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EXHIBIT 2
ASSET PURCHASE AGREEMENT
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THIS ASSET PURCHASE AGREEMENT (the "Agreement"), dated as of September
30, 1999, is by and among AmSurg Holdings, Inc., a Tennessee corporation
("AmSurg"), and the individuals set forth on the signature pages attached hereto
(individually "Doctor" and
collectively "Doctors").
WHEREAS, AmSurg desires to purchase and Doctors desire to sell certain
of their assets, as more fully described herein, upon and subject to the terms
and conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties and covenants of the parties hereinafter set forth,
the parties agree as follows:
ARTICLE 1. PURCHASE AND SALE OF ASSETS
1.1. PURCHASE AND SALE OF ASSETS. Subject to the terms and conditions of
this Agreement, at the Closing, Doctors shall sell, transfer, convey, assign and
deliver to AmSurg and AmSurg shall purchase, acquire and accept from Sellers a
100% interest in the personal goodwill of each Doctor with respect to the
endoscopy surgery center (the "Center") owned and operated by Ocean Surgical
Pavilion, Inc. ("Ocean"), of which the Doctors are all of the shareholders,
located in Oakhurst, New Jersey (the "Purchased Assets").
1.2. ASSUMPTION OF LIABILITIES. Except as described herein, AmSurg will not
assume any debts, liabilities, obligations, expenses, taxes, contracts or
commitments of Seller or the Center of any kind, character or description,
whether accrued, absolute, contingent or otherwise ("Liabilities"), no matter
whether arising before or after the Closing, and whether or not reflected or
reserved against in Seller's or the Center's financial statements, books of
account or records. Seller will indemnify AmSurg against and hold it harmless
from any such Liabilities.
ARTICLE 2. PURCHASE PRICE
The initial purchase price ("Initial Purchase Price") for the Purchased
Assets shall be $3,898,767 payable in cash. The Initial Purchase Price shall be
allocated equally among the Doctors.
AmSurg and Doctors acknowledge that the rule proposed in June 1998 by
the Health Care Financing Administration ("HCFA") providing in part for a change
in the payment methodology and payment rates utilized by HCFA to reimburse
ambulatory surgery centers as it may be adopted or amended (the "Proposed
Rule"), could have a negative effect on the future revenues and earnings of the
Center. In order to address the uncertainty regarding the Proposed Rule and its
effect on the Center, the Initial Purchase Price has been calculated based on
the annualized income for Medicare cases performed in the Center from July 1,
1998 through December 31, 1998. The potential percentage reduction in Medicare
reimbursement rate changes are set forth in Exhibit 2(a). Exhibit 2(b) sets
forth what the Initial Purchase Price would have been without any adjustment for
the proposed Medicare reimbursement rate changes (the "Potential Purchase
Price"), and the difference between the Initial Purchase Price and the Potential
Purchase Price (the "Purchase Price Differential").
Of the Purchase Price Differential, on the Closing Date, AmSurg will
pay $9,676, payable in cash, which will be allocated equally among the Doctors.
During the six (6) years following the Closing, commencing January 1, 2000, at
the end of each six (6) month period thereafter, if a final version of the
Proposed Rule has not been adopted during such period, then AmSurg will pay as
additional consideration ("Additional Purchase Price") an amount in cash equal
to one twelfth (1/12) of the Purchase Price Differential as set forth on Exhibit
2(b), together with interest thereon at the rate equal to the prime rate as
published from time to time by SunTrust Bank in Nashville, Tennessee, accruing
from the Closing Date. In the event that a final version of the Proposed Rule is
adopted during the six (6) years following the Closing, then the purchase price
will be recalculated and adjusted utilizing the formula set forth on Exhibits
2(a) and 2(b) and substituting the final Medicare reimbursement rates for the
proposed Medicare reimbursement rates set forth therein (the "Adjusted Purchase
Price"). If the Adjusted Purchase Price exceeds the sum of (a) the Initial
Purchase Price and (b) any Additional Purchase Price previously paid by AmSurg
(including the payment made at Closing out of the Purchase Price Differential),
AmSurg will pay in cash such amount as additional consideration, together with
interest at the prime rate accruing from the Closing Date, within sixty (60)
days after such determination. All such
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payments will be allocated equally among the Doctors. In no event will the
Purchase Price recalculation cause (x) Doctors to return any portion of the
Purchase Price previously paid to Doctor by AmSurg or (y) the aggregate
consideration paid by AmSurg to exceed the Potential Purchase Price.
ARTICLE 3. CLOSING
3.1. CLOSING. The closing ("Closing") of the sale and purchase of the
Purchased Assets shall take place at the offices of Wilentz, Xxxxxxx & Xxxxxxx,
00 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxx, Xxx Xxxxxx 00000, within ten
(10) business days after the satisfaction of all conditions to the parties'
obligations to consummate the transactions contemplated hereby, which shall in
no event be later than September 30, 1999, or at such other time as shall be
agreed upon by all the parties hereto (the "Closing Date").
3.2. OBLIGATIONS OF THE PARTIES AT THE CLOSING.
(a) At the Closing, AmSurg shall deliver to Doctors:
(i) the consideration as specified in Article 2;
(ii) a copy of resolutions of the Board of Directors of AmSurg,
certified by its Secretary, authorizing the execution, delivery and
performance of this Agreement and the other documents referred to
herein to be executed by AmSurg, and the consummation of the
transactions contemplated hereby;
(iii) a certificate of AmSurg certifying as to the accuracy of
the representations and warranties of AmSurg at and as of the Closing
and that AmSurg has performed or complied with all of the covenants,
agreements, terms, provisions and conditions to be performed or
complied with by AmSurg at or before the Closing;
(iv) the opinion of Bass, Xxxxx & Xxxx PLC, legal counsel for
AmSurg, the terms of which are substantially as set forth in Exhibit
9.4; and
(v) such other certificates and documents as Doctors or their
counsel may reasonably request.
(b) At the Closing, Doctors will deliver to AmSurg:
(i) a certificate of each of the Doctors certifying as to the
accuracy of Doctors' representations and warranties at and as of the
Closing and that they have performed or complied with all of the
covenants, agreements, terms, provisions and conditions to be
performed or complied with by each of them at or before the Closing;
(ii) the opinion of Wilentz, Xxxxxxx & Xxxxxxx, legal counsel to
Doctors, in substantially the form of Exhibit 8.4; and
(iii) such other certificates and documents as AmSurg or its
counsel may reasonably request.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF DOCTORS
Each of the Doctors, severally and not jointly, represents and warrants
as follows:
4.1. AUTHORITY. Such Doctor has full authority to enter into and carry out
the provisions of this Agreement, and this Agreement, when executed, will
constitute a valid and binding legal obligation enforceable against him in
accordance with its terms.
4.2. NO VIOLATION. The execution and delivery of this Agreement by each
Doctor does not, and the consummation of the transactions contemplated hereby
will not (a) violate any provision of, or result in the creation of any lien or
security interest under, any agreement, indenture, instrument, lease, security
agreement, mortgage or lien to which such Doctor is a party or by which any of
such Doctors's assets or properties are bound; (b) violate any provision of the
Articles of Incorporation or bylaws of Ocean; (c) violate any order, arbitration
award, judgment, writ, injunction, decree, statute, rule or regulation
applicable to such Doctor; or (d) violate any other contractual or legal
obligation or restriction to which such Doctor is subject.
4.3. EXPENSES OF OPERATING THE CENTER. Schedule 4.3 sets forth all of the
current expenses of operating the Center, and also reflects the manner in which
the operating expenses will be allocated on a going forward basis; provided,
that in the event the Center no longer utilizes the services of any personnel
employed by Shore Gastroenterology, P.C. or an affiliate of Ocean, the
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allocation of expenses will then be adjusted to reflect any such changes in
allocation.
4.4. NO BROKER'S FEES. Such Doctor has not done anything to cause or incur
any liability or obligation for investment banking, brokerage, finder's, agent's
or other fees, commissions, expenses or charges in connection with the
negotiation, preparation, execution or performance of this agreement or the
consummation of the transactions contemplated hereby, and Doctor does not know
of any claim by anyone for such a fee, commission, expense or charge.
4.5. FULL DISCLOSURE. Neither this Agreement, nor any schedule, exhibit,
list, certificate or other instrument or document delivered to AmSurg pursuant
to this Agreement by or on behalf of Doctors, contains any untrue statement of a
material fact or omits to state any material fact required to be stated herein
or therein or necessary to make the statements, representations or warranties
and information contained herein or therein not misleading. No Doctor has
withheld from AmSurg disclosure of any event, condition or fact which such
Doctor knows, or has reasonable grounds to know, may materially adversely affect
the Purchased Assets or the operations of the Center.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF AMSURG
AmSurg represents and warrants as follows:
5.1. ORGANIZATION. AmSurg is a corporation duly organized, validly existing
and in good standing under the laws of the State of Tennessee. AmSurg has full
corporate power and corporate authority to carry on its business as now
conducted and to own, lease or operate its properties and assets as now owned,
leased or operated.
5.2. AUTHORIZATION. AmSurg has full corporate power and corporate authority
to enter into this Agreement and perform its obligations hereunder and carry out
the transactions contemplated hereby. The execution, delivery and performance by
AmSurg of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized and approved by all necessary corporate action.
This Agreement, when executed, will constitute a legal, valid and binding
obligation of AmSurg enforceable against it in accordance with its terms.
5.3. NO VIOLATION. The execution and delivery of this Agreement by AmSurg
does not, and the consummation of the transactions contemplated hereby will not,
(a) violate any provision of, or result in the creation of any lien or security
interest under, any material agreement, indenture, instrument, lease, security
agreement, mortgage or lien to which AmSurg is a party or by which any of
AmSurg's assets or properties are bound which violation or lien would have a
material adverse effect on the business or operations of AmSurg; (b) violate any
provision of the Charter or Bylaws of AmSurg; (c) violate any order, arbitration
award, judgment, writ, injunction, decree, statute, rule or regulation
applicable to AmSurg which violation would have a material adverse effect on the
business or operations of AmSurg; or (d) violate any other contractual or legal
obligation or restriction to which AmSurg is subject which violation would have
a material adverse effect on the business or operations of AmSurg.
5.4. TAXES. AmSurg has filed all federal, state and local tax returns
required to be filed by it through the date hereof (or has obtained an extension
for such filing) and has paid all taxes and assessments (including without
limitation income, excise, unemployment, social security, occupation, franchise,
property, sales and use taxes, import duties or charges, and all penalties and
interest in respect thereof) due and payable therefrom. AmSurg has not signed
any extension agreement with any taxing authority and knows of no open or
questionable matters for any prior periods.
5.5. LITIGATION. There is no claim, litigation, investigation or proceeding
pending or, to AmSurg's knowledge, threatened against AmSurg at law or in equity
or before any court, legislative or administrative tribunal or governmental
agency which questions the validity of this Agreement or which, if adversely
determined or publicly disclosed, would have a material adverse effect on the
business or operations of AmSurg.
5.6. COMPLIANCE WITH LAW AND OTHER REGULATIONS. AmSurg is in compliance in
all material respects with all requirements of applicable Laws. AmSurg possesses
all required licenses, permits, certificates, and authorizations needed for the
conduct of its business as presently conducted, the failure of which would have
a material adverse effect on the business or operations of AmSurg. AmSurg knows
of no act or omission occurring on or before the date hereof which would subject
AmSurg to the likelihood of any material fine or suspension of any material
license, permit, certificate or authorization.
5.7. REPORTS AND RETURNS. AmSurg has filed all material reports and returns
heretofore required by federal, state or municipal authorities and all material
reports and returns to the various governmental authorities which
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control, directly or indirectly, any of its activities, and has paid all sums
heretofore due with respect to such reports and returns.
5.8. DEFAULTS. AmSurg is not in default under, and no event has occurred
which, with the giving of notice or the passage of time, or both, would result
in a default under, any outstanding indenture, mortgage, contract or agreement
to which AmSurg is a party, which default would have a material adverse effect
on the business or operations of AmSurg.
The execution, delivery and performance by AmSurg of this Agreement and
the transactions contemplated hereby will not violate any provision of, or
result in the breach of, or constitute a default under, or require any consent
under, any law, or any order, writ, injunction or decree of any court,
governmental agency or arbitration tribunal, or any material contract, agreement
or instrument to which AmSurg is a party or by which AmSurg is bound.
5.9. CORPORATE DOCUMENTS. AmSurg has made available to Doctors for
inspection by Doctors and their authorized representatives, a copy of its
Charter, as amended to the date hereof, certified to be a true and correct copy
thereof by the Secretary of State of Tennessee, and the minute books of AmSurg
containing the Bylaws and all records of the proceedings, meetings, actions and
consents of the shareholders and the board of directors (and any committees
thereof) of AmSurg.
5.10. FULL DISCLOSURE. Neither this Agreement, nor any Schedule, exhibit,
list, certificate or other instrument or document delivered to Doctors pursuant
to this Agreement by or on behalf of AmSurg contains any untrue statement of a
material fact or omits to state any material fact required to be stated herein
or therein in order to make the statements, representations or warranties
contained herein or therein not misleading.
5.11. NO BROKER'S FEES. AmSurg has not done anything to cause or incur any
liability or obligation for investment banking, brokerage, finder's, agent's or
other fees, commissions, expenses or charges in connection with the negotiation,
preparation, execution or performance of this Agreement or the consummation of
the transactions contemplated hereby, and AmSurg does not know of any claim by
anyone for such a fee, commission, expense or charge.
5.12. CALCULATION OF INITIAL PURCHASE PRICE AND PURCHASE PRICE DIFFERENTIAL.
To AmSurg's knowledge, the Initial Purchase Price and the Purchase Price
Differential have been calculated in an appropriate manner taking into account
the change in reimbursement contemplated by the Proposed Rules.
ARTICLE 6. COVENANTS AND AGREEMENTS OF DOCTORS
Doctors further covenant and agree that from the date hereof until the
Closing, and thereafter if so specified, they will fulfill the following
covenants and agreements unless otherwise consented to by AmSurg in writing:
6.1. ACCESS; FURTHER ASSURANCES.
(a) Doctors will accord to AmSurg, its counsel, accountants and other
representatives, from the date hereof and at any time after the Closing, full
access to all of the properties, books, contracts, commitments, financial
information and records of the Center, and will furnish AmSurg during such
period with all such information concerning the business and operations of the
Center, as AmSurg reasonably may request. At any time and from time to time
after the Closing, at AmSurg's request and without further consideration,
Doctors agree to execute and deliver such certificates and documents as may be
reasonably required in connection with any audit of the Center or its
operations.
(b) At any time and from time to time after the Closing, at AmSurg's
request and without further consideration, Doctors will execute and deliver such
other instruments of sale, transfer, conveyance, assignment and delivery and
confirmation and take such action as AmSurg may reasonably deem necessary or
desirable in order more effectively to transfer, convey and assign to AmSurg and
to place AmSurg in possession and control of and to confirm AmSurg's title to,
the Purchased Assets, and to assist AmSurg in exercising all rights and enjoying
all benefits with respect thereto.
6.2. CONFIDENTIALITY.
(a) In the event the transactions contemplated by this Agreement are
not consummated for any reason, Doctors promptly will return to AmSurg all
records and information provided to Doctors from AmSurg, and Doctors will treat
all such records and information as confidential.
(b) Except as otherwise required by law, Doctors will not disclose at
any time to any other person not an employee of AmSurg or AmSurg Corp. (or a
person otherwise involved in the carrying out of the transactions contemplated
by this Agreement), nor make
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any public announcement of, the transactions or terms of the transactions
contemplated by this Agreement.
6.3. NOTICE OF ADVERSE CHANGE. Doctors will advise AmSurg in writing of any
material adverse change in the Purchased Assets from the date of this Agreement
to the Closing Date.
6.4. SCHEDULES. Doctors shall have the continuing obligation to supplement
or amend promptly the Schedules being delivered by Doctors pursuant to this
Agreement with respect to any matter hereafter arising or discovered which, if
existing or known at the date of this Agreement, would have been required to be
set forth or described in these Schedules.
6.5. RESTRICTIVE COVENANTS; CONFIDENTIALITY. Each Doctor agrees that he will
not be an officer, director or employee or consultant of or have any direct or
indirect ownership interest in, or manage, lease, develop or otherwise have any
financial interest in, or receive any compensation from any health care facility
competing with the LLC within fifteen (15) miles of the Center and in the towns
of Redbank, Freehold, Toms River, Marlboro and Manalapan, New Jersey, until the
later of (a) one (1) year after Doctor ceases to be a shareholder of Ocean or
(b) five (5) years after the Closing Date. The foregoing shall not prohibit
Doctors from owning shares of capital stock constituting less than 1% of the
outstanding capital stock of any corporation whose common stock is traded on a
national securities exchange or on The Nasdaq Stock Market. Doctors recognize
and acknowledge that the ascertainment of damages in the event of a breach of
this Section 6.5 would be difficult, and agree that AmSurg, in addition to all
other remedies it may have, shall have the right to injunctive relief if there
is such a breach.
Notwithstanding the foregoing, the parties acknowledge and agree that
Section 6.5 does not require Doctors to perform endoscopy procedures at the
Center or to refer patients to the Center, and imposes no restrictions on where
such procedures are performed or where referrals are made. Further, the parties
acknowledge and agree that Section 6.5 does not prohibit Doctors from acting as
department heads or division chiefs of gastroenterology for hospitals within the
area described above, so long as no compensation is paid to any Doctor for
acting in such capacity.
ARTICLE 7. COVENANTS AND AGREEMENTS OF AMSURG
AmSurg further covenants and agrees that from the date hereof until the
Closing, unless otherwise consented to by Seller in writing, it will fulfill the
following covenants and agreements:
7.1. CONFIDENTIALITY.
(a) In the event the transactions contemplated by this Agreement are
not consummated for any reason, AmSurg promptly will return to Doctors all
records and information provided to AmSurg from Doctors, and AmSurg will treat
all such records and information as confidential.
(b) Except as otherwise required by law, AmSurg will not disclose at
any time to any other person not an employee of AmSurg or AmSurg Corp. (or a
person otherwise involved in the carrying out of the transactions contemplated
by this Agreement), nor make any public announcement of, the transactions or
terms of the transactions contemplated by this Agreement.
7.2. NOTICE OF ADVERSE CHANGE. AmSurg will notify Doctors in writing of any
material adverse change in the business, assets, operations, conditions or
prospects of AmSurg from the date of this Agreement to the Closing Date.
7.3. SCHEDULES. AmSurg shall have the continuing obligation to supplement
or amend promptly the Schedules being delivered by AmSurg pursuant to this
Agreement with respect to any matter hereafter arising or discovered which, if
existing or known at the date of this Agreement, would have been required to be
set forth or described in these Schedules.
ARTICLE 8. CONDITIONS TO AMSURG'S OBLIGATIONS
AmSurg shall not be obligated to consummate the transactions
contemplated hereby, unless each of the following conditions is fulfilled or
performed (unless expressly waived in writing by AmSurg) prior to or at the
Closing:
8.1. COMPLIANCE. The representations and warranties made by Doctors in this
Agreement and the statements contained in the Schedules attached hereto or in
any instrument, list, certificate or writing delivered by Doctors pursuant to
this Agreement shall be true when made and at and as of the time of the Closing
as though
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such representations and warranties were made at and as of the Closing.
8.2. PERFORMANCE BY DOCTORS. Doctors shall have performed and complied with
all covenants, agreements, obligations and conditions required by this Agreement
to be so complied with or performed by each of them.
8.3. CERTIFICATE OF DOCTORS. Each of the Doctors shall have delivered to
AmSurg a certificate, dated the Closing Date, certifying as to the fulfillment
by such Doctor of the conditions specified in Sections 8.1 and 8.2 hereof.
8.4. OPINION OF COUNSEL. AmSurg shall have been furnished with the opinion
of Wilentz, Xxxxxxx & Xxxxxxx, counsel to Doctors, in substantially the form of
Exhibit 8.4.
8.5. MANAGEMENT AGREEMENT. The LLC and Ocean shall have executed a
Management Services Agreement in substantially the form of Exhibit 8.5 attached
hereto.
8.6. OPERATING AGREEMENT. Physician Entity and AmSurg shall have entered
into the Operating Agreement for the LLC in substantially the form of Exhibit
8.6 attached hereto.
8.7. CONTRIBUTION AGREEMENT. Ocean, AmSurg, the LLC and the Doctors shall
have entered into a Contribution Agreement in substantially the form of Exhibit
8.7 attached hereto.
ARTICLE 9. CONDITIONS TO DOCTORS' OBLIGATIONS
Doctors shall not be obligated to consummate the transactions
contemplated hereby unless each of the following conditions is fulfilled or
performed (unless expressly waived in writing by Doctors) prior to or at the
Closing:
9.1. COMPLIANCE. The representations and warranties made by AmSurg in this
Agreement and the statements contained in the Schedules attached hereto or in
any instrument, list, certificate or writing delivered by AmSurg pursuant to
this Agreement shall be true when made and at and as of the time of the Closing
as though such representations and warranties were made at and as of the
Closing.
9.2. PERFORMANCE BY AMSURG. AmSurg shall have performed and complied with
all agreements, obligations and conditions required by this Agreement to be so
complied with or performed by AmSurg.
9.3. CERTIFICATE OF AMSURG. AmSurg shall have delivered to Doctors a
certificate, dated the Closing Date, certifying as to the fulfillment of the
conditions specified in Sections 9.1 and 9.2 hereof.
9.4. OPINION OF COUNSEL. Doctors shall have been furnished the opinion of
Bass, Xxxxx & Xxxx PLC, counsel to AmSurg, in substantially the form of
Exhibit 9.4.
9.5. LEASE. The LLC and EFM Realty, Inc. shall have entered into a lease
(the "Lease") for the Center in substantially the form of Exhibit 9.5.
ARTICLE 10. INDEMNIFICATION
10.1. INDEMNIFICATION BY DOCTORS. Doctors, jointly and severally, hereby
agree to defend, indemnify and hold harmless AmSurg and shall reimburse AmSurg
for, from and against each claim, loss, liability, cost and expense (including
without limitation, interest, penalties, costs of preparation and investigation,
and the reasonable fees, disbursements and expenses of attorneys, accountants
and other professional advisors) (collectively, "Losses"), directly or
indirectly relating to, resulting from or arising out of:
(a) Any untrue representation, misrepresentation, breach of warranty or
nonfulfillment of any covenant, agreement or other obligation by or of any
Doctor contained herein, any Schedule hereto, or the Contribution Agreement of
even date herewith by and among Ocean, the Doctors and the LLC, or in any
certificate, document or instrument delivered to AmSurg pursuant hereto or
thereto.
(b) Any tax liability of the Center not previously paid, which may at
any time be asserted or assessed against the Center for any event or period
prior to the Closing Date (regardless of whether the possibility of the
assertion or assessment of any such tax liability shall have been disclosed to
AmSurg at or prior to the Closing).
(c) Liability for any amounts owed by the Center to any governmental
third party or private payors because of overpayments to the Center prior to the
Closing for services rendered to patients, which liability is due to a
recomputation of rates, field audit adjustments, overpayments or otherwise.
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(d) Any other Loss incidental to any of the foregoing.
10.2. INDEMNIFICATION BY AMSURG. AmSurg hereby agrees to defend, indemnify
and hold harmless Doctors, and shall reimburse Doctors for, from and against
Losses directly or indirectly relating to, resulting from or arising out of:
(a) Any untrue representation, misrepresentation, breach of warranty or
nonfulfillment of any covenant, agreement or other obligation by AmSurg,
contained herein or in any certificate, document or instrument delivered to
Doctors pursuant hereto.
(b) Any other Loss incidental to the foregoing.
10.3. PROCEDURE.
(a) The indemnified party shall promptly notify the indemnifying party
of any claim, demand, action or proceeding for which indemnification will be
sought under Sections 10.1 or 10.2 of this Agreement, and, if such claim,
demand, action or proceeding is a third party claim, demand, action or
proceeding, the indemnifying party will have the right at its expense to assume
the defense thereof using counsel reasonably acceptable to the indemnified
party. The indemnified party shall have the right to participate, at its own
expense, with respect to any such third party claim, demand, action or
proceeding. In connection with any such third party claim, demand, action or
proceeding, AmSurg and Doctors shall cooperate with each other and provide each
other with access to relevant books and records in their possession. No such
third party claim, demand, action or proceeding shall be settled without the
prior written consent of the indemnified party. If a firm written offer is made
to settle any such third party claim, demand, action or proceeding and the
indemnifying party proposes to accept such settlement and the indemnified party
refuses to consent to such settlement, then: (i) the indemnifying party shall be
excused from, and the indemnified party shall be solely responsible for, all
further defense of such third party claim, demand, action or proceeding; and
(ii) the maximum liability of the indemnifying party relating to such third
party claim, demand, action or proceeding shall be the amount of the proposed
settlement if the amount thereafter recovered from the indemnified party on such
third party claim, demand, action or proceeding is greater than the amount of
the proposed settlement.
(b) Any claim of indemnity of AmSurg against Doctors with respect to
Section 10.1 hereof may in AmSurg's discretion be discharged by setoff against
any amounts owed or owing to Doctors or any affiliate thereof under the
Operating Agreement between Ocean and AmSurg; provided, that any such set-off
amount shall be held in a separate interest-bearing account by Bass, Xxxxx &
Xxxx PLC until the indemnification matter is resolved to the reasonable
satisfaction of both parties or a court order regarding the disposition of the
funds is entered.
(c) Notwithstanding the foregoing, no Doctor shall be required to
indemnify AmSurg for any amount in excess of his pro rata portion of the
Adjusted Purchase Price.
(d) Notwithstanding the foregoing, Doctors shall not be obligated to
make any indemnification under Section 10.1 unless the aggregate amount of
Losses exceeds $10,000 (the "Basket"), and such indemnification with respect to
such Losses shall be made by Doctors only to the extent of such excess over the
Basket.
ARTICLE 11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
11.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained herein shall survive the Closing Date and any investigation
made by or on behalf of any party hereto, and shall survive for a period of
twenty-four (24) months after the Closing Date (except for any Losses described
in Section 10.1(b), which shall survive for the applicable statute of
limitations, including any waivers thereof, Section 10.1(c), which shall not
terminate), and AmSurg's obligations under Article 2, which shall terminate upon
payment in full of the Adjusted Purchase Price.
In addition, in the event that all of LLC, AmSurg, AmSurg Corp., or
their successors or assigns, dissolves, liquidates or otherwise ceases to exist,
the provisions of Section 6.5 hereof shall terminate and be of no further force
or effect.
11.2. REMEDIES CUMULATIVE. The remedies provided herein shall be cumulative
and shall not preclude the assertion by any party hereto of any other rights or
the seeking of any other remedies against the other party hereto.
ARTICLE 12. TERMINATION OF AGREEMENT
This Agreement may be terminated at any time prior to the Closing:
(a) by mutual agreement of Doctors and AmSurg;
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(b) by AmSurg, if there has been a material violation or breach by
Doctors of any of the agreements, representations or warranties contained in
this Agreement which has not been waived in writing, or if any of the conditions
set forth in Article 8 hereof have not been satisfied by the Closing or have not
been waived in writing by AmSurg;
(c) by Doctors, if there has been a material violation or breach by
AmSurg of any of the agreements, representations or warranties contained in this
Agreement which has not been waived in writing, or if any of the conditions set
forth in Article 9 hereof have not been satisfied by the Closing or have not
been waived in writing by Doctors;
(d) by either AmSurg or Doctors if the transactions contemplated by
this Agreement shall not have been consummated on or before September 30, 1999;
or
(e) by either AmSurg or Doctors if the other makes an assignment for
the benefit of creditors, files a voluntary petition in bankruptcy or seeks or
consents to any reorganization or similar relief under any present or future
bankruptcy act or similar law, or is adjudicated a bankrupt or insolvent, or if
a third party commences any bankruptcy, insolvency, reorganization or similar
proceeding involving the other.
ARTICLE 13. MISCELLANEOUS
13.1. EXPENSES. All fees and expenses incurred by Doctors, including without
limitation, legal fees and expenses, in connection with this Agreement will be
borne by Doctors and all fees and expenses incurred by AmSurg, including without
limitation, legal fees and expenses, in connection with this Agreement will be
borne by AmSurg.
13.2. ASSIGNABILITY; PARTIES IN INTEREST.
(a) AmSurg may assign any or all of its rights hereunder to any
affiliate or any direct or indirect subsidiary of AmSurg, and AmSurg shall
advise Doctors of any such assignment and shall designate such party as the
assignee and transferee of the Purchased Assets. Any such assignee shall assume
all of AmSurg's duties, obligations and undertakings hereunder.
(b) Doctors may not assign, transfer or otherwise dispose of any of
their respective rights hereunder without the prior written consent of AmSurg.
(c) All the terms and provisions of this Agreement shall be binding
upon, shall inure to the benefit of and shall be enforceable by the respective
heirs, successors, assigns and legal or personal representatives of the parties
hereto.
13.3. ENTIRE AGREEMENT; AMENDMENTS; WAIVER. This Agreement, including the
exhibits, Schedules, lists and other documents and writings referred to herein
or delivered pursuant hereto, which form a part hereof, contains the entire
understanding of the parties with respect to its subject matter. There are no
restrictions, agreements, promises, warranties, covenants or undertakings other
than those expressly set forth herein or therein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to its
subject matter. This Agreement may be amended only by a written instrument duly
executed by all parties or their respective heirs, successors, assigns or legal
personal representatives. Any condition to a party's obligations hereunder may
be waived but only by a written instrument signed by the party entitled to the
benefits thereof. The failure or delay of any party at any time or times to
require performance of any provision or to exercise its rights with respect to
any provision hereof, shall in no manner operate as a waiver of or affect such
party's right at a later time to enforce the same.
13.4. SEVERABILITY. The invalidity of any term or terms of this Agreement
shall not affect any other term of this Agreement, which shall remain in full
force and effect.
13.5. NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered or mailed (registered or certified mail, postage
prepaid, return receipt requested or by overnight courier service) as follows:
If to Doctors, to each Doctor at:
Ocean Surgical Pavilion, Inc.
0000 Xxxxx Xxxxx 00, Xxxxx 0
Xxxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxx, M.D.
Xxxx X. Xxxxxxxxxx, M.D.
Xxxxxxxx X. Xxxxxxxx, M.D.
Xxxxx X. Xxxxxx, M.D.
With a copy to:
Wilentz, Xxxxxxx & Xxxxxxx
00 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxx 000, Xxx 00
Xxxxxxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxx, Esq.
If to AmSurg:
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Asset Purchase Agreement/Page 8
9
AmSurg Holdings, Inc.
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
With a copy to:
Bass, Xxxxx & Xxxx PLC
First American Center
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
only be effective upon receipt.
13.6. SECTION AND OTHER HEADINGS. The section and other headings contained in
this Agreement are for reference purposes only and shall not in any way affect
the meaning or interpretation of this Agreement.
13.7. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, provided, however, that
the several executed counterparts shall together have been signed by AmSurg and
each of the Doctors. All of such executed counterparts shall constitute one and
the same instrument. Facsimile signatures may be utilized in the execution of
this Agreement.
13.8. PARTIES IN INTEREST. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns. The parties acknowledge that they have
independently negotiated the provisions of this Agreement, that they have relied
upon their own counsel as to matters of law and application and that neither
party has relied on the other party with regard to such matters. The parties
expressly agree that there shall be no presumption created as a result of either
party having prepared in whole or in part any provisions of this Agreement.
13.9. APPLICABLE LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Tennessee, without regard
to its conflict of laws rules.
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Asset Purchase Agreement/Page 9
10
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
AMSURG HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------
Title: Secretary
---------------------------
DOCTORS:
/s/ Xxxxxxxx X. Xxxxx, M.D.
----------------------------------
Xxxxxxxx X. Xxxxx, M.D.
/s/ Xxxx X. Xxxxxxxxxx, M.D.
----------------------------------
Xxxx X. Xxxxxxxxxx, M.D.
/s/ Xxxxxxxx X. Xxxxxxxx, M.D.
----------------------------------
Xxxxxxxx X. Xxxxxxxx, M.D.
/s/ Xxxxx X. Xxxxxx, M.D.
----------------------------------
Xxxxx X. Xxxxxx, M.D.
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Asset Purchase Agreement/Page 10
11
The Schedules and Exhibits to the Asset Purchase Agreement have been
omitted in accordance with Item 601(b)(2) of Regulation S-K, but will be
furnished to the Commission supplementally upon request. The contents of the
omitted Schedules and Exhibits are describer in the Asset Purchase Agreement.
