to Seller and any
amounts generated pursuant to that certain Pathology Services Agreement, dated
as of January 11, 1995 between Seller and Corning Clinical Laboratories, Inc.
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6.9 NON-COMPETITION COVENANT.
(a) As a material and valuable inducement for the Purchaser to
enter into this Agreement, pay and deliver the Purchase Price consideration and
consummate the transactions provided for herein, during the "RESTRICTED PERIOD"
(as hereinafter defined), each of the Partners agree, unless otherwise permitted
by AmeriPath in writing, that he or she shall not, directly or indirectly, for
himself or herself or on behalf of or in conjunction with any other person,
persons, company, partnership, corporation or business of whatever nature:
(i) engage in the practice of pathology or engage in any
business or perform any service in competition with the business of
AmeriPath APA or its successors or assigns within the Restricted
Territory, or have any interest (other than a 2% or less beneficial or
voting interest in a publicly held company) in any enterprise that
shall engage in such activities within the Restricted Territory. For
purposes of this Agreement, the "RESTRICTED TERRITORY" shall mean any
location within 50 miles of 0000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxx 00000; or
(ii) from any facility or location, whether within or without
the Restricted Territory, knowingly (x) perform pathology services for
any, patient, laboratory, medical facility or health care provider
located in the Restricted Territory or (y) solicit, directly or
indirectly, any patient, laboratory or health care provider located
within the Restricted Territory who was or is a customer, client or
patient of AmeriPath APA or who is a prospective customer, client or
patient of AmeriPath APA, except that it shall not be a violation of
this SECTION 6.9 for each of the Partners to perform pathology services
in the Restricted Territory during the Restricted Period (a) as an
employee of a local, federal or state government or agency; (b) in
performing such Partner's duties as a member of the United States
military services or the National Guard; or (c) on a locum tenens
basis. For purposes of this Agreement a prospective customer, client or
patient of AmeriPath APA at any time is a person with whom AmeriPath
APA has had two or more substantive discussions within the three months
preceding such time.
(b) As used in this Agreement, the term "RESTRICTED PERIOD" shall
mean and include a period of five (5) years, from the Closing to the fifth (5th)
anniversary of the Closing.
(c) Partners further agree that during the Restricted Period,
Partners will not, directly or indirectly, (a) solicit the employment of any
employee, agent or consultant of AmeriPath or its affiliates (each an "AmeriPath
Entity") or any person who was an employee, agent or consultant of any AmeriPath
Entity during the Restricted Period, or (b) induce any employee of an AmeriPath
Entity to leave the employ of any such AmeriPath Entity, unless in each case the
Partner obtains the prior written consent of AmeriPath.
(d) In recognition of the substantial nature of such potential
damages and the difficulty of measuring economic losses to AmeriPath as a result
of a breach of the foregoing covenants, and because of the immediate and
irreparable damage that could be caused to AmeriPath for which it would have no
other adequate remedy, Partners agree that in the event of
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breach by such Partner of the foregoing covenant, AmeriPath shall be entitled to
specific performance of this provision and co-injunctive and other equitable
relief, and that such Partner will be responsible for the payment of court costs
and reasonable attorneys' fees incurred by AmeriPath in seeking enforcement of
the covenants set forth in this SECTION 6.9.
(e) Partners covenant and agree that the restrictions set forth
in this SECTION 6.9 are fair, reasonable and necessary to protect the interests
of AmeriPath and its Affiliates, such restrictions were negotiated and bargained
for and the consideration delivered in connection with this Agreement reflects
and assumes Partners' strict compliance with, and the enforceability by the
Purchaser of, these restrictions.
(f) Partners acknowledge and agree that the provisions of SECTION
6.9 and SECTION 6.10 are material and of the essence to this Agreement. In
addition, if the scope of any restriction or covenant contained in either such
Section should be or become too broad or extensive to permit enforcement thereof
to its fullest extent, then such restriction or covenant shall be enforced to
the maximum extent permitted by law, and each of the Partners hereby consents
and agrees that (a) it is the parties intention and agreement that the covenants
and restrictions contained herein be enforced as written, and (b) in the event a
court of competent jurisdiction should determine that any restriction or
covenant contained herein is too broad or extensive to permit enforcement
thereof to its fullest extent, the scope of any such restriction or covenant may
be modified accordingly in any judicial proceeding brought to enforce such
restriction or covenant, but should be modified to permit enforcement of the
restrictions and covenants contained herein to the maximum extent the court, in
its judgment, will permit.
(g) Notwithstanding the foregoing provisions of this Section 6.9,
the Partners shall be entitled to render services for and on behalf of Seller
solely for the purpose of fulfilling Seller's obligations under a certain
Pathology Services Agreement between Seller and Corning Clinical Laboratories,
Inc., dated as of January 11, 1995.
6.10 NON-DISCLOSURE; CONFIDENTIALITY.
(a) CONFIDENTIAL INFORMATION. By virtue of Partners' employment,
association or involvement with an AmeriPath Entity, Partners may obtain
confidential or proprietary information developed, or to be developed, by an
AmeriPath Entity. "Confidential Information" means all proprietary or business
sensitive information, whether in oral, written, graphic, machine-readable or
tangible form, and whether or not registered, and including all notes, plans,
records, documents and other evidence thereof, including but not limited to all:
patents, patent applications, copyrights, trademarks, trade names, service
marks, service names, "know-how," patient lists, details of client or consulting
contracts, pricing policies, operational methods, marketing plans or strategies,
product development techniques or plans, procurement and sales activities,
promotion and pricing techniques, credit and financial data concerning
customers, business acquisition plans or any portion or phase of any scientific
or technical information, discoveries, computer software or programs used or
developed in whole or in part by any AmeriPath Entity (including source or
object codes), processes, procedures, formulas or improvements of any AmeriPath
Entity; algorithms; computer processing systems and
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techniques; price lists; customer lists; procedures; improvements, concepts and
ideas; business plans and proposals; technical plans and proposals; research and
development; budgets and projections; technical memoranda, research reports,
designs and specifications; new product and service developments; comparative
analyses of competitive products, services and operating procedures; and other
information, data and documents now existing or later acquired by an AmeriPath
Entity, regardless of whether any of such information, data or documents qualify
as a "trade secret" under applicable Federal or State law. "Confidential
Information" shall not include (a) any information which is in the public domain
during the period of service by each of the Partners or becomes public
thereafter, provided such information is not in the public domain as a
consequence of disclosure by Partners in violation of this Agreement, and (b)
any information not considered confidential information by similar enterprises
operating in the clinical or anatomical laboratory industry or otherwise in the
ordinary course.
(b) NON-DISCLOSURE. Partners agree that, except as directed by
such Partner's AmeriPath Entity employer, as required or otherwise contemplated
under this Agreement or such Partner's Employment Agreement or as otherwise
required by law, he will not at any time (during the term of such Partner's
employment by an AmeriPath Entity or at any time thereafter), except as may be
expressly authorized by the AmeriPath Entity in writing, disclose to any Person
or use any Confidential Information whatsoever for any purpose whatsoever, or
permit any Person whatsoever to examine and/or make copies of any reports or any
documents or software (whether in written form or stored on magnetic, optical or
other mass storage media) prepared by him or that come into his possession or
under his control by reason of his employment by an AmeriPath Entity or by
reason of any consulting or software development services he has performed or
may in the future perform for an AmeriPath Entity which contain or are derived
from Confidential Information. Partners further agree that while employed at an
AmeriPath Entity, no Confidential Information shall be removed from the
AmeriPath Entity's business premises, without the prior written consent of such
AmeriPath Entity.
(c) AMERIPATH GROUP PROPERTY. As used in this Agreement, the term
"AMERIPATH GROUP PROPERTY" means all documents, papers, computer printouts and
disks, records, customer or patient lists, files, manuals, supplies, computer
hardware and software, equipment, inventory and other materials that have been
created, used or obtained by any AmeriPath Entity, or otherwise belonging to any
AmeriPath Entity, as well as any other materials containing Confidential
Information as defined above. Partners recognize and agree that:
(i) All the AmeriPath Group Property shall be and remain the
property of the AmeriPath Entity to which such belongs;
(ii) Partners will preserve, use and hold the AmeriPath Group
Property only for the benefit of AmeriPath and its Affiliates and to
carry out the business of the AmeriPath Entity, AmeriPath and its
Affiliates; and
(iii) When any Partner's employment is terminated, such
Partner will immediately deliver and surrender to the AmeriPath Entity
all the AmeriPath
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Group Property, including all copies, extracts or any other types of
reproductions, which such Partner has in his possession or control.
6.11 RULE 144 BEST EFFORTS. While AmeriPath is a public company with
its securities registered under the Securities Act and listed or quoted for
trading by a national securities exchange or inter-dealer quotation system,
AmeriPath will use its best efforts to see that AmeriPath is in compliance with
the requirements of Rule 144 under the Securities Act applicable to the issuer
of securities, so as to facilitate non-registered sales of AmeriPath Stock by
AmeriPath Stock Holders who then own AmeriPath Stock consistent with the
requirements and limitations of Rule 144. Nothing in this SECTION 6.11 shall be
deemed as either (i) any representation or warranty that AmeriPath will remain a
public company with securities registered under the Securities Act, or (ii) any
covenant or agreement by AmeriPath to register, under federal or state
securities laws or otherwise, any AmeriPath securities issued to, or held by,
each of the Partners.
6.12 STRUCTURAL CHANGES . The parties hereto intend that the form and
substance of this Agreement and the transactions contemplated hereby comply
with, and not be inconsistent with, federal and Indiana Health Care Laws.
Accordingly, notwithstanding any other term or provision of this Agreement in
the event that AmeriPath, upon the advice of counsel, determines at any time
following the Closing that the transactions contemplated by this Agreement do
not comply with, or are inconsistent with, federal or Indiana Health Care Laws,
then the Partners hereby irrevocably agree, upon AmeriPath's request and at
AmeriPath's sole cost and expense, to take, or cause to be taken, all action,
and to do, or cause to be done, all things necessary, proper and advisable in
AmeriPath's reasonable judgment and at AmeriPath's request to restructure the
agreements and transactions contemplated by this Agreement (the "RESTRUCTURING")
so that such agreements and transactions will be in compliance with, and/or not
inconsistent with, federal and Indiana Health Care Laws, while preserving, to
the maximum extent practicable, the economic and business substance of such
agreements and transactions. In furtherance and not in limitation of the
preceding sentence, the Partners specifically agree that any such Restructuring
at AmeriPath's request may include (i) the organization by the Partners of a
professional corporation, partnership, grantor trust or similar entity owned by
such Partners (the "ENTITY"), the organization and form of which Entity shall be
satisfactory in all respects to AmeriPath, (ii) the assignment to such Entity of
(a) AmeriPath APA's obligations under all Employment Agreements (the performance
of which obligations shall be guaranteed by AmeriPath) and (b) all contracts
under which AmeriPath APA was required to provide or deliver professional
pathology services, (iii) the execution and delivery by the Entity of a
Management Agreement with AmeriPath Indiana, which Management Agreement shall be
in form and substance satisfactory to AmeriPath, pursuant to which AmeriPath
Indiana will provide certain management and other services to the Entity in
consideration of management fees and the reimbursement of expenses, and (iv) the
execution and delivery by each Partner of a buy/sell agreement with AmeriPath,
in form and substance satisfactory to AmeriPath Indiana, pursuant to which
AmeriPath Indiana may, at its option, cause each Partner to transfer his or her
ownership interest or trusteeship in the Entity to a person designated by
AmeriPath Indiana and qualified to own and hold such interest or trusteeship.
Purchaser shall provide the Partners with prior written notice of any
Restructuring
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and an opportunity to consult with AmeriPath prior to such Restructuring with
respect to the form of such Restructuring.
6.13 BENEFIT COVERAGE. Purchaser shall provide Xxxxx X. Xxxxxxxxx, M.D.
and F. Xxxxxx XxXxxxxx Xx., M.D. (the "Covered Physicians") and their dependents
who are covered under Seller's group health plan on the Closing Date with group
health care coverage ("Coverage") that is comparable to the coverage generally
available to physicians affiliated with AmeriPath and their dependents. The term
of the Coverage shall commence effective as of the Closing Date and shall
continue for a period of thirty (30) months. In addition, the Covered Physicians
shall be responsible for reimbursing the Purchaser for the pro rata portion of
the costs associated with providing the Covered Physicians and their dependents
with the Coverage, as determined in good faith by Purchaser.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER
Each and every obligation of the Purchaser under this Agreement shall
be subject to the satisfaction, on or before the Closing Date, of each of the
following conditions, unless waived in writing by the Purchaser:
7.1 REPRESENTATIONS AND WARRANTIES; COVENANTS AND AGREEMENTS. The
representations and warranties of Seller contained in ARTICLE II and elsewhere
in this Agreement and all information contained in any exhibit, certificate,
schedule or attachment hereto or in any writing delivered by, or on behalf of,
Partners or Seller to the Purchaser, shall be true and correct when made and
shall be true and correct in all material respects on the Closing Date as though
then made, except as expressly provided herein. Partners and Seller shall have
performed and complied with all agreements, covenants and conditions and shall
have made all deliveries required by this Agreement to be performed, delivered
and complied with by them prior to the Closing Date. Each of the Partners shall
have executed and delivered to the Purchaser a certificate, dated the Closing
Date, certifying to the foregoing.
7.2 NO INJUNCTION. No preliminary or permanent injunction or other
Order, decree or ruling issued by any Authority, or any Regulation promulgated
or enacted by any Authority shall be in effect, which would prevent the
consummation of the transactions contemplated hereby.
7.3 THIRD PARTY CONSENTS. The Purchaser, Partners and Seller shall have
obtained all consents, approvals, waivers or other authorizations with respect
to the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby, such that the Contracts
and leases described in SECTION 1.1 hereto shall remain in effect (without
default, acceleration, termination, assignment, right of termination or
assignment, payment, increase in rates or compensation payable, penalty,
interest or other adverse effect) from and after the Closing Date as such
Contracts and leases operated and were in effect before the Closing Date. With
respect to the material Contracts of Seller for which notice of the transaction
had been, or should have been, delivered to the other party thereto pursuant to
SECTION 6.3 hereof; (a) all such parties to such Contracts shall have been
notified of the transactions contemplated
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hereby and (b) neither the Purchaser nor any Partner or Seller shall have
received any notice of terminations or amendments of, or any indication from
such party of their intent to terminate or amend, such Contract, unless such
amendment shall not adversely affect the Purchaser or any Partner.
7.4 REGULATORY APPROVALS. The Federal and State regulatory agencies or
authorities listed in SCHEDULE 7.4 hereto shall have approved the applications
listed in such Schedule with respect to the change of control represented by the
transactions contemplated by this Agreement, and such approval shall not impose
financial obligations on the Purchaser that are objectionable to it.
7.5 NO MATERIAL ADVERSE CHANGE. There shall have been no Material
Adverse Change since the date of this Agreement. The Purchaser shall have
received a certificate (which shall be addressed to the Purchaser), dated the
Closing Date, of the Partners, certifying to the foregoing.
7.6 OPINION OF PARTNERS' COUNSEL. The Purchaser shall have received an
opinion of counsel to the Partners and Seller (which will be addressed to the
Purchaser and the Purchaser's senior lender), dated the Closing Date, in the
form of EXHIBIT 7.6 hereto.
7.7 EMPLOYMENT AGREEMENTS. Each of the persons set forth on SCHEDULE
6.6 hereto shall have terminated their existing employment or independent
contractor agreements with Seller and each shall have executed and delivered to
the Purchaser an Employment Agreement with AmeriPath APA in the form of EXHIBITS
6.6 attached hereto.
7.8 XXXX OF SALE. The Seller shall have executed and delivered to the
Purchaser the Bills of Sale in the form attached hereto as EXHIBIT 1.3.
7.9 SUBORDINATION AGREEMENT At the Closing, Seller and each of the
Partners shall have executed and delivered the Subordination Agreement, in the
form attached hereto as EXHIBIT 7.9.
7.10 CREDITOR CONSENTS. The creditors set forth on SCHEDULE 7.10 hereto
shall have agreed in writing with Seller as to the amounts owed in order for
such creditors to have been paid in full and to release all Liens in favor of
such creditors. Seller shall have obtained from the creditors set forth on
SCHEDULE 7.10 and shall provide to the Purchaser at Closing, such UCC
termination statements, releases of mortgages and other releases of Liens as
shall be required by the Purchaser and its lenders.
7.11 TAX CLEARANCE CERTIFICATES. The Seller shall have delivered to the
Purchaser Tax Clearance Certificates or other written evidence from all
applicable governmental authorities in each of the states where the Seller's
business is conducted that the sales and use taxes payable on or before the date
of such inquiry have been paid in full.
7.12 LEASE. The Purchaser shall have entered into a lease agreement
substantially in the form attached hereto as Exhibit 7.12 relating to the lease
of the premises located at 0000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000.
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7.13 AMENDMENT TO TRUST AGREEMENT. That certain Trust Agreement, dated
August 29, 1997, between AmeriPath and Xxxxxxx Xxxxxxx, M.D. (the "Trust
Agreement") shall have been duly amended pursuant to an amendment substantially
in the form of Exhibit 7.13 hereof.
7.14 ASSIGNMENT AND ASSUMPTION. Seller shall have executed and
delivered Assignment and Assumption Agreements in the form of EXHIBITS 7.14(a)
and 7.14(b) hereof.
7.15 MANAGEMENT AGREEMENT. That certain Management Agreement between
AmeriPath Indiana and AmeriPath APA (the "Management Agreement") shall have been
duly executed and delivered to Purchaser by the parties thereto.
7.16 FORMATION OF AMERIPATH APA. AmeriPath APA shall have been duly
formed as a limited liability company under the laws of the State of Indiana.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF THE PARTNERS AND SELLER
Each and every obligation of Partners and Seller under this Agreement
shall be subject to the satisfaction, on or before the Closing Date, of each of
the following conditions unless waived in writing by Partners:
8.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE. The representations
and warranties of the Purchaser contained in ARTICLE III and elsewhere in this
Agreement and all information contained in any exhibit, schedule or attachment
hereto or any writing delivered by, or on behalf of the Purchaser to each of the
Partners and Seller, shall be true and correct in all material respects when
made and shall be true and correct in all material respects on the Closing Date
as though then made, except as expressly provided herein. The Purchaser shall
have performed and complied with all agreements, covenants and conditions
required by this Agreement to be performed and complied with by them prior to
the Closing Date. An authorized officer of the Purchaser shall have delivered to
Seller a certificate (which shall be addressed to the Seller and each of the
Partners), dated the Closing Date, certifying to the foregoing.
8.2 NO INJUNCTION. No preliminary or permanent injunction or other
Order, decree or ruling issued by any Authority, or any Regulation promulgated
or enacted by any Authority shall be in effect, which would prevent the
consummation of the transactions contemplated hereby.
8.3 PURCHASE CONSIDERATION. The parties on SCHEDULE 1.5 shall have
received the consideration (in the form of cash, AmeriPath Stock and the
Contingent Note) required to be delivered at Closing pursuant to SECTION 1.5
hereof.
8.4 EMPLOYMENT AGREEMENTS. AmeriPath APA shall have executed and
delivered to each of the persons set forth on SCHEDULE 6.6 hereof an Employment
Agreement with AmeriPath APA in the form of EXHIBIT 6.6 , attached hereto.
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8.5 OPINION OF PURCHASER'S COUNSEL. The Partners shall have received an
opinion of counsel, dated the Closing Date, in the form of EXHIBIT 8.5 hereto.
8.6 ASSIGNMENT AND ASSUMPTION. AmeriPath Indiana and AmeriPath APA
shall have executed and delivered Assignment and Assumption Agreements in the
form of EXHIBIT 7.14(a) and 7.14(b) hereto.
8.7 AMENDMENT TO TRUST AGREEMENT. The Trust Agreement shall have been
duly amended pursuant to an amendment substantially in the form of EXHIBIT 7.13
hereof.
8.8 THIRD PARTY CONSENTS. The Purchaser shall have obtained all
consents, approvals, waivers or other authorizations necessary for its
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby.
8.9 LEASE. The Purchaser shall have entered into a lease agreement
substantially in the form of EXHIBIT 7.12 relating to the lease of premises
located at 0000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000.
8.10 MANAGEMENT AGREEMENT. The Management Agreement shall have been
duly executed by the parties thereto and a copy of such Management Agreement
shall have been delivered to Seller.
8.11 FORMATION OF AMERIPATH APA. AmeriPath APA shall have been duly
formed as a limited liability company under the laws of the State of Indiana.
8.12 NO MATERIAL ADVERSE CHANGE. There shall have been no Material
Adverse Changes to AmeriPath since the date of this Agreement and the Seller
shall have received a certificate (which shall be addressed to the Seller and
each of the Partners), dated as of the Closing Date, certifying the same.
8.13 ASSIGNMENT OF EMPLOYMENT AGREEMENT. AmeriPath APA and Purchaser
shall have entered into an Assignment and Assumption Agreement substantially in
the form attached hereto as Exhibit 8.13.
8.14 TERMINATION AGREEMENTS. Seller and Drs. Moriarty, Fitzharris,
Xxxxxx and XxXxxxxxx shall have entered into agreements terminating the
employment agreements between such persons.
ARTICLE IX
CLOSING
9.1 CLOSING. Unless this Agreement shall have been terminated or
abandoned pursuant to the provisions of ARTICLE X hereof, a closing of the
transactions contemplated by this Agreement (the "CLOSING") shall be held on or
before March 1, 1998, or on such other date which is mutually agreed upon in
writing following the satisfaction or waiver of the conditions to closing set
forth in ARTICLE VII and ARTICLE VIII hereof (the "CLOSING DATE").
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9.2 CLOSING DELIVERIES. At the Closing,
(a) each of the Partners and Seller shall deliver or cause to be
delivered to the Purchaser:
(i) the Xxxx of Sale;
(ii) the Assets;
(iii) copies of all consents and approvals required by
SECTIONS 7.3, 7.4 and 7.10 (including UCC termination statements,
releases of mortgages or other releases of Liens);
(iv) the Opinion of Counsel required by SECTION 7.6;
(v) the Certificates required by SECTIONS 7.1 and 7.5;
(vi) the Subordination Agreement required by SECTION 7.9;
(vii) the Employment Agreements required by SECTION 7.7
(EXHIBIT 6.6);
(viii) a certificate, signed by a Partner of the Seller, as to
the Partnership Agreement, the actions taken by the Partners of Seller
in connection with this Agreement, the authority of certain persons to
act on behalf of the Seller and the jurisdictions in which Seller is
qualified to conduct business, in form acceptable to the Purchaser;
(ix) certificates issued by the appropriate governmental
authorities evidencing that Seller is validly existing and organized as
of a date not more than 10 days prior to the Closing Date, as a
partnership organized under the laws of the State of Indiana and as a
foreign partnership authorized to do business under the laws of the
various jurisdictions where it is so qualified, if applicable.
(x) the Assignment and Assumption Agreements required by
SECTION 7.14;
(xi) the Tax Clearance Certificates required by SECTION 7.11;
(xii) the Lease required by SECTION 7.12;
(xiii) the Assignment and Assumption Agreement required by
SECTION 8.13;
(xiv) the termination agreements required by SECTION 8.14; and
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(xv) such other certified resolutions, documents and
certificates as are required to be delivered by each of the Partners or
Seller pursuant to the provisions of this Agreement.
(b) The Purchaser shall deliver to each of the Partners:
(i) the consideration (in the form of cash, AmeriPath Stock
and the Contingent Note) required to be paid or delivered at Closing in
accordance with SECTION 1.5
(ii) the Certificate required by SECTIONS 8.1 AND 8.12;
(iii) the Employment Agreements required by SECTION 8.4;
(iv) such other certified resolutions, documents and
certificates as are required to be delivered by the Purchaser pursuant
to the provisions of this Agreement;
(v) the opinion of counsel to be delivered pursuant to Section
8.5;
(vi) the Assignment and Assumption Agreements required by
SECTION 8.6;
(vii) copies of the amendment required by SECTION 8.7;
(viii) the Lease required by Section 8.9;
(ix) the Assignment and Assumption Agreement required by
SECTION 8.13;
(x) a copy of the Management Agreement to be entered into
pursuant to SECTION 7.15; and
(xi) copies of the organizational documents of AmeriPath APA.
ARTICLE X
TERMINATION AND ABANDONMENT
10.1 METHODS OF TERMINATION. This Agreement may be terminated and the
transactions herein contemplated may be abandoned at any time:
(a) by mutual consent of the Purchaser, each of the Partners and
Seller;
(b) by the Purchaser or both of each of the Partners and Seller
if this Agreement is not consummated on or before March 1, 1998; PROVIDED,
HOWEVER, THAT if any party has breached or defaulted with respect to its
respective obligations under this Agreement on or
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before such date, such party may not terminate this Agreement pursuant to this
SECTION 10.1(b), and each other party to this Agreement shall at its option
enforce its rights against such breaching or defaulting party and seek any
remedies against such party, in either case as provided hereunder and by
applicable law;
(c) by the Purchaser if as of the Closing Date (including any
extensions) any of the conditions specified in ARTICLE VII hereof shall not have
been satisfied or if Seller or each of the Partners is otherwise in default
under this Agreement; or
(d) by the Seller if as of the Closing Date (including any
extensions) any of the conditions specified in ARTICLE VIII hereof shall not
have been satisfied or if Purchaser is otherwise in default under this Agreement
10.2 PROCEDURE UPON TERMINATION. In the event of termination and
abandonment pursuant to SECTION 10.1 hereof, and subject to the proviso
contained in SECTION 10.1(b), this Agreement shall terminate and shall be
abandoned, without further action by any of the parties hereto. If this
Agreement is terminated as provided herein:
(a) each party shall redeliver all documents and other material
of any other party relating to the transactions contemplated hereby, whether
obtained before or after the execution hereof, to the party furnishing the same;
(b) all information received by any party hereto with respect to
the business of any other party or Seller (other than information which is a
matter of public knowledge or which has heretofore been or is hereafter
published in any publication for public distribution or filed as public
information with any governmental authority) shall not at any time be used for
the advantage of, or disclosed to third parties by, such party to the detriment
of the party furnishing such information; and
(c) no party hereto shall have any further liability or
obligation to any other party under or in connection with this Agreement;
PROVIDED, HOWEVER, the non-breaching or non-defaulting party shall not be
foreclosed from bringing a Claim or cause of action or otherwise recovering from
the breaching or defaulting party.
ARTICLE XI
SURVIVAL OF TERMS; INDEMNIFICATION
11.1 SURVIVAL. All of the terms and conditions of this Agreement,
together with the representations, warranties and covenants contained herein or
in any instrument or document delivered or to be delivered pursuant to this
Agreement, shall survive the execution of this Agreement and the Closing
notwithstanding any investigation heretofore or hereafter made by or on behalf
of any party hereto; provided, however, that (a) the agreements and covenants
set forth in this Agreement shall survive and continue until all obligations set
forth therein shall have been performed and satisfied; and (b) all
representations and warranties shall survive and continue until:
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(1) with respect to the representations and
warranties in SECTIONS 2.17 (tax matters), 2.19 (ERISA
matters), 2.21 (environmental matters) and 2.31 (health care
regulatory matters), until sixty (60) days following the
expiration of the applicable statute of limitations;
(2) with respect to the representations and
warranties in SECTIONS 2.15 (Title), 2.16 (Litigation) and 2.7
(options and rights), these representations shall survive and
continue forever and without limitation; and
(3) with respect to all other representations and
warranties, the date upon which AmeriPath receives from its
auditors the audited financial statements for AmeriPath's
fiscal year ending December 31, 1999 (the "1999 AUDIT DATE"),
except for representations, warranties and indemnities for
which an indemnification Claim shall be pending as of the 1999
Audit Date, in which event such indemnities shall survive with
respect to such Claim until the final disposition thereof.
11.2 INDEMNIFICATION BY EACH OF THE SENIOR PARTNERS. Subject to this
ARTICLE XI, the Purchaser and its officers, directors, employees,
representatives and agents shall be indemnified and held harmless by each of the
Senior Partners at all times after the date of this Agreement, against and in
respect of any and all damage, loss, deficiency, liability, obligation,
commitment, cost or expense (including the fees and expenses of counsel)
resulting from, or in respect of, any of the following:
(a) Any misrepresentation, breach of warranty, or non-fulfillment
of any obligation on the part of any Partner or Seller under this Agreement, any
document relating thereto or contained in any schedule or exhibit to this
Agreement or from any misrepresentation in or omission from any certificate,
schedule, other agreement or instrument by any Partner or Seller hereunder;
(b) Any and all Excluded Liabilities; and
(c) All demands, assessments, judgments, costs and reasonable
legal and other expenses arising from, or in connection with any Claim incident
to any of the foregoing.
All other Claims of the Purchaser shall be resolved in accordance with
SECTION 11.4.
11.3 INDEMNIFICATION BY THE PURCHASER. Subject to this ARTICLE XI, the
Seller and each of the Partners and his heirs, assigns, representatives and
agents shall be indemnified and held harmless by the Purchaser, at all times
after the date of this Agreement, against and in respect of any and all damage,
loss, deficiency, liability, obligation, commitment, cost or expense (including
the fees and expenses of counsel) resulting from, or in respect of any of the
following: (a) any misrepresentation, breach of warranty, or non-fulfillment of
any obligation on the part of the Purchaser under this Agreement, any document
relating thereto or contained in any schedule or exhibit to this Agreement or
from any misrepresentation in or omission from any certificate, schedule, other
agreement or instrument by the Purchaser hereunder, (b) any and all Assumed
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Obligations, (c) any breach, default or failure to perform under (i) that
certain Acquisition Agreement, dated January 11, 1995, between The Medical
Laboratory of Drs. Thornton, Haymond, Costin, Buehl, Bolinger, Warner, McGovern,
McClure, Hooker, Xxxxxxx and Xxxxx, an Indiana general partnership, the partners
of such partnership and Corning Clinical Laboratories, Inc., a Delaware
corporation; (ii) that certain Pathology Services Agreement, dated as of January
11, 1995 by and between Corning Clinical Laboratories, Inc., a Delaware
corporation and Seller or (iii) that certain Corning Services Agreement, dated
as of January 11, 1995 by and between Corning Clinical Laboratories, Inc. and
Seller, (d) the operation of the Business after the Closing Date and (e) all
demands, assessments, judgments, costs and reasonable and other expenses arising
from or in connection with any claim incident to any of the foregoing.
11.4 THIRD-PARTY CLAIMS. Except as otherwise provided in this
Agreement, the following procedures shall be applicable with respect to
indemnification for third-party Claims. Promptly after receipt by the party
seeking indemnification hereunder (hereinafter referred to as the "INDEMNITEE")
of notice of the commencement of any (a) Tax audit or proceeding for the
assessment of Tax by any taxing authority or any other proceeding likely to
result in the imposition of a Tax liability or obligation or (b) any action or
the assertion of any Claim, liability or obligation by a third party (whether by
legal process or otherwise), against which Claim, liability or obligation the
other party to this Agreement (hereinafter the "INDEMNITOR") is, or may be,
required under this Agreement to indemnify such indemnitee, the indemnitee will,
if a Claim thereon is to be, or may be, made against the indemnitor, notify the
indemnitor in writing of the commencement or assertion thereof and give the
indemnitor a copy of such Claim, process and all legal pleadings. The indemnitor
shall have the right to participate in the defense of such action with counsel
of reputable standing. The indemnitor shall have the right to assume the defense
of such action unless such action (i) may result in injunctions or other
equitable remedies in respect of the indemnitee or its business; (ii) may result
in liabilities which, taken with other then existing Claims under this ARTICLE
XI, would not be fully indemnified hereunder; or (iii) may have an adverse
impact on the business or financial condition of the indemnitee after the
Closing Date (including an effect on the Tax liabilities, earnings or ongoing
business relationships of the indemnitee). The indemnitor and the indemnitee
shall cooperate in the defense of such Claims. In the case that the indemnitor
shall assume or participate in the defense of such audit, assessment or other
proceeding as provided herein, the indemnitee shall make available to the
indemnitor all relevant records and take such other action and sign such
documents as are necessary to defend such audit, assessment or other proceeding
in a timely manner. If the indemnitee shall be required by judgment or a
settlement agreement to pay any amount in respect of any obligation or liability
against which the indemnitor has agreed to indemnify the indemnitee under this
Agreement, the indemnitor shall promptly reimburse the indemnitee in an amount
equal to the amount of such payment plus all reasonable expenses (including
legal fees and expenses) incurred by such indemnitee in connection with such
obligation or liability subject to this ARTICLE XI.
Prior to paying or settling any Claim against which an indemnitor is,
or may be, obligated under this Agreement to indemnify an indemnitee, the
indemnitee must first supply the indemnitor with a copy of a final court
judgment or decree holding the indemnitee liable on such
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claim or failing such judgment or decree, and must first receive the written
approval of the terms and conditions of such settlement from the indemnitor. An
indemnitor shall have the right to settle any Claim against it, subject to the
prior written approval of the indemnitee, which approval shall not be
unreasonably withheld.
An indemnitee shall have the right to employ its own counsel in any
case, but the fees and expenses of such counsel shall be at the expense of the
indemnitee unless (a) the employment of such counsel shall have been authorized
in writing by the indemnitor in connection with the defense of such action or
Claim, (b) the indemnitor shall not have employed, or is prohibited under this
SECTION 11.4 from employing, counsel in the defense of such action or Claim, or
(c) such indemnitee shall have reasonably concluded that there may be defenses
available to it which are contrary to, or inconsistent with, those available to
the indemnitor, in any of which events such fees and expenses of not more than
one additional counsel for the indemnified parties shall be borne by the
indemnitor.
11.5 DEDUCTIBLE; MAXIMUM LIABILITY. Notwithstanding the foregoing
provisions of this ARTICLE XI, except for the next succeeding sentence of this
SECTION 11.5, no indemnification pursuant to this ARTICLE XI shall be required
of an indemnifying party hereunder unless and until the aggregate amount due the
indemnified party from any and all other parties for all Claims under this
ARTICLE XI shall exceed $100,000 (the "Deductible"). Notwithstanding the
foregoing provisions of this Article XI, the maximum liability for each Senior
Partner under this Agreement with respect to such Senior Partner's personal
obligations shall be $926,667. Notwithstanding the foregoing, no Claim
(regardless of amount) that arises out of any of the Excluded Liabilities or of
a breach of any of the representations or warranties contained in SECTIONS 2.15
(title to Assets), 2.17 (tax matters), 2.31 (healthcare), 2.32 (cash at closing)
shall at any time be subject to the Deductible or any limitation with respect to
the maximum indemnification provided hereunder. The Junior Partners identified
on Schedule I hereto shall not have any personal responsibility for
indemnification under this Article XI.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 AMENDMENT AND MODIFICATION. Subject to applicable law, this
Agreement may be amended, modified and supplemented only by a written agreement
signed by Seller, the Purchaser and each of the Partners.
12.2 ENTIRE AGREEMENT. This Agreement, including the schedules and
exhibits hereto and the documents, annexes, attachments, certificates and
instruments referred to herein and therein, embodies the entire agreement and
understanding of the parties hereto in respect of the agreements and
transactions contemplated by this Agreement and supersedes all prior agreements,
representations, warranties, promises, covenants,
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arrangements, communications and understandings, oral or written, express or
implied, between the parties with respect to such transactions. There are no
agreements, representations, warranties, promises, covenants, arrangements or
understandings between the parties with respect to such transactions, other than
those expressly set forth or referred to herein.
12.3 CERTAIN DEFINITIONS. "AFFILIATE" means, with regard to any Person,
(a) any Person, directly or indirectly, controlled by, under common control of,
or controlling such Person, (b) any Person, directly or indirectly, in which
such Person holds, of record or beneficially, five percent or more of the equity
or voting securities, (c) any Person that holds, of record or beneficially, five
percent or more of the equity or voting securities of such Person, (d) any
Person that, through Contract, relationship or otherwise, exerts a substantial
influence on the management of such Person's affairs, (e) any Person that,
through Contract, relationship or otherwise, is influenced substantially in the
management of their affairs by such Person, or (f) any director, officer,
partner or individual holding a similar position in respect of such Person.
"AUTHORITY" means any governmental, regulatory or
administrative body, agency, arbitrator or authority, any court or
judicial authority, any public, private or industry regulatory agency,
arbitrator authority, whether international, national, federal, state
or local.
"CLAIM" means any action, claim, obligation, liability,
expense, lawsuit, demand, suit, inquiry, hearing, investigation, notice
of a violation, litigation, proceeding, arbitration, or other dispute,
whether civil, criminal, administrative or otherwise, whether pursuant
to contractual obligations or otherwise.
"CONTRACT" means any agreement, contract, commitment,
instrument or other binding arrangement or understanding, whether
written or oral.
"ENVIRONMENTAL LAW" means any Regulation, Order, settlement
agreement or governmental requirement, which relates to or otherwise
imposes liability or standards of conduct concerning mining or
reclamation of mined land, discharges, emissions, releases or
threatened releases of noises, odors or any pollutants, contaminants or
hazardous or toxic wastes, substances or materials, whether as matter
or energy, into ambient air, water, or land, or otherwise relating to
the manufacture, processing, generation, distribution, use, treatment,
storage, disposal, cleanup, transport or handling of pollutants,
contaminants, or hazardous wastes, substances or materials, including
(but not limited to) the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act of 1986, as amended, the Resource Conservation and
Recovery Act of 1976, as amended, the Toxic Substances Control Act of
1976, as amended, the Federal Water Pollution Control Act Amendments of
1972, the Clean Water Act of 1977, as amended, any so-called
"Superlien" law, and any other similar Federal, state or local
statutes.
"ENVIRONMENTAL PERMIT" shall mean Permits, certificates,
approvals, licenses and other authorizations relating to or required by
Environmental Law and necessary or desirable for the Seller's business.
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"GAAP" means generally accepted accounting principles, applied
on a consistent basis.
"HEALTH CARE LAWS" means any Federal, state, or local
Regulation or Order, of any Authority, which relates to or otherwise
imposes liability or standards of conduct concerning the licensure,
certification, qualification, or operation of a health maintenance
organization, pharmacy, home health agency or other aspect of a
Person's business subject to such Health Care Laws, including but not
limited to laws governing home health agencies, laws regarding the
professional standards of health care professionals; Indiana Statutes,
governing home health agencies; health maintenance organizations,
pharmacies, patient self-referral, kick-backs, patient brokering and
access to health care the Employee Health Care Access Act; 21 U.S.C.
`301-392, the Federal Food Drug and Cosmetic Act; 21 U.S.C. `821 et
seq., the Federal Drug Abuse Act; Section 1128B of the Social Security
Act; The Clinical Laboratory Improvement Amendments of 1988; 42 U.S.C.
`1320a-7b, 42 C.F.R. Part 1001, 42 CFR Chapter IV, Subchapter C;
Sections 1876 or 1903 of the Social Security Act; 45 CFR, Part 74; 45
CFR, Part 92; 42 CFR 455.109 Section 306 of the Clean Air Act; 42
U.S.C. `1857(h) et seq., Section 508 of the Clean Water Act; 33 U.S.C.
`1368 et seq., Executive Order 11738 and Environmental Protection
Agency regulations; 40 CFR Part 15, Title VI of the Civil Rights Act of
1964; 42 U.S.C. `2000 d et seq., Section 504 of the Rehabilitation Act
of 1933; 29 U.S.C. `7940; Title IX of the Education Amendments of 1972,
20 U.S.C. `1681 et seq., the Age Discrimination Act of 1975; 42 U.S.C.
`6101 et seq., Section 654 of OBRA `81; 42 U.S.C. `9849 and the
Americans with Disabilities Act of 1990; P.L. 101-336, OBRAs 1986
through 1993, as amended, and any other similar Federal, state or local
Regulations.
"LIEN" means any security interest, lien, mortgage, pledge,
hypothecation, encumbrance, Claim, easement, restriction or interest of
another Person of any kind or nature.
"MATERIAL ADVERSE CHANGE" means any development or change
which has, had or would have a Material Adverse Effect.
"MATERIAL ADVERSE EFFECT" means any circumstances, state of
facts or matters which has, or might reasonably be expected to have, a
material adverse effect in respect of AmeriPath's or Seller's (as the
case may be) business, operations, properties, assets, condition
(financial or otherwise), results, plans, strategies or prospects.
"ORDER" means any decree, consent decree, judgment, award,
order, injunction, rule, consent of or by an Authority.
"PERSON" means any corporation, partnership, joint venture,
company, syndicate, organization, association, trust, entity, Authority
or natural person.
"PROPRIETARY RIGHTS" means any patent, patent application,
copyright, trademark, trade name, service xxxx, service name, trade
secret, know-how, confidential information or other intellectual
property or proprietary rights.
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"REGULATION" means any law, statute, rule, regulation,
ordinance, requirement, announcement or other binding action of or by
an Authority.
"SUBSIDIARY" means any Person which the Purchaser or Seller,
as the case may be, owns, directly or indirectly, 50% or more of the
outstanding stock or other equity interests.
12.4 NOTICES. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given when delivered by hand, mailed, first class certified mail with
postage paid or by overnight receipted courier service or transmitted via
facsimile with a record confirming completed transmission:
(a) If to the Seller, to:
0000 Xxxx Xxxxxxx Xxxxxx
P. O. Xxx 00000
Xxxxxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
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with a copy to:
Bingham, Summers, Welsh & Xxxxxxx
2700 Market Tower
00 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attn: Xxxxx X. Xxxxxxxx, Esq.
or to such other person or address as the Seller shall furnish by
notice to the Purchaser in writing.
(b) If to the Purchaser to:
AmeriPath, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxx X. New, President
with a copy to:
Xxxxxxxxx Traurig Xxxxxxx
Xxxxxx Xxxxx & Xxxxxxx, P.A.
000 X. Xxx Xxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
or to such other person or address as the Purchaser shall furnish by
notice to Seller in writing.
(c) If to the Partners, the addresses listed on Schedule I
hereof or to such other persons or addresses as the Partners shall furnish by
notice to Seller in writing.
12.5 EXHIBITS AND SCHEDULES. The Exhibits and Schedules referred to in
this Agreement are attached hereto and incorporated herein by this reference.
Disclosure of a specific item in any one Schedule shall be deemed restricted
only to the Section of this Agreement to which such disclosure relates, except
where, and to the extent that, there is an explicit cross-reference in such
Schedule to another Schedule.
12.6 BULK SALES. The Purchaser and the Partners acknowledge that the
Seller does not intend to comply with any applicable Bulk Sale Act in connection
with the transaction contemplated by this Agreement. The Seller and the Senior
Partners hereby jointly and severally agree to indemnify and hold the Purchaser
harmless, on an after-tax basis, from and against any loss, damage, liability or
expense resulting from the Seller's failure to comply with said Act; PROVIDED,
HOWEVER, that the Senior Partners and the Seller shall not be obligated to
indemnify the
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Purchaser under this SECTION 12.6 for a liability arising from the
Purchaser's failure to discharge an Assumed Obligation to the extent that such
liability arises from such failure.
12.7 WAIVER OF COMPLIANCE; CONSENTS. Any failure of any party hereto
to comply with any obligation, covenant, agreement or condition herein may be
waived in writing by the other parties hereto, but such waiver or failure to
insist upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure. Whenever this Agreement requires or permits consent
by or on behalf of any party hereto, such consent shall be given in writing.
12.8 ASSIGNMENT. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of the other parties,
except that the Purchaser may assign its rights, interests and obligations
hereunder to any wholly-owned Subsidiary, and may grant Liens or security
interests in respect of its rights and interests hereunder, without the prior
approval of the Partners or the Seller. In the event that Purchaser assigns its
rights, interests and obligations hereunder to a wholly owned subsidiary,
AmeriPath shall remain liable and responsible for its obligations hereunder
notwithstanding such assignment.
12.9 GOVERNING LAW. The Agreement shall be governed by the internal
laws of the State of Indiana as to all matters, including but not limited to
matters of validity, construction, effect and performance.
12.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS. Seller and each of
the Partners hereby irrevocably submit to the jurisdiction of the state or
federal courts located in Xxxxxx County, Indiana in connection with any suit,
action or other proceeding arising out of or relating to this Agreement and the
transactions contemplated hereby, and hereby agree not to assert, by way of
motion, as a defense, or otherwise in any such suit, action or proceeding that
the suit, action or proceeding is brought in an inconvenient forum, that the
venue of the suit, action or proceeding is improper or that this Agreement or
the subject matter hereof may not be enforced by such courts.
12.11 INJUNCTIVE RELIEF. The parties hereto agree that in the event of
a breach of any provision of this Agreement, the aggrieved party or parties may
be without an adequate remedy at law. The parties therefore agree that in the
event of a breach of any provision of this Agreement, the aggrieved party or
parties may elect to institute and prosecute proceedings in any court of
competent jurisdiction to enforce specific performance or to enjoin the
continuing breach of such provision, as well as to obtain damages for breach of
this Agreement. By seeking or obtaining any such relief, the aggrieved party
shall not be precluded from seeking or obtaining any other relief to which it
may be entitled.
12.12 HEADINGS. The article, section and other headings contained in
this Agreement are for reference purposes only and do not affect in any way the
meaning or interpretation of this Agreement (or any provision hereof).
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12.13 PRONOUNS AND PLURALS. Whenever the context may require, any
pronoun used in this Agreement shall include the corresponding masculine,
feminine, or neuter forms, and the singular forms of nouns, pronouns, and verbs
include the plural and vice versa.
12.14 CONSTRUCTION. The parties acknowledge that each party has
reviewed and revised this Agreement and that the normal rule of construction to
the effect that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Agreement.
12.15 DEALINGS IN GOOD FAITH; BEST EFFORTS. Each party hereto agrees to
act in good faith with respect to the other party in exercising its rights and
discharging its obligations under this Agreement. Each party further agrees to
use its best efforts to ensure that the purposes of this Agreement are realized
and to take all further steps as are reasonably necessary to implement the
provisions of this Agreement. Each party agrees to execute, deliver and file any
document or instrument necessary or advisable to realize the purposes of this
Agreement.
12.16 BINDING EFFECT. This Agreement shall not be construed so as to
confer any right or benefit upon any Person other than the signatories to this
Agreement and each of their respective successors and permitted assigns.
12.17 DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to any party hereto, upon any breach or default of any
other party under this Agreement, shall impair any such right, power or remedy
of such party nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence therein, or of or in any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on
the part of any party hereto of any breach or default under this Agreement, or
any waiver on the part of any party of any provisions or conditions of this
Agreement must be made in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement or by law or otherwise afforded to any party, shall be cumulative and
not alternative.
12.18 SEVERABILITY. Unless otherwise provided herein, if any provision
of this Agreement shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
12.19 EXPENSES. All fees, costs and expenses (including, without
limitation, legal, auditing and accounting fees, costs and expenses) incurred in
connection with considering, pursuing, negotiating, documenting or consummating
this Agreement and the transactions contemplated hereby shall be borne and paid
solely by the party incurring such fees, costs and expenses.
12.20 ATTORNEYS' FEES. If any party to this Agreement seeks to enforce
the terms and provisions of this Agreement, then the prevailing party in such
action shall be entitled to recover from the losing party all costs in
connection with such action, including without limitation
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reasonable attorneys' fees, expenses and costs incurred with respect to trials,
appeals and collection.
12.21 COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. In
addition, the parties hereto hereby agree that signatures on pages transmitted
via facsimile or signatures transmitted via facsimile shall be acceptable and
deemed an original with respect to this Agreement and any other agreements
contemplated hereunder.
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IN WITNESS WHEREOF, the parties hereto have made and entered into this
Agreement effective as of the date first hereinabove set forth.
PURCHASER:
AMERIPATH, INC.,
By: /s/ XXXXXX X. XXXX,
---------------------------------
XXXXXX X. XXXX,
Executive Vice President and
Chief Financial Officer
PARTNERS:
/s/ XXXXXX XXXXXX, M.D.
-------------------------------------
XXXXXX X. XXXXXX, M.D.
/s/ XXXXX X. XXXXXXX, M.D.
-------------------------------------
XXXXX X. XXXXXXX, M.D.
/s/ XXXXXX X. XXXXX, M.D.
-------------------------------------
XXXXXX X. XXXXX, M.D.
/s/ XXXXXX X. XXXXX, M.D.
-------------------------------------
XXXXXX X. XXXXX, M.D.
/s/ XXXXX X. XXXXXXX, M.D.
-------------------------------------
XXXXX X. XXXXXXX, M.D.
/s/ XXXXX X. XXXXXXXX, M.D.
-------------------------------------
XXXXX X. XXXXXXXX, M.D.
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/s/ T. XXX XXXXXX XX, M.D.
-------------------------------------
T. XXX XXXXXX XX, M.D.
/s/ F. XXXXXX XxXXXXXX, XX., M.D.
-------------------------------------
F. XXXXXX XxXXXXXX, XX., M.D.
/s/ XXXXXXX X. XxXXXXX, M.D.
-------------------------------------
XXXXXXX X. XxXXXXX, M.D.
/s/ XXX XXXXXXXX, M.D.
-------------------------------------
XXX XXXXXXXX, M.D.
/s/ XXXXXX X. XXXXXXXXXX, M.D., PH.D.
-------------------------------------
XXXXXX X. XXXXXXXXXX, M.D., PH.D.
/s/ XXXXX X. XxXXXXXXX III, M.D.
-------------------------------------
XXXXX X. XxXXXXXXX III, M.D.
/s/ XXXXXX X. XXXXXX, M.D.
-------------------------------------
XXXXXX X. XXXXXX, M.D.
THE SELLER:
ANATOMIC PATHOLOGY ASSOCIATES, LLP
By: /s/ T. XXX XXXXXX XX, M.D.
---------------------------------
Name: T. Xxx Xxxxxx XX, M.D.
Director Partner
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