1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement"), dated August 4, 1998,
is by and among AmSurg Westlake, Inc., a Tennessee corporation ("AmSurg"),
AmSurg Corp., a Tennessee corporation and the owner of all the outstanding
capital stock of AmSurg ("ASC"), Westlake Eye Surgery Center, a California
partnership ("Westlake"), and the individual set forth on the signature pages
attached hereto ("Seller").
WHEREAS, AmSurg desires to purchase and Seller desires to sell certain
of Seller's 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, Seller shall sell, transfer,
convey, assign and deliver to AmSurg and AmSurg shall purchase, acquire and
accept from Seller an undivided 10% interest in the assets comprising the
business operations of the ophthalmic ambulatory surgery center (the "Center")
owned and operated by Westlake and located in Westlake Village, California,
tangible or intangible, recorded or unrecorded, known or unknown, of whatsoever
type, kind, description, or nature owned, leased, held, possessed, vested in or
claimed in whole or in part by Seller on the Closing Date (the "Purchased
Assets"), which Purchased Assets shall specifically include the accounts
receivable of the Center, but which shall specifically exclude cash and the
account receivable from Westlake Laser Surgery Center in the approximate amount
of $47,656.
1.2. ASSUMPTION OF LIABILITIES. Except as described in Schedule
1.2, AmSurg will not assume any debts, liabilities, obligations, expenses,
taxes, contracts or commitments of Seller, Westlake 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, Westlake's or the
Center's financial statements, books of account or records. Westlake and Seller
will indemnify AmSurg against and hold it harmless from any such Liabilities.
AmSurg will cause The Westlake Ophthalmology ASC, L.P., a Tennessee limited
partnership (the "Partnership"), to assume all Liabilities arising after the
effective date of the transaction which relate to supplies received by the
Center or services rendered to the Center after the effective date of the
transaction, regardless of the date such Liabilities arose.
ARTICLE 2. PURCHASE PRICE
The initial purchase price of the Purchased Assets (the "Initial
Purchase Price") shall be $341,978.00. The Initial Purchase Price shall be paid
(a) $297,521.00 in cash and (b) in 6698 shares of the Class A common stock of
ASC (the "AmSurg Common Stock").
AmSurg and Seller 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 financial statements for the Center for the calendar year 1997 and the
annualized procedure volume for Medicare cases performed in the Center from
January 1, 1998 through May 31, 1998, as set forth in Exhibit 2(a). Exhibit 2(b)
sets forth what the purchase price would have been without any adjustment for
the proposed Medicare reimbursement rate changes (the "Potential Purchase
Price"). The difference between the Initial Purchase Price and the Potential
Purchase Price (the "Purchase Price Differential") is set forth on Exhibit 2(c).
During the six (6) years following the Closing, at the end of each six
(6) month period, 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(c), 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 Exhibit 2(a) 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
2
Additional Purchase Price previously paid by AmSurg, AmSurg will pay in cash
such amount as additional consideration within sixty (60) days after such
determination. In no event will the purchase price recalculation cause (x)
Seller to return any portion of the purchase price previously paid to Seller 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 Bass, ▇▇▇▇▇ & ▇▇▇▇ PLC,
First American Center, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, within 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 August
31, 1998, or at such other time as shall be agreed upon by all the parties
hereto (the "Closing Date"). The Closing shall be effective as of August 4,
1998.
3.2. OBLIGATIONS OF THE PARTIES AT THE CLOSING.
(a) At the Closing, AmSurg shall deliver to Seller:
(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, ▇▇▇▇▇ & ▇▇▇▇ PLC, legal counsel
for AmSurg, the terms of which are substantially as set forth in Exhibit 11.4;
and
(v) such other certificates and documents as Seller or
its counsel may reasonably request.
(b) At the Closing, Westlake and Seller will deliver to AmSurg:
(i) a copy of resolutions of Westlake, executed by all of
its partners, authorizing the distribution to its partners of an aggregate
undivided 57% interest in the Purchased Assets, including the distribution of
the Purchased Assets to Seller, and the execution, delivery and performance of
this Agreement and the other documents referred to herein to be executed by
Westlake, and the consummation of the transactions contemplated hereby;
(ii) such deeds, bills of sale, endorsements, assignments
and other good and sufficient instruments of conveyance and transfer, in form
and substance reasonably satisfactory to AmSurg, as shall be effective to vest
in Seller an undivided 10% interest in Westlake's title to and interest in the
Purchased Assets, all of Westlake's books, records and other data relating to
the Purchased Assets (except partnership records and any other documents and
records which Westlake is required by law to retain in its possession), and,
simultaneously with such delivery, will take such steps as may be necessary to
put AmSurg in actual possession and operating control of the Purchased Assets;
(iii) a certificate of Westlake certifying as to the
accuracy of Westlake's representations and warranties at and as of the Closing
and that it has performed or complied with all of the covenants, agreements,
terms, provisions and conditions to be performed or complied with by Westlake at
or before the Closing;
(iv) such deeds, bills of sale, endorsements, assignments
and other good and sufficient instruments of conveyance and transfer, in form
and substance reasonably satisfactory to AmSurg, as shall be effective to vest
in AmSurg all of Seller's title to and interest in the Purchased Assets, all of
Seller's interest in books, records and other data relating to the Purchased
Assets (except partnership records and any other documents and records which
Westlake is required by law to retain in its possession), and, simultaneously
with such delivery, will take such steps as may be necessary to put AmSurg in
actual possession and operating control of the Purchased Assets;
(v) a certificate of Seller certifying as to the accuracy
of Seller's representations and warranties at and as of the Closing and that it
has performed or complied with all of the covenants, agreements, terms,
provisions and conditions to be
--------------------------------------------------------------------------------
Asset Purchase Agreement/Page 2
3
performed or complied with by Seller at or before the Closing;
(vi) the opinion of England, Whitfield, ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, LLP, legal counsel to Westlake and Seller, in substantially the form
of Exhibit 10.6;
(vii) an assignment for the benefit of the Partnership of
that certain lease for real property located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ in form and substance satisfactory to AmSurg;
and
(viii) such other certificates and documents as AmSurg or
its counsel may reasonably request.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES BY WESTLAKE
Westlake represents and warrants as follows:
4.1. ORGANIZATION. Westlake is a partnership organized under the
laws of the State of California with full power and authority to conduct its
business as now conducted and to own, lease or operate its properties and assets
as now owned, leased or operated.
4.2. AUTHORIZATION. Westlake has full power and authority to enter
into this Agreement and perform its obligations hereunder and carry out the
transactions contemplated hereby. The execution, delivery and performance by
Westlake of this Agreement, the distribution by Westlake of the Purchased Assets
to Seller and the consummation of the transactions contemplated hereby,
including the conveyance, assignment, transfer and delivery of the Purchased
Assets, have been duly authorized and approved by all necessary partnership and
partner action, and this Agreement, when executed, will constitute a valid and
binding obligation of Westlake enforceable against Westlake in accordance with
its terms.
4.3. NO VIOLATION. The execution and delivery of this Agreement and
the distribution of the Purchased Assets to Seller by Westlake 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 Westlake is a party or by which any of Westlake's assets or
properties are bound which violation or lien would have a material adverse
effect on the business or operations of Westlake or the Center; (b) violate any
provision of the partnership agreement of Westlake; (c) violate any order,
arbitration award, judgment, writ, injunction, decree, statute, rule or
regulation applicable to Westlake which violation would have a material adverse
effect on the business or operations of Westlake or the Center; or (d) violate
any other contractual or legal obligation or restriction to which Westlake is
subject which violation would have a material adverse effect on the business or
operations of Westlake or the Center.
4.4. FINANCIAL INFORMATION. Westlake has delivered to AmSurg:
statements of Center charges and cash receipts by month for the years ended
December 31, 1996 and December 31, 1997 attached hereto as Schedule 4.4(a), cash
basis unaudited statements of income for the Center for the years ended December
31, 1996 and December 31, 1997 attached hereto as Schedule 4.4(b), cash basis
unaudited balance sheets of the Center at December 31, 1997 and March 31, 1998
attached hereto as Schedule 4.4(c), and details of patient accounts receivable
for the Center at the Closing Date attached hereto as Schedule 4.4(d)
(hereinafter collectively referred to as "Financial Information"). The Financial
Information fairly presents the assets, liabilities, financial condition and
results of operation of the Center as at the respective dates thereof and for
the periods therein referred to, prepared on a cash basis and accurately
reflects the revenues and expenses of the Center for the periods covered thereby
and, in particular, reflects all expenses necessary for the efficient operation
of the Center as a stand-alone entity. The Financial Information reflects the
consistent application of such accounting principles throughout the periods
involved.
4.5. OWNERSHIP OF PURCHASED ASSETS. Westlake owns and possesses and
has good and marketable title to all of the Purchased Assets, free and clear of
all mortgages, pledges, liens, security interests, conditional sale agreements,
defects, charges, encumbrances and rights of third parties, and no conditions
exist which could give rise to any such mortgage, pledge, lien, security
interest, defect, charge, encumbrance on, or right of any such third party to,
the Purchased Assets.
Schedule 4.5 contains an accurate and complete description of the
Purchased Assets, which include, but are not limited to, supplies, inventory,
uncollected accounts receivable and equipment owned by Westlake, and which are
all of the assets which are in any way necessary to the continued operation of
the Center as it is
--------------------------------------------------------------------------------
Asset Purchase Agreement/Page 3
4
now being conducted. All of the Purchased Assets are in good working condition
and repair, normal wear and tear excepted, and are adequate for the uses for
which they are intended. Schedule 4.5 also sets forth the current book value of
all equipment included in the Purchased Assets.
Prior to Closing, Westlake has distributed to its partners an aggregate
undivided 57% interest in the Purchased Assets, including a 10% undivided
interest to Seller.
4.6. NO LIABILITIES OR ADVERSE CONDITIONS. Except as and to the
extent of the amounts specifically reflected in the Financial Information,
Westlake does not have any material liabilities or obligations of any nature
with respect to the Center, whether, absolute, accrued, contingent or otherwise
and whether due or to become due (including, without limitation, liabilities for
taxes and interest, penalties and other charges payable with respect thereto).
Furthermore, Westlake does not know or have reason to know of any basis
for the assertion against Westlake of any such liability or obligation of any
nature not fully reflected in the Financial Information. There are no conditions
existing with respect to any of Westlake's facilities, properties, assets or
personnel, which might materially and adversely affect any of the Center's
properties, business or prospects.
4.7. ABSENCE OF CERTAIN CHANGES. Since December 31, 1997, with
respect to the Center, Westlake has not:
(a) suffered any material adverse change in its working capital,
financial condition, assets, liabilities, business or prospects, or suffered any
material casualty loss (whether or not insured);
(b) made any change in its business or operations or in the manner
of conducting its business, other than changes in the ordinary course of
business;
(c) incurred any obligations or liabilities (whether absolute,
accrued, contingent or otherwise and whether due or to become due), except items
incurred in the ordinary course of business and consistent with past practice,
or experienced any change in any assumptions or methods of calculating any bad
debt, contingency or other reserve;
(d) paid, discharged or satisfied any claim, lien, encumbrance or
liability (whether absolute, accrued, contingent or otherwise and whether due or
to become due), other than claims, liens, encumbrances, or liabilities:
(i) which are reflected in the Financial Information and
which were paid, discharged or satisfied since the date thereof in the ordinary
course of business consistent with past practice, or
(ii) which were incurred and paid, discharged or satisfied
since December 31, 1997 in the ordinary course of business consistent with past
practice;
(e) written off as uncollectible any notes or accounts receivable
or any portion thereof, except for immaterial write-offs made in the ordinary
course of business consistent with past practice;
(f) canceled any other debts or claims, or waived any rights, of
substantial value;
(g) sold, transferred or conveyed any of its properties or assets,
except in the ordinary course of business consistent with past practice, other
than its distribution to its partners of an aggregate undivided 57% interest in
the Purchased Assets;
(h) made any capital expenditures or commitments in excess of
$10,000 in the aggregate for replacements or additions to property, plant,
equipment or intangible capital assets;
(i) declared, paid or made or set aside for payment of, any
distribution in respect of its outstanding partnership interests, other than
distributions made in the ordinary course of business consistent with past
practice, or directly or indirectly redeemed, purchased or otherwise acquired
any of its partnership interests, other than its distribution to its partners of
an aggregate undivided 57% interest in the Purchased Assets;
(j) made any change in any method of accounting or accounting
practice;
(k) granted any increase in the compensation of any officer,
employee or agent of Westlake who performs services for or on behalf of the
Center, (including without limitation any increase pursuant to any bonus,
pension, profit sharing or other plan or commitment), other than increases in
the ordinary course of business consistent with past practice, or adopted any
such plan or other arrangement; and no such
--------------------------------------------------------------------------------
Asset Purchase Agreement/Page 4
5
increase or the adoption of any such plan or arrangement, is planned or
required; and
(l) agreed, whether in writing or otherwise, to take any action
described in this Section 4.7.
4.8. TAXES. Westlake has filed all federal, state and local tax
returns required to be filed by it through the date hereof and has paid all
taxes and assessments (including, without limitation, income, excise,
unemployment, social security, occupation, franchise, property, sales and use
taxes, services taxes, import duties or charges, and all penalties and interest
with respect thereto) due and payable therefrom. Westlake has not signed any
extension agreement with any taxing authority and knows of no open or
questionable matters for any prior periods. All taxes and assessments relating
to or affecting the operations of the Center through the date hereof have been
paid.
4.9. LITIGATION. There is no claim, litigation, investigation or
proceeding pending or, to Westlake's knowledge, threatened 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 the Center. Schedule 4.9 sets forth a true and
accurate description of all claims, actions, investigations or proceedings
relating to the Center and its operations initiated since January 1, 1995.
4.10. COMPLIANCE WITH LAWS AND OTHER REGULATIONS. Westlake is in
compliance in all material respects with all requirements of applicable laws,
rules, regulations, orders, ordinances, judgments and decrees of all
governmental bodies or agencies (federal, state or local) (collectively, "Laws")
relating to or affecting the operations of the Center. Westlake has not received
any notice of, or notice of any investigation of, a possible violation of any
applicable Laws, or any other Law or requirement relating to or affecting the
operations of the Center.
Westlake has all required licenses, permits, certificates,
authorizations and agreements needed for the ownership and efficient operation
of the Center, all of which are listed on Schedule 4.10. Westlake knows of no
act or omission occurring on or before the date hereof which would subject
Westlake or the Center to the likelihood of any fine or suspension of any
license, permit, certificate, authorization or agreement.
4.11. CONTRACTS; SIGNIFICANT PAYORS. Schedule 4.11 is a complete and
accurate list of all individual Payors, or group of affiliated Payors, that
accounted for more than 5% of the Center's revenues in any two of the previous
three years or is expected to account for more than 5% of the Center's revenues
in the current year or the next year ("Significant Payors").
All contracts, agreements and instruments, including, but not limited
to, third party provider agreements and agreements with Significant Payors, to
which Westlake is a party and which are necessary for the ownership and
efficient operation of the Center, are in full force and effect; there have been
no threatened cancellations thereof nor outstanding disputes thereunder, and
Westlake has not breached any provision of, nor does there exist any default in
any material respect under, or event (including the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby)
which is, or with the giving of notice or the passage of time or both would
become, a breach or default in any material respect under the terms of any such
contract, instrument or agreement. Westlake has no reason to believe that any
Significant Payor intends to terminate any such contract, instrument or
agreement, or intends to withhold its consent to the assignment thereof, to the
Partnership by Westlake.
4.12. ACCOUNTS RECEIVABLE. All accounts and notes receivable of the
Center, whether reflected in the Financial Information or otherwise, represent
services actually provided in the ordinary course of business; all such
receivables are current and collectible in accordance with their respective
terms; and none of such receivables is subject to any counterclaim or set-off,
other than normal discounts, allowances and bad debts consistent with past
practice.
4.13. REPORTS AND RETURNS. All reports and returns heretofore
required by federal, state or municipal authorities with respect to the
operations of the Center and all reports and returns to the various governmental
authorities which control, directly or indirectly, any of the Center's
activities, have been filed and all sums heretofore due with respect to such
reports and returns have been paid.
4.14. DEFAULTS. Westlake 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,
agreement or other instrument with respect to the Center to which Westlake is a
party which default would have a material adverse effect on the business or
--------------------------------------------------------------------------------
Asset Purchase Agreement/Page 5
6
operations of the Center. The execution, delivery and performance by Westlake 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 with respect to the Center to which Westlake
is a party or by which Westlake is bound.
4.15. EMPLOYEES; INDEPENDENT CONTRACTORS.
(a) Schedule 4.15(a) sets forth the names and titles of all
employees of Westlake who perform services in or on behalf of the Center, and
the annual rate of compensation (including bonuses) being paid to each such
employee as of the most recent practicable date. The employees listed on
Schedule 4.15(a), constitute all of the employees who are in any way necessary
to the continued operation of the Center as it is now being conducted.
(b) Schedule 4.15(b) hereto contains a list of each employment,
bonus, deferred compensation, pension, stock option, stock appreciation right,
profit sharing or retirement plan, arrangement or practice and each other
agreement or fringe benefit plan, arrangement or practice of Westlake, whether
formal or informal, whether legally binding or not and whether affecting one or
more of its employees who perform services in or on behalf of the Center. Copies
of each such agreement or plan have hereto been delivered to AmSurg. Westlake
does not have any commitment, whether formal or informal, and whether legally
binding or not (i) to create any additional such agreement, plan, arrangement or
practice; (ii) to modify or change any such agreement, arrangement, plan or
practice; or (iii) to maintain for any period of time any such agreement,
arrangement, plan or practice, except as described on Schedule 4.15(b).
(c) Schedule 4.15(c) hereto contains a list of all services
provided to the Center for which Westlake contracts with third parties. Copies
of each such agreement previously have been provided to AmSurg. Schedule 4.15(c)
contains a description of each such oral agreement.
4.16. CONSENTS AND APPROVALS. Westlake has obtained all consents,
approvals, authorizations and orders of third parties, including governmental
authorities, necessary for the authorization, execution and performance of this
Agreement by Westlake, which consents, approvals, authorizations and orders are
listed on Schedule 4.16.
4.17. 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 Westlake, 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. Westlake
has not withheld from AmSurg disclosure of any event, condition or fact which
Westlake knows, or has reasonable grounds to know, may materially adversely
affect the Purchased Assets or the operations of the Center.
4.18. NO BROKER'S FEES. Westlake 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 Westlake does not know
of any claim by anyone for such a fee, commission, expense or charge.
4.19. PARTNERS OF WESTLAKE. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, M.D., ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
M.D., a Professional Corporation, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
M.D., a Professional Corporation, ▇▇▇▇▇ ▇▇▇▇▇, M.D., ▇▇▇▇ ▇. ▇▇▇▇▇, M.D. and
▇▇▇▇ ▇▇▇▇▇ constitute all of the partners of Westlake.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants as follows:
5.1. AUTHORITY. Seller 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.
5.2. NO VIOLATION. The execution and delivery of this Agreement by
Seller 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 Seller is a party or by which any of
Seller's assets or properties are bound; (b) violate any provision of the
partnership agreement of
--------------------------------------------------------------------------------
Asset Purchase Agreement/Page 6
7
Westlake; (c) violate any order, arbitration award, judgment, writ, injunction,
decree, statute, rule or regulation applicable to Seller; or (d) violate any
other contractual or legal obligation or restriction to which Seller is subject.
5.3. PARTNERS OF WESTLAKE. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, M.D., ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
M.D., a Professional Corporation, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
M.D., a Professional Corporation, ▇▇▇▇▇ ▇▇▇▇▇, M.D., ▇▇▇▇ ▇. ▇▇▇▇▇, M.D. and
▇▇▇▇ ▇▇▇▇▇ constitute all of the partners of Westlake.
5.4. OWNERSHIP OF PURCHASED ASSETS. Seller owns and possesses and
has good and marketable title to all of the Purchased Assets, free and clear of
all mortgages, pledges, liens, security interests, conditional sale agreements,
defects, charges, encumbrances and rights of third parties, and no conditions
exist which could give rise to any such mortgage, pledge, lien, security
interest, defect, charge, encumbrance on, or right of any such third party to,
the Purchased Assets.
Schedule 4.5 contains an accurate and complete description of the
Purchased Assets, which include, but are not limited to, supplies, inventory,
uncollected accounts receivable and equipment owned by Seller, and which are all
of the assets which are in any way necessary to the continued operation of the
Center as it is now being conducted. All of the Purchased Assets are in good
working condition and repair, normal wear and tear excepted, and are adequate
for the uses for which they are intended. Schedule 4.5 also sets forth the
current book value of all equipment included in the Purchased Assets.
Seller owns an undivided 10% interest in the Purchased Assets.
5.5. TAXES. Seller has filed all federal, state and local tax
returns required to be filed by it through the date hereof and has paid all
taxes and assessments (including, without limitation, income, excise,
unemployment, social security, occupation, franchise, property, sales and use
taxes, services taxes, import duties or charges, and all penalties and interest
with respect thereto) due and payable therefrom. Seller has not signed any
extension agreement with any taxing authority and knows of no open or
questionable matters for any prior periods. All taxes and assessments relating
to or affecting the operations of the Center through the date hereof have been
paid.
5.6. LITIGATION. There is no claim, litigation, investigation or
proceeding pending or, to Seller's knowledge, threatened at law or in equity or
before any court, legislative or administrative tribunal or governmental agency
which questions the validity of this Agreement.
5.7. DEFAULTS. The execution, delivery and performance by Seller 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 Seller is a party or by which Seller
is bound.
5.8. CONSENTS AND APPROVALS. Seller has obtained all consents,
approvals, authorizations and orders of third parties, including governmental
authorities, necessary for the authorization, execution and performance of this
Agreement by Seller, which consents, approvals, authorizations and orders are
listed on Schedule 4.16.
5.9. ACQUISITION FOR INVESTMENT. Seller represents that Seller is
acquiring the AmSurg Common Stock for Seller's own account for investment with
no present intention of reselling any such AmSurg Common Stock, and not with a
view to the resale or distribution in whole or in part thereof in violation of
the Securities Act of 1933, as amended (the "Securities Act").
5.10. SUITABILITY OF INVESTMENT. Seller has carefully considered and
has, to the extent Seller believes necessary, obtained professional legal, tax
and financial advice concerning the suitability of Seller's acquisition of the
AmSurg Common Stock for its particular tax and financial situation. Seller is
capable of evaluating and has evaluated carefully the merits and risks of
Seller's purchase of the AmSurg Common Stock and is able to bear the economic
risk of an investment therein.
5.11. ACCESS TO INFORMATION. Seller has had access during the course
of this transaction and prior to its purchase of the AmSurg Common Stock to such
information relating to AmSurg and ASC as it has desired. It has had the
opportunity to ask questions of and receive answers from AmSurg and ASC and
their representatives concerning the terms and conditions of the acquisition of
the AmSurg Common Stock and to obtain such additional information about the
business and financial condition of AmSurg and ASC as Seller has
--------------------------------------------------------------------------------
Asset Purchase Agreement/Page 7
8
requested (to the extent that AmSurg or ASC possessed such information or could
acquire it without unreasonable effort or expense).
5.12. RESTRICTIONS ON TRANSFER OF THE AMSURG COMMON STOCK. Seller
understands that the AmSurg Common Stock has not been registered under the
Securities Act or any applicable state securities law, and may not be
transferred or sold unless it is subsequently registered under the Securities
Act or an exemption from such registration is available.
5.13. LEGEND ON CERTIFICATES. Seller is aware that the certificates
representing the AmSurg Common Stock shall bear the following legend and that
appropriate stop transfer instructions will be entered in the stock records of
ASC:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT") OR
ANY APPLICABLE STATE SECURITIES LAW. THE SHARES HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO OR FOR RESALE IN CONNECTION WITH THE
DISTRIBUTION THEREOF. NO DISPOSITION OF THE SHARES MAY BE MADE IN THE
ABSENCE OF (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR (ii) AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
DISPOSITION WITHOUT REGISTRATION IS IN COMPLIANCE WITH THE SECURITIES
ACT.
5.14. 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 Seller, 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. Seller
has not withheld from AmSurg disclosure of any event, condition or fact which
Seller knows, or has reasonable grounds to know, may materially adversely affect
the Purchased Assets or the operations of the Center.
5.15. NO BROKER'S FEES. Seller 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 Seller does not know
of any claim by anyone for such a fee, commission, expense or charge.
5.16. RESTRICTIVE COVENANTS; CONFIDENTIALITY. Seller 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 business or
entity competing with the Partnership within 25 miles of the Center until the
later of (a) one (1) year after the Seller ceases to be a partner of Westlake or
(b) five (5) years for the date of the Agreement of Limited Partnership. The
foregoing shall not prohibit Seller 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. Seller recognizes and acknowledges that the ascertainment of
damages in the event of a breach of this Section 5.16 would be difficult, and
agrees 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 5.16 does not require Seller to perform ophthalmic 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.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF AMSURG
AmSurg represents and warrants as follows:
6.1. 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.
6.2. AUTHORIZATION. AmSurg has full corporate power and corporate
authority to enter into this
--------------------------------------------------------------------------------
Asset Purchase Agreement/Page 8
9
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.
6.3. 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.
6.4. 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.
6.5. 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.
6.6. 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 to have 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.
6.7. 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
control, directly or indirectly, any of its activities, and has paid all sums
heretofore due with respect to such reports and returns.
6.8. 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.
6.9. CORPORATE DOCUMENTS. AmSurg has made available to Seller for
inspection by Seller and his 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, meeting, actions and
consents of the shareholders and the board of directors (and any committees
thereof) of AmSurg.
6.10. FULL DISCLOSURE. Neither this Agreement, nor any Schedule,
exhibit, list, certificate or other instrument or document delivered to Seller
pursuant to this Agreement by or on behalf of AmSurg contains
--------------------------------------------------------------------------------
Asset Purchase Agreement/Page 9
10
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.
6.11. 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.
ARTICLE 7. REPRESENTATIONS AND WARRANTIES OF ASC
ASC represents and warrants as follows:
7.1. ORGANIZATION. ASC is a corporation duly organized, validly
existing and in good standing under the laws of the State of Tennessee. ASC 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.
7.2. AUTHORIZATION. ASC 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 ASC of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized and approved by all necessary
corporate action. The Agreement, when executed, will constitute a legal, valid
and binding obligation of ASC enforceable against it in accordance with its
terms.
7.3. CORPORATE DOCUMENTS. ASC has made available to Seller for
inspection by Seller and his authorized representatives, a copy of its Charter,
as amended to the date hereof, certified to be a true and correct thereof by the
Secretary of State of Tennessee.
7.4. FULL DISCLOSURE. Neither this Agreement, nor any exhibit,
list, certificate or other instrument or document delivered to Seller pursuant
to this Agreement, by or on behalf of ASC, 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.
7.5. VALID ISSUANCE. All shares of AmSurg Common Stock issued to
Seller on the Closing Date will be validly issued, fully paid and nonassessable.
ARTICLE 8. COVENANTS AND AGREEMENTS OF WESTLAKE AND SELLER
Westlake and Seller 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:
8.1. ACCESS; FURTHER ASSURANCES.
(a) Westlake 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,
Westlake and Seller agree to execute and deliver such certificates and documents
as may be required in connection with any audit of the Center or its operations.
(b) From the date hereof until the Closing, as soon as reasonably
practicable after the end of each quarter, but not later than the 15th day of
the next succeeding month, Westlake will deliver to AmSurg an unaudited
statement of income for the Center for the quarter and the period then ended,
and an unaudited balance sheet and a detail of patient accounts receivable for
the Center as at the quarter then ended ("Ongoing Quarterly Financial
Information"). In addition, as soon as reasonably practicable after the end of
each month, but not later than the 15th day of the next succeeding month,
Westlake will deliver to AmSurg a statement of (i) the number of procedures
performed, (ii) the billed charges, and (iii) the cash collections, all with
respect to the prior month ("Ongoing Monthly Financial Information") (the
Ongoing Quarterly Financial Information and the Ongoing Monthly Financial
Information are collectively referred to as the "Ongoing Financial
Information"). All such Ongoing Financial Information shall be prepared in
--------------------------------------------------------------------------------
Asset Purchase Agreement/Page 10
11
accordance with generally accepted accounting principles consistent with prior
practice.
(c) At any time and from time to time after the Closing, at
AmSurg's request and without further consideration, Seller 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.
(d) At any time and from time to time after the Closing, at
AmSurg's request and without further consideration, Westlake 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.
8.2. CONFIDENTIALITY.
(a) In the event the transactions contemplated by this Agreement
are not consummated for any reason, Westlake and Seller promptly will return to
AmSurg and ASC all records and information provided to them from AmSurg and ASC,
and Westlake and Seller will treat all such records and information as
confidential.
(b) Except as otherwise required by law, Westlake and Seller will
not disclose at any time to any other person not an employee of AmSurg, ASC,
Westlake or Seller (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.
8.3. CONDUCT OF BUSINESS PENDING THE CLOSING. From the date hereof
until the Closing, and except as otherwise consented to by AmSurg in writing,
Westlake and Seller shall not:
(a) fail to maintain in effect adequate insurance coverage of the
Purchased Assets; or
(b) fail to use their best efforts to (i) maintain the Purchased
Assets in their present condition, (ii) comply with all applicable laws, rules
and regulations of governmental agencies or authorities, and (iii) operate its
business in the manner necessary to maintain the good will of its patients and
physicians and its reputation.
8.4. INSURANCE. Westlake will use its best efforts to include
AmSurg and the Partnership as additional insureds on Westlake's professional
liability, general property and workers' compensation insurance policies, and
will provide AmSurg with written evidence of such coverage. AmSurg will pay the
additional cost, if any, for such insurance coverage, additional cost.
8.5. TRANSFER OF SIGNIFICANT PAYOR AGREEMENTS. Westlake and Seller
will take all action necessary in order to effect the valid assignment to the
Partnership of all agreements with Significant Payors effective as of the
Closing Date or within a reasonable time thereafter.
8.6. NOTICE OF ADVERSE CHANGE. Westlake and Seller will advise
AmSurg in writing of any material adverse change in the Purchased Assets from
the date of this Agreement to the Closing Date.
8.7. SCHEDULES. Westlake and Seller shall have the continuing
obligation to supplement or amend promptly the Schedules being delivered by
Westlake or Seller 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 9. COVENANTS AND AGREEMENTS OF AMSURG AND ASC
AmSurg and ASC further covenant and agree that from the date hereof
until the Closing, unless otherwise consented to by Seller in writing, they will
fulfill the following covenants and agreements:
9.1. CONFIDENTIALITY.
(a) In the event the transactions contemplated by this Agreement
are not consummated for any reason, AmSurg and ASC promptly will return to
Seller all records and information provided to AmSurg and ASC from Seller, and
AmSurg and ASC will treat all such records and information as confidential.
--------------------------------------------------------------------------------
Asset Purchase Agreement/Page 11
12
(b) Except as otherwise required by law, AmSurg will not disclose
at any time to any other person not an employee of AmSurg, ASC or Seller (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.
9.2. NOTICE OF ADVERSE CHANGE. AmSurg and ASC each will notify
Seller in writing of any material adverse change in the business, assets,
operations, conditions or prospects of AmSurg or ASC, as the case may be, from
the date of this Agreement to the Closing Date.
9.3. 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 10. CONDITIONS TO AMSURG'S AND ASC'S OBLIGATIONS
AmSurg and ASC 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 and ASC) prior to or at
the Closing:
10.1. COMPLIANCE. The representations and warranties made by
Westlake and Seller in this Agreement and the statements contained in the
Schedules attached hereto or in any instrument, list, certificate or writing
delivered by Westlake or Seller 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.
10.2. PERFORMANCE BY WESTLAKE AND SELLER. Westlake and Seller 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.
10.3. CERTIFICATE OF SELLER. Seller shall have delivered to AmSurg a
certificate, dated the Closing Date, certifying as to the fulfillment by Seller
of the conditions specified in Sections 10.1 and 10.2 hereof.
10.4. CERTIFICATE OF WESTLAKE. Westlake shall have delivered to
AmSurg a certificate, dated the Closing Date, certifying as to the fulfillment
by Westlake of the conditions specified in Sections 10.1 and 10.2 hereof.
10.5. CONSENTS AND LICENSES. All necessary consents, licenses,
permits, approvals, authorizations, orders and agreements from federal, state
and local governmental units and any other entity which are listed on Schedule
4.16, including approval by the California Department of Health Services and by
applicable Medicare and state Medicaid agencies, for the continued operation and
third-party reimbursement of the Center by the Partnership following the
consummation of the transactions contemplated hereby, shall have been issued to
the Partnership or notice of issuance shall have been provided.
10.6. OPINION OF COUNSEL. AmSurg shall have been furnished with the
opinion of England, Whitfield, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP, counsel to Westlake
and Seller, in substantially the form of Exhibit 10.6.
10.7. LEASE. AmSurg shall have been furnished with an assignment for
the benefit of the Partnership of that certain lease for real property located
at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ in form
and substance satisfactory to AmSurg.
10.8. OFFERING MEMORANDUM. Seller shall have received an offering
memorandum relating to the AmSurg Common Stock and the Partnership. Seller shall
have executed and delivered to ASC an offeree questionnaire in form and
substance reasonably satisfactory to ASC and its counsel.
10.9. SIGNIFICANT PAYOR AGREEMENTS. All of the Significant Payor
agreements shall have been validly assigned to the Partnership or Seller and
AmSurg shall have no reason to believe that any such agreement with a
Significant Payor will not be approved or that such Significant Payor will not
execute a new agreement with the Partnership on terms reasonably acceptable to
AmSurg.
10.10. SHAREHOLDER APPROVAL. All of the shareholders of Seller shall
have approved the transactions contemplated by this Agreement, and Seller shall
have furnished AmSurg with a certificate of the President of Seller evidencing
such approval.
--------------------------------------------------------------------------------
Asset Purchase Agreement/Page 12
13
10.11. PARTNER APPROVAL. All of the partners of Westlake shall have
approved the transactions contemplated by this Agreement and Westlake shall have
furnished AmSurg with a resolution of Westlake executed by each partner
evidencing such approval.
10.12. FORM 8594. AmSurg initially will allocate the Purchase Price
using the methodology reflected on Exhibit 10.12. In the course of completing
ASC's consolidated federal income tax return, AmSurg shall provide Seller with
an IRS Form 8594.
ARTICLE 11. CONDITIONS TO WESTLAKE'S AND SELLER'S OBLIGATIONS
Westlake and Seller 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 Seller) prior to
or at the Closing:
11.1. COMPLIANCE. The representations and warranties made by AmSurg
and ASC in this Agreement and the statements contained in the Schedules attached
hereto or in any instrument, list, certificate or writing delivered by AmSurg
and ASC 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.
11.2. PERFORMANCE BY AMSURG AND ASC. AmSurg and ASC shall have
performed and complied with all agreements, obligations and conditions required
by this Agreement to be so complied with or performed by AmSurg and ASC.
11.3. CERTIFICATE OF AMSURG AND ASC. AmSurg and ASC each shall have
delivered to Seller a certificate, dated the Closing Date, certifying as to the
fulfillment of the conditions specified in Sections 11.1 and 11.2 hereof.
11.4. OPINION OF COUNSEL. Seller shall have been furnished the
opinion of Bass, ▇▇▇▇▇ & ▇▇▇▇ PLC, counsel to AmSurg and ASC, in substantially
the form of Exhibit 11.4.
11.5. LEASE. Westlake and landlord shall have entered into an
assignment for the benefit of the Partnership of that certain lease for real
property located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇.
ARTICLE 12. INDEMNIFICATION
12.1. INDEMNIFICATION BY WESTLAKE AND SELLER. Westlake and Seller,
jointly and severally, hereby agree to defend, indemnify and hold harmless
AmSurg and ASC and shall reimburse AmSurg and ASC 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 Westlake or Seller contained herein, any Schedule hereto or in any
certificate, document or instrument delivered to AmSurg and ASC pursuant hereto.
(b) Any tax liability of Westlake, Seller or the Center not
previously paid, which may at any time be asserted or assessed against Westlake,
Seller or 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 Westlake, Seller or the
Center to any governmental third party or private payors because of overpayments
to Westlake, Seller or 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.
(d) Any other Loss incidental to any of the foregoing.
12.2. INDEMNIFICATION BY AMSURG AND ASC. AmSurg and ASC, severally
and not jointly, hereby agree to defend, indemnify and hold harmless Westlake
and Seller, and shall reimburse Westlake and Seller 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 or ASC, as the case may be, contained herein or in any certificate,
document or instrument delivered to Westlake and Seller pursuant hereto.
--------------------------------------------------------------------------------
Asset Purchase Agreement/Page 13
14
(b) Any other Loss incidental to the foregoing.
12.3. 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 12.1 or 12.2 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, ASC, Westlake and Seller 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 or ASC against Westlake with
respect to Section 12.1 hereof may in AmSurg's discretion be discharged by
setoff against any amounts owed or owing to Westlake under the Agreement of
Limited Partnership between Westlake and AmSurg.
(c) Notwithstanding the foregoing, Seller shall not be required to
indemnify AmSurg or ASC for any amount in excess of the Purchase Price.
(d) Notwithstanding the foregoing, Westlake and Seller shall not
be obligated to make any indemnification under Section 12.1 unless the aggregate
amount of Losses exceeds $10,000 (the "Basket"), and such indemnification with
respect to such Losses shall be made by Westlake and Seller only to the extent
of such excess over the Basket.
ARTICLE 13. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
13.1. 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 24 months after the Closing Date (except for any Losses
described in Section 12.1(b), which shall survive for the applicable statute of
limitations, including any waivers thereof, Section 12.1(c), which shall not
terminate, and any breach of the representations and warranties contained in
Sections 4.6 and 4.9 with respect to professional malpractice claims arising
before the Closing Date, which shall not terminate).
In addition, in the event that all of the Partnership, AmSurg, ASC, or
their successors or assigns, dissolves, liquidates or otherwise ceases to exist,
the provisions of Section 5.16 hereof shall terminate and be of no further force
or effect.
13.2. 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 14. TERMINATION OF AGREEMENT
This Agreement may be terminated at any time prior to the Closing:
(a) by mutual agreement of Seller and AmSurg;
(b) by AmSurg, if there has been a material violation or breach by
Westlake or Seller 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 10 hereof have not been satisfied by the
Closing or have not been waived in writing by AmSurg;
(c) by Seller, if there has been a material violation or breach by
AmSurg or ASC of any of the
--------------------------------------------------------------------------------
Asset Purchase Agreement/Page 14
15
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 11
hereof have not been satisfied by the Closing or have not been waived in writing
by Seller;
(d) By either AmSurg or Seller if the transactions contemplated by
this Agreement shall not have been consummated on or before August 31, 1998; or
(e) By either AmSurg or Seller 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 15. MISCELLANEOUS
15.1. EXPENSES. All fees and expenses incurred by Westlake and
Seller, including without limitation, legal fees and expenses, in connection
with this Agreement will be borne by Westlake and Seller and all fees and
expenses incurred by AmSurg and ASC, including without limitation, legal fees
and expenses, in connection with this Agreement will be borne by AmSurg and ASC.
15.2. 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 Seller 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) Westlake and Seller 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.
15.3. ENTIRE AGREEMENT; AMENDMENTS. 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.
15.4. 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.
15.5. 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 Westlake:
Westlake Eye Surgery Center
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:_____________________
with a copy to:
England, Whitfield, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
--------------------------------------------------------------------------------
Asset Purchase Agreement/Page 15
16
If to Seller:
Westlake Eye Surgery Center
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:_____________________
with a copy to:
England, Whitfield, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
If to AmSurg or ASC:
AmSurg Westlake, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
with a copy to:
Bass, ▇▇▇▇▇ & ▇▇▇▇ PLC
First American Center
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, 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.
15.6. 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.
15.7. 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,
ASC, Westlake and Seller. All of such executed counterparts shall constitute one
and the same instrument.
15.8. 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.
15.9. 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.
--------------------------------------------------------------------------------
Asset Purchase Agreement/Page 16
17
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
AMSURG WESTLAKE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary
AMSURG CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Sr. V.P. and Secretary
WESTLAKE EYE SURGERY CENTER
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Partner
By his execution of this Agreement, Seller hereby consents to the
execution hereof by Westlake and agrees to be bound by the provisions of Section
5.16 hereof:
SELLER
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, M.D.
-----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, M.D.
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 described in the Asset Purchase Agreement.
--------------------------------------------------------------------------------
Asset Purchase Agreement/Page 17