1
Exhibit 10.14
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STOCK PURCHASE AGREEMENT
BY AND AMONG
AMERIPATH, INC.,
GULF COAST PATHOLOGY ASSOCIATES, INC.
F/K/A
XXXXXXXXX & KALEMERIS, M.D., P.A.,
XXXXXXX XXXXXXXXX, M.D.,
AND
XXXXXX XXXXXXXXX, M.D.
DATED AS OF OCTOBER 31, 1996
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TABLE OF CONTENTS
PAGE NO.
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ARTICLE I
PURCHASE OF CAPITAL STOCK
1.1 Purchase and Sale of Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 The Contingent Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.3 Contingent Issuance of AmeriPath Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND GULF COAST
2.1 Corporate Organization, Qualification, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.2 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.3 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.4 Corporate Record Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.5 Title to Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.6 Options and Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.7 Authorization, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.8 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.9 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.10 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.11 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.12 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.13 True and Complete Copies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.14 Title and Related Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.15 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.16 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.17 Compliance with Law and Applicable Government Regulations . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.18 ERISA and Related Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.19 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.20 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.21 Dealings with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.22 Banking Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.23 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.24 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.25 Investment Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.26 Accounts Receivable; Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.27 Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.28 Improper and Other Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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2.29 Participation in Audits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.30 Health Care Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.31 Financial Condition at Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.32 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
3.1 Corporate Organization, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.2 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.3 Authorization, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.4 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.5 Governmental Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.6 Issuance of AmeriPath Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.7 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE IV
COVENANTS OF THE SELLERS
4.1 Regular Course of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.2 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.3 Capital Changes; Pledges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.4 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.5 Capital and Other Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.6 Cash and Cash Equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.7 Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.8 Other Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.9 Amendments to Charter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.10 Interim Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.11 Full Access and Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.12 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.13 Breach of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.14 Fulfillment of Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE V
COVENANTS OF THE PURCHASER
5.1 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.2 Full Access and Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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ARTICLE VI
OTHER AGREEMENTS
6.1 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.2 Agreement to Defend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.3 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.4 No Solicitation or Negotiation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.5 No Termination of Sellers' Obligations by Subsequent Incapacity, Etc. . . . . . . . . . . . . . . . . . . . 34
6.6 Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.7 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.8 Deliveries After Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.9 Non-Competition Covenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.10 Non-disclosure; Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.11 Rule 144 Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.12 Collected Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER
7.1 Representations and Warranties; Covenants and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.2 No Injunction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.3 Third Party Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.4 Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.5 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.6 Opinion of Sellers' Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.7 Employment Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.8 Delivery of Gulf Coast Share Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.9 Shareholders' Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.10 Subordination Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.11 Gulf Coast Charter Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.12 Satisfaction of Indebtedness; Creditor Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.13 Vehicles and Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF THE SELLERS
8.1 Representations and Warranties; Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.2 No Injunction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.3 Purchase Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.4 Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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ARTICLE IX
CLOSING
9.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
9.2 Closing Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE X
TERMINATION AND ABANDONMENT
10.1 Methods of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
10.2 Procedure Upon Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE XI
SURVIVAL OF TERMS; INDEMNIFICATION
11.1 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
11.2 Indemnification by the Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
11.3 Indemnification by the Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
11.4 Third-Party Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
11.5 Deductible . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Amendment and Modification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
12.2 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
12.3 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
12.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
12.5 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.7 Consent to Jurisdiction; Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.8 Injunctive Relief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
12.10 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
12.11 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
12.12 Delays or Omissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
12.13 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
12.14 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
12.15 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
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SCHEDULES
1.1 Consideration
1.3 Stock Rights
2.1 Jurisdictions of Qualification
2.9(a) Additional Liabilities
2.9(b) Liabilities covered by Insurance
2.9(c) Accounts Payable
2.11 Distributions
2.12 Contracts
2.14 Real Property
2.16 Tax Matters
2.17(a) Permits and Licenses
2.17(b) Jurisdictions Licensed to Provide Health Care
2.18 ERISA, Benefit Plans and Other Matters
2.19 Intellectual Property
2.19(d) Software
2.20 Environmental Matters
2.21 Affiliated Transactions
2.22 Banking Arrangements
2.23 Insurance
2.24 Consents
2.26 Accounts Receivable
2.28 Improper Payments
2.29 Participation in Audits
2.30(a) Fraud and Abuse
2.30(b) Third-Party Payors
2.30(c) Medicare and Medicaid Compliance
2.30(d) Rate Limitations and Rates
3.2 Subsidiaries of AmeriPath
7.3 Third Party Consents
7.4 Regulatory Approvals
7.12 Creditor Consents
7.13 Vehicles and Personal Property
EXHIBITS
1.2 Form of 7% Non-Negotiable Subordinated Contingent Promissory Note
2.1 Gulf Coast's Articles of Incorporation, as amended, and By-laws
2.9 Gulf Coast Financial Statements
3.7 AmeriPath Financial Statements
6.6 Form of Employment Agreement
7.6 Opinion of Seller's Counsel
7.10 Subordination Agreement
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the " Agreement") is dated as of
October__, 1996, by and among AMERIPATH, INC., a Delaware corporation, or its
permitted assigns ("AmeriPath" or the "Purchaser"), GULF COAST PATHOLOGY
ASSOCIATES, INC., a Florida corporation f/k/a XXXXXXXXX & KALEMERIS, M.D., P.A.
("Gulf Coast"), and all of the shareholders of Gulf Coast (set forth on Schedule
1.1 hereto) who together hold two thousand (2,000) shares, par value $1.00 per
share, of Gulf Coast (each shareholder shall be referred to herein as the
"Seller" and collectively, the "Sellers").
WHEREAS, the Sellers own all of the issued and outstanding shares of
capital stock of Gulf Coast; Gulf Coast, although presently organized as a
professional service corporation under Chapter 621 of the Florida Statutes,
will, immediately prior to the closing of the transactions contemplated by this
Agreement, upon the terms and subject to the conditions set forth herein,
convert itself to a regular business corporation organized under Chapter 607 of
the Florida Statutes;
WHEREAS, AmeriPath desires to purchase and acquire from the Sellers,
and the Sellers desire to sell, transfer and deliver to AmeriPath, all of the
issued and outstanding shares of capital stock of Gulf Coast, upon the terms
and subject to the conditions set forth herein;
WHEREAS, although the parties hereto have agreed as to the minimum
value of Gulf Coast, they are not able to agree as to the total value of Gulf
Coast, and thus the parties hereto have agreed to certain additional contingent
purchase price consideration based upon the results of operations of Gulf Coast
as more fully set forth herein; and
WHEREAS, following the closing of the transactions contemplated by
this Agreement, (i) Gulf Coast shall be and become a wholly-owned subsidiary of
AmeriPath, and (ii) such wholly-owned subsidiary shall be merged with and into
another wholly-owned subsidiary of AmeriPath, AmeriPath Florida, Inc.
("AmeriPath Florida"), with AmeriPath Florida surviving such merger.
NOW, THEREFORE, for and in consideration of the mutual benefits to be
derived hereby and the premises, representations, warranties, covenants and
agreements herein contained, AmeriPath, the Sellers and Gulf Coast hereby
agree, intending to be legally bound, as follows:
ARTICLE I
PURCHASE OF CAPITAL STOCK
1.1 Purchase and Sale of Capital Stock.
(a) Subject to the terms and conditions of this
Agreement, the Sellers agree to sell, transfer and deliver to the
Purchaser, and the Purchaser agrees to purchase, acquire
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and accept delivery from the Sellers, all of the issued and
outstanding capital stock of Gulf Coast (the "Gulf Coast Shares")
owned or held by such Seller, which number of Gulf Coast Shares to be
sold and purchased hereunder is set forth opposite each such Seller's
name on Schedule 1.1 attached hereto.
(b) Upon the sale, transfer and delivery to the Purchaser
by the Sellers of the Gulf Coast Shares at the Closing (as such term
is defined in Section 9.1 hereof), and in consideration therefor,
AmeriPath shall deliver to the Sellers the following consideration in
the aggregate (which aggregate consideration shall be divided between
the Sellers in the amounts and as indicated on Schedule 1.1 attached
hereto) (the "Purchase Price"):
(i) EIGHT MILLION FIVE HUNDRED THOUSAND DOLLARS
($8,500,000.00), by cashier's check or by wire transfer;
(ii) Certificates evidencing 200,000 shares of
Common Stock, par value $.01 per share, of AmeriPath (the
"AmeriPath Stock");
(iii) Two (2) 7% Non-Negotiable Subordinated
Contingent Promissory Notes, in the form attached hereto as
Exhibit 1.2 (the "Contingent Notes"), in the aggregate maximum
principal amount of SIX MILLION SEVEN HUNDRED FIFTY THOUSAND
DOLLARS ($6,750,000.00) ($3,375,000.00 for each Seller), the
issuance and certain terms and conditions of which Contingent
Notes are set forth in Section 1.2 below; and
(iv) Up to 450,000 shares of AmeriPath Stock,
issuable over five years subject to the satisfaction of
certain contingencies, subject to and in accordance with
Section 1.3 hereof.
(c) Additional Purchase Price. The parties hereto agree
to increase the Purchase Price by the amount by which the Closing Date
Receivables (as defined in Section 6.12) which are collected by the
Purchaser (the "Collected Receivables") exceed $960,000. Such amount
shall be additional Purchase Price and shall be paid to the Sellers
pro rata.
(d) Documentary Stamp Taxes. The Purchaser hereby
acknowledges that it is its belief that Florida law does not require
the payment of documentary stamp taxes in connection with the
execution and delivery of the Contingent Notes due to the contingent
nature of the obligation. Notwithstanding the foregoing, the
Purchaser agrees to pay any and all such documentary stamp taxes, or
other similar taxes, if any, that may become due or payable in
connection with the execution and delivery of the Contingent Notes or
this Agreement, and the Purchaser agrees to indemnify and hold
harmless the Sellers and Gulf Coast from and against any and all such
taxes. The Purchaser shall also be responsible for and shall pay all
Florida documentary stamp taxes due and payable and required to be
affixed with respect to the contingent issuance of AmeriPath Stock.
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1.2 The Contingent Notes.
(a) Principal Amounts; Issuance. The aggregate maximum
principal amount of the Contingent Notes to be issued and delivered by
the Purchaser to the Sellers pursuant to Section 1.1(b)(iii) hereof at
the Closing shall be SIX MILLION SEVEN HUNDRED FIFTY THOUSAND DOLLARS
($6,750,000.00) ($3,375,000.00) for each Seller). At the Closing, the
Purchaser shall deliver to each Seller a Contingent Note, due on
December 31, 2001, which Contingent Notes shall be in the form of
Exhibit 1.2 hereto. The Contingent Notes shall be due and payable in
the applicable principal amount specified in or calculated pursuant to
the Contingent Notes and the Annexes to such Contingent Notes (the "
Appropriate Principal Amount") corresponding to a target range of
Operating Earnings (as defined below) or Cumulative Operating Earnings
(as defined below), as the case may be, specified in the Contingent
Notes and the Annexes thereto, with respect to each of the five
periods ending September 30, 1997 through September 30, 2001, if, and
only if, (i) with respect to the twelve months ending September 30,
1997, Operating Earnings for such year equal or exceed the specified
minimum target amount of $2,450,000.00 (the "Year-1 Minimum Target")
or, (ii) with respect to the 24 month period ending September 30,
1998, the 36 month period ending September 30, 1999, the 48 month
period ending September 30, 2000 and the 60 month period ending
September 30, 2001, Cumulative Operating Earnings for such periods
equal or exceed $4,900,000.00, $7,350,000.00, $9,800,000.00 and
$12,250,000.00, respectively (together with the Year-1 Minimum Target,
as relevant to the applicable period, the "Minimum Targets"). In the
event that AmeriPath elects to sell or terminate one or more of the
clinical laboratory operations of Gulf Coast, the parties shall use
their best efforts to agree upon equitable adjustments to the Minimum
Targets with respect to all periods that follow such change. For each
of the periods ending September 30, 1997 through September 30, 2001
for which Operating Earnings or Cumulative Operating Earnings, as the
case may be, are less than the applicable Minimum Target, no principal
payment(s) shall be required, due or made under the Contingent Notes,
with respect to that period, and any and all interest with respect
thereto or accrued thereon, which otherwise would have become due or
payable had the applicable Minimum Target been achieved for such
period, shall be canceled and voided. Notwithstanding anything to the
contrary herein or in the Contingent Notes, the aggregate maximum
principal amount due or payable under the Contingent Notes shall not
exceed $6,750,000.00.
(b) "Operating Earnings"; "Cumulative Operating
Earnings".
(i) Definition of "Operating Earnings". For
purposes hereof (and Section 1.3 and the Contingent Notes),
the term "Operating Earnings", with respect to any period,
shall mean the income of or attributable to Gulf Coast, which
following the Closing shall be a division of AmeriPath, for
such full twelve month period (i.e., October 1 through
September 30), before deduction for (in each case, with
respect to Gulf Coast) (i) interest accrued or paid in such
year, (ii) income tax payable for such year, (iii) charges for
amortization of goodwill, including
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without limitation any amortization of goodwill recorded in connection
with this transaction or amortization of any payments made under the
Contingent Notes, (iv) any extraordinary items, as such term is used
in accordance with GAAP (as defined in Section 12.3 hereof), with
respect to Gulf Coast, and (v) any fees or expenses incurred by Gulf
Coast in connection with the transactions contemplated by this
Agreement. All such calculations shall be determined in accordance
with GAAP. For purposes hereof (and Section 1.3 and the Contingent
Notes), the term "Gulf Coast," with respect to Operating Earnings or
Cumulative Operating Earnings, shall mean and include the business,
operations, contracts, assets and liabilities of Gulf Coast (as such
is constituted immediately prior to the Closing), which following the
Closing shall consist of the business, operations, contracts, assets
and liabilities of, and the results of operations, revenues and
expenses associated with, (i) the contracts with hospitals and medical
facilities in effect from time to time, to which Gulf Coast, prior to
the Closing, and AmeriPath Florida, following the Closing, is a party,
and which are serviced by the physicians who from time to time are
employed by AmeriPath Florida and who report to the managing director
for AmeriPath Florida's Gulf Coast Division (as defined below)
(collectively, such physicians being referred to herein as the "Gulf
Coast-Based Pathologists"), and (ii) AmeriPath Florida's employment
of, and employment agreements with, any and all Gulf Coast-Based
Pathologists. For purposes hereof (and Section 1.3 and the Contingent
Notes), the term "Gulf Coast Division" shall mean and include that
portion of the business and operations of AmeriPath Florida which,
prior to consummation of the transactions contemplated by this
Agreement, constituted the business and operations of Gulf Coast
Pathology Associates, Inc. f/k/a Xxxxxxxxx & Kalemeris, M.D., P.A.
(ii) Calculation of Operating Earnings. A
statement of the Operating Earnings, prepared by AmeriPath
senior management, will be delivered to the Sellers as soon as
practicable following the end of each period, but in all events within
90 days after the end of each such period. If the Sellers wish to
challenge the calculation of Operating Earnings, he may do so by giving
written notice of such objection (the "Objection Notice") to AmeriPath,
signed by the Sellers, within 20 days after receipt of such statement
of Operating Earnings. The Objection Notice shall set forth in
reasonable detail the Sellers' calculation of Operating Earnings (or
Cumulative Operating Earnings, as the case may be). If an Objection
Notice is so timely delivered to AmeriPath, AmeriPath and the Sellers
shall use their best efforts to resolve as soon as practicable any
difference of opinion. If they are unable to resolve such difference
within 20 days after receipt by AmeriPath of the Objection Notice from
the Sellers, the matter shall be referred to the independent public
accounting firm who then audits the annual financial statements of
AmeriPath, whose decision shall be final and binding on all parties.
If an Objection Notice is not timely delivered to AmeriPath, and if the
statement of Operating Earnings prepared by AmeriPath senior management
indicates that the Minimum Target has been met for a given period, then
the Appropriate
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Principal Amount (together with accrued and unpaid
interest thereon) of the Contingent Notes with respect to
such period shall be paid within five (5) days after the
earlier of the end of the 20-day period within which the
Sellers are entitled to deliver an Objection Notice, or
receipt by AmeriPath of notice from the Sellers that they
accept the calculation of Operating Earnings. If the
Sellers object to the calculation of Operating Earnings for
the purpose of determining compliance with this Section, the
Appropriate Principal Amount of the Contingent Notes for
such period shall be paid within ten (10) days after
resolution of the dispute with respect to such calculation
to the extent, and solely to the extent, that such
resolution indicates that the Minimum Target has been
exceeded for such period. AmeriPath agrees that the
Sellers, upon reasonable notice, during normal business
hours, shall have the right to examine all of the relevant
business, accounting and financial records of AmeriPath or
AmeriPath Florida solely to the extent related to the
Operating Earnings or Cumulative Operating Earnings or the
calculation thereof.
(iii) Cumulative Operating Earnings. For purposes
hereof, the term "Cumulative Operating Earnings" shall mean
and include, with respect to the 24 month period ending
September 30, 1998, the 36 month period ending September 30,
1999, the 48 month period ending September 30, 2000 and the
60 month period ending September 30, 2001, the Operating
Earnings of Gulf Coast, on a cumulative basis, from October
1, 1996 through the end of such period (e.g., the Cumulative
Operating Earnings for the period ending September 30, 1998
shall equal the Operating Earnings, on a cumulative basis,
from October 1, 1996 through September 30, 1998 (i.e.,
twenty four full months of Operating Earnings would be
included)).
(iii) Other Adjustments; Limitations. For purposes
of calculating Operating Earnings (and, as relevant,
Cumulative Operating Earnings) hereunder, the expenses
associated with Gulf Coast may include costs, expenses and
charges relating to management, billing or other services
provided by AmeriPath or its Affiliates (as such term is
defined in Section 12.3 hereof) to the extent both (i) such
services are provided to or for the benefit of the Gulf
Coast Division and (ii) the price or amount charged or
allocated with respect to such services is based upon the
fair market value thereof and is competitive with the price
or amount that would be charged for such services by a
Person not affiliated with the Purchaser on an arms'-length,
negotiated basis.
(c) Effect of Sale on Contingent Notes. Should Person
(as such term is defined in Section 12.3 hereof) acquire AmeriPath,
whether by means of a merger with or into AmeriPath in which
AmeriPath does not survive or the acquisition of all or
substantially all of the stock or assets of AmeriPath (an
"AmeriPath Acquisition"), then, with respect to the Contingent
Notes, as a condition to consummation of the AmeriPath Acquisition,
the acquiring Person shall be required to either (i) acknowledge and
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guarantee AmeriPath's on-going obligations under the Contingent Notes
or (ii) assume the obligations under the Contingent Notes.
(d) Effect of Acquisitions on Contingent Notes. In the
event that AmeriPath acquires one or more Persons or businesses after
the Closing Date, Operating Earnings will be calculated without
including (i) the income generated by, or expenses incurred in
connection with, the acquisition or the acquired Person or business,
and (ii) any selling, general or administrative expenses which do not
relate to Gulf Coast or its business.
(e) Interest. The Contingent Notes shall bear interest
from the date of issuance until maturity, computed on the basis of a
360-day year and the actual number of days elapsed, on the unpaid
Appropriate Principal Amount thereof at the rate of seven percent
(7.0%) per annum. Interest shall accrue and compound annually, and
shall be payable only upon payment of principal, if any. In the event
Operating Earnings or Cumulative Operating Earnings are less than the
applicable Minimum Target for any given year, interest on the
principal amount of the Contingent Notes for such year shall be
canceled and voided.
(f) Maturity, Redemption and Prepayments. For each
period for which Operating Earnings or Cumulative Operating Earnings
equal or exceed the applicable Minimum Target, the Appropriate
Principal Amount of the Contingent Notes, together with interest
accrued on such Appropriate Principal Amount, shall become due and
payable and shall be paid as provided in subparagraph (a) above. If,
in the judgment of a majority of the full Board of Directors of
AmeriPath (which judgment is made based upon the written advice of
counsel, a copy of which shall be provided to the Sellers), it is
determined that the Contingent Notes, or the holding of the Contingent
Notes by the Sellers, may violate any Regulation or Order of any
Authority (as such terms are defined in Section 12.3), then, at
AmeriPath's sole discretion (as recommended by counsel to Ameripath),
the Contingent Notes may be canceled and voided and the Board of
Directors of AmeriPath, in their sole and absolute discretion acting
in good faith, shall provide the Sellers a reasonably equivalent
economic and financial substitute consideration therefor. In its sole
and absolute discretion, AmeriPath may prepay the Contingent Notes by
paying, in the aggregate, $900,000.00 for each year remaining under
the Contingent Notes. AmeriPath shall give the Sellers irrevocable
written notice of any prepayment permitted hereunder not less than
three (3) business days prior to the prepayment date, specifying such
prepayment and the amount of the Contingent Notes proposed to be
prepaid on such date, whereupon such principal amount of the
Contingent Note specified in such notice, together with accrued
interest thereon, shall become due and payable on the prepayment date.
The aggregate amount of each partial prepayment shall be allocated
among each of the holders of the Contingent Notes at the time
outstanding pro rata in proportion to the unpaid principal amounts of
the Contingent Notes held by each of such holders.
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(g) Payments. All payments of principal (including any
prepayments or redemptions), and interest under the Contingent Notes
shall be made by AmeriPath in lawful money of the United States of
America in immediately available funds (or at the written request of
the holders thereof, by cashier's or bank check) not later than twelve
o'clock noon, Miami, Florida time, on the date each such payment is
due. To the extent calculation of any payment amounts (whether
principal, interest or otherwise) results in fractions of a cent, the
amount shall be rounded down to the nearest whole cent.
(h) Subordination; Subordination Agreement. The
Contingent Notes shall be subordinate and junior in right of payment
to certain senior indebtedness pursuant to a subordination agreement
(the "Subordination Agreement "), by and among AmeriPath's senior
lenders and each of the holders of promissory notes of AmeriPath. As
a condition to AmeriPath's obligations under the Contingent Notes, the
Sellers agree to execute and deliver appropriate documents and
agreements evidencing the subordination of the Contingent Notes to
such senior indebtedness of AmeriPath.
(i) Notes Non-negotiable. The Contingent Notes shall be
non-transferable and non-negotiable other than by will or the laws of
intestate succession.
(j) Right of Set-Off on Sellers' Contingent Notes. With
respect to the Contingent Notes, AmeriPath shall have the right,
following prior written notice to any Seller, to set-off against
principal or interest payable under the Contingent Notes the amount of
any indemnification payment owed under Article XI hereof. Such notice
shall state with reasonable specificity the good faith basis for
AmeriPath's right to such indemnification payment, and a copy of such
notice shall also be sent to each director of AmeriPath. The Seller
shall have the right to respond to such notice, and if the Seller
requests that the exercise of such right of set-off be considered and
approved by the Board of Directors, then such right shall not be
exercised unless considered and approved by a majority of the full
Board of Directors. If within 10 days after receipt of such notice of
set-off, the Seller contests in writing (sent to AmeriPath)
AmeriPath's claim that of indemnification under Article XI hereof,
then the amount which AmeriPath would otherwise have paid to the
Seller but for the exercise of such right of set-off shall be paid
into an interest bearing escrow account maintained by a bank selected
by AmeriPath, to be held in such account until AmeriPath and the
Seller have reached agreement as to the amount, if any, of such
indemnification payment and set-off, or until there has been a
judicial resolution of such matter, at which time the amount held in
such segregated account, together with any interest accrued thereon,
shall be released to the prevailing party, as appropriate and/or
instructed. AmeriPath and the Seller agree that they will use their
best efforts to resolve any such dispute within 30 days of receipt of
notice by AmeriPath of the Seller's objection to the set-off.
(k) Defaults. The Sellers shall be entitled to the
benefit of the Events of Default set forth in the form of Contingent
Notes.
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(l) Conflict. To the extent there is any conflict or
inconsistency between the terms of this Agreement and the terms
specified in the Contingent Notes, the terms specified in the
Contingent Notes shall govern and prevail.
1.3 Contingent Issuance of AmeriPath Stock. As additional
purchase price consideration, the Purchaser shall issue to the Sellers, subject
to the conditions and restrictions set forth in this Section 1.3 (the "Stock
Rights"), up to an aggregate maximum of 450,000 shares of AmeriPath Stock (to
be divided among the Sellers as set forth on Schedule 1.3 hereof). Upon
achieving the range (the "Applicable Range") of Operating Earnings or
Cumulative Operating Earnings, as the case may be, set forth on Schedule 1.3
hereto, with respect to each period commencing the twelve month period ending
September 30, 1997 through the sixty month period ending September 30, 2001,
AmeriPath shall deliver, in the aggregate, certificates evidencing the
corresponding number of shares of AmeriPath Stock indicated on Schedule 1.3
hereto (the "Aggregate Stock Amount") to the Sellers (and to each Seller (the
"Applicable Stock Amount")) as so indicated, which shares shall be subject to
the terms, conditions and restrictions set forth in this Section 1.3.
(a) Delivery; Right to Contingent Issuance Subject to
Cancellation. Certificates for shares representing the Applicable
Stock Amount shall be delivered on or before each January 15 following
each period that the Applicable Range of Operating Earnings or
Cumulative Operating Earnings, as the case may be, has been achieved,
if, and only if, (i) with respect to the twelve months ending
September 30, 1997, Operating Earnings equal or exceed a minimum
target amount of $2,450,000.00 (the " First Year Minimum Stock
Target") or, (ii) with respect to the 24 month period ending September
30, 1998, the 36 month period ending September 30, 1999, the 48 month
period ending September 30, 2000 and the 60 month period ending
September 30, 2001, Cumulative Operating Earnings for such periods
equal or exceed $4,900,000.00, $7,350,000.00, $9,800,000.00 and
$12,250,000.00, respectively (together with the First Year Minimum
Stock Target, as relevant to the applicable period, the "Minimum Stock
Targets").
(b) Effect of Sale on Stock Rights. In the event of an
AmeriPath Acquisition (as such term is defined in Section 1.3(c)),
then, with respect to such Stock Rights that have not theretofore been
canceled or voided because the Minimum Stock Target was not or has not
been met for the period in question, as a condition to consummation of
the AmeriPath Acquisition, the acquiring Person shall be required
either to (i) acknowledge and guarantee AmeriPath's on-going
obligations under the Stock Rights, (ii) assume the obligations under
the Stock Rights or (iii) convert the rights to receive AmeriPath
Stock into rights to receive stock in the acquiring Person (of
substantially equivalent value, based upon the acquisition value, as
determined in good faith by the Board of Directors of AmeriPath).
(c) Effect of Acquisitions on Stock Rights. In the event
that AmeriPath acquires one or more Persons or businesses after the
Closing Date, Operating Earnings will be calculated without including
(i) the income generated by, or expenses incurred in
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connection with, the acquisition or the acquired Person or business,
and (ii) any selling, general or administrative expenses which do not
relate to Gulf Coast or its business.
(d) Termination of Stock Rights; Call on AmeriPath Stock.
For each period for which Gulf Coast's Operating Earnings, or
Cumulative Earnings, as the case may be, exceed the Minimum Stock
Target, the corresponding Applicable Stock Amount shall become earned
and shall be delivered as provided in subparagraph (a) above. If, in
the judgment of a majority of the full Board of Directors of AmeriPath
(which judgment is made based upon the written advice of counsel, a
copy of which shall be provided to the Sellers), it is determined that
the Stock Rights, or the holding of the AmeriPath Stock by the
Sellers, may violate any Regulation or Order of any Authority, then,
at AmeriPath's sole discretion and option (as recommended by counsel
to Ameripath), (i) the Stock Rights may be canceled and voided (and
the parties will endeavor in good faith to arrive at a reasonably
equivalent substitute consideration therefor), and (ii) all
outstanding shares of AmeriPath Stock issued to or held by the Sellers
may be redeemed or purchased by AmeriPath (the "Call"), and the
Sellers hereby irrevocably and unconditionally agree to sell such
stock to AmeriPath upon any such Call, at its then fair market value
(as determined in good faith by AmeriPath's Board of Directors).
AmeriPath shall give the holders of the AmeriPath Stock irrevocable
written notice of any cancellation of the Stock Rights and any Call of
the AmeriPath Stock permitted hereunder not less than three (3)
business days prior to the date of such event, specifying such
termination and/or Call and the amount to be paid for the AmeriPath
Stock on the closing date specified therein, whereupon such amount
specified in such notice, upon receipt by AmeriPath of the
certificates therefor at the closing thereof, shall be paid to the
Sellers.
(e) Payments; Certificates. All payments for AmeriPath
Stock which is "called" by AmeriPath pursuant to Section 1.3(d) shall
be made by AmeriPath in lawful money of the United States of America
in immediately available funds (or at the written request of the
Sellers, by certified or bank check) after proper tender by each
Seller of certificates representing all of the AmeriPath Stock owned
by such Seller, duly endorsed for transfer to the Purchaser, together
with stock powers duly executed in blank. Any and all liens, claims,
encumbrances or other restrictions with respect to the AmeriPath Stock
so called shall be satisfied and released, to the satisfaction of
AmeriPath, prior to closing on the purchase thereof. To the extent
calculation of any payment amounts results in fractions of a cent, the
amount shall be rounded down to the nearest whole cent.
(f) Transferability; Shareholders' Agreement. The Stock
Rights are not transferable by the Sellers other than by will or the
laws of intestate succession. All shares of AmeriPath Stock issued at
Closing or pursuant to the Stock Rights shall, in addition to
applicable securities laws, be subject to the Purchaser's
Shareholders' Agreement (as defined in Section 7.9) relating to the
AmeriPath Stock and related and other matters, including, but not
limited to, any restrictions on transferability, any rights of first
refusal and any option of the Purchaser to purchase such shares. As a
condition to the issuance of shares of the AmeriPath Stock and any
shares in connection with any Stock Right (and
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at AmeriPath's option, at each issuance), the Sellers shall execute
and deliver to the Purchaser a counterpart to the Shareholders'
Agreement, in form and substance satisfactory to AmeriPath, and the
Sellers shall make such representations and execute such certificates
as AmeriPath may reasonably require, including representations similar
to those made in Section 2.25 hereof. The Shareholders' Agreement, by
its terms, shall terminate upon the closing of an underwritten public
offering by AmeriPath pursuant to a registration statement filed and
declared effective under the Securities Act of 1933, as amended (the "
Securities Act") covering the offer and sale of AmeriPath Common Stock
in which the aggregate net proceeds to AmeriPath equal at least
$15,000,000.
(g) Legend. Each and every stock certificate
representing shares of AmeriPath Stock issued to the Sellers pursuant
to Section 1.1(b)(ii) and the Stock Rights shall bear the following
(or similar) restrictive legend, together with such other legend(s) as
the Purchaser shall in its discretion deem appropriate:
"The shares represented by this certificate (the "Shares") are
subject to each and every one of the terms, conditions and
restrictions set forth in the Shareholders' Agreement dated
February 29, 1996 (the "Shareholders' Agreement"), as amended,
including, but not limited to, any restrictions on
transferability, any rights of first refusal and any option of
AmeriPath to "call" or purchase such Shares, and may not, in
whole or in part, be sold, transferred, pledged, gifted,
hypothecated or otherwise disposed of in any manner other than
in accordance with the terms of the Shareholders' Agreement, a
copy of which is on file and available for inspection at the
principal offices of AmeriPath presently located at 000
Xxxxxxx Xxxxx Xxxx, Xxxxx 000, Xxxx Xxxxxxxxxx, Xxxxxxx
00000."
Upon termination of the Shareholders' Agreement,
Sellers may present any certificates representing AmeriPath Stock to
AmeriPath for replacement with certificates that do not contain the
foregoing legend.
(h) Antidilution; Adjustments Upon Changes in
Capitalization or Merger. Subject to any required action by the
stockholders of the Purchaser, the number of shares of AmeriPath Stock
covered by the Stock Right, the price per share and the aggregate
number of shares which have been authorized for issuance hereunder,
shall be proportionately adjusted for any increase or decrease in the
number of issued shares of AmeriPath Stock resulting from a stock
dividend or through any recapitalization, reclassification, stock
split- up, combination or exchange of shares (other than any such
combination or exchange of AmeriPath Stock through which shares are
issued to effect an acquisition of another Person). Such adjustment
shall be made by the Board of Directors of AmeriPath, whose
determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Purchaser of
shares of stock of any class, or securities convertible into shares of
stock of any class (whether
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in connection with an acquisition, employee benefit, stock or stock
option plan, private or public offering of securities, or otherwise),
shall affect, and no adjustment by reason thereof shall be made with
respect to, the number of shares of AmeriPath Stock subject to this
Stock Right. Price per share calculations used in this Agreement
shall also be adjusted to reflect changes in the capitalization of the
Purchaser such that (on an aggregate basis) the value of such shares
before the adjustment event shall equal the value of such shares
immediately after such adjustment event.
(i) Reservation of Shares. The Purchaser will at all
times reserve for issuance and delivery all shares of AmeriPath Stock
from time to time receivable hereunder. All such shares shall be duly
authorized and, when issued, shall be validly issued, fully paid and
non-assessable and free of all preemptive rights.
(j) Fractional Shares. No fractional shares or scrip
representing fractional shares shall be issued hereunder, but the
Purchaser shall round down to the nearest whole number the number of
shares of AmeriPath Stock required to be issued and delivered in
accordance with Schedule 1.3.
(k) Rights of the Sellers. The Sellers shall not, solely
by virtue of the Stock Rights, be entitled to any rights of a
stockholder in the Company, either at law or in equity, until
AmeriPath Stock is issued and delivered to the Sellers and the rights
of the Sellers are limited to those expressed in this Agreement.
(l) Failure to Deliver. If the Sellers become obligated
to sell any AmeriPath Stock to the Purchaser as a result of the
exercise of a Call under this Agreement or otherwise, and a Seller
fails to deliver such stock (or the certificates evidencing such
stock) in accordance with the terms of this Agreement, the Purchaser
may, at the sole and absolute discretion of the Board of Directors of
AmeriPath, in addition to all other remedies available to the
Purchaser, tender to such Seller the purchase price for such shares as
is herein specified. Upon tender of such purchase price to such
Seller, the Purchaser, upon written notice to such Seller, may cancel
on its books the certificate or certificates evidencing the shares of
AmeriPath Stock so called, and thereupon all of the Seller's rights in
and to such AmeriPath Stock shall terminate.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND GULF COAST
The Sellers hereby make the following representations and warranties
to the Purchaser, each of which shall be deemed material (and the Purchaser, in
executing, delivering and consummating this Agreement, has relied and will rely
upon the correctness and completeness of each of such representations and
warranties notwithstanding any independent investigation):
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2.1 Corporate Organization, Qualification, etc. Gulf Coast is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Florida with full corporate power and authority to carry
on its business as it is now being conducted and proposed to be conducted, and
to own, operate and lease its properties and assets. Gulf Coast is duly
qualified or licensed to do business in good standing in the jurisdictions set
forth on Schedule 2.1 attached hereto, those being every jurisdiction in which
the conduct of Gulf Coast's business, the ownership or lease of its properties,
the proposed conduct of its business or ownership or lease of its properties,
or the transactions contemplated by this Agreement, require it to be so
qualified or licensed and the failure to be so qualified or licensed would have
a Material Adverse Effect (as defined in Section 12.3). Other than as
contemplated by Section 4.9 of this Agreement, Gulf Coast's articles of
incorporation have not been amended or supplemented and are in full force and
effect as of the date hereof. True, complete and correct copies of Gulf
Coast's articles of incorporation and by-laws, as presently in effect, are
attached hereto as Exhibit 2.1.
2.2 Subsidiaries. Gulf Coast has no Subsidiaries (as defined in
Section 12.3) nor any investment or other interest in, or any outstanding loan
or advance to or from, any Person, including any officer, director or
shareholder.
2.3 Capital Stock. As of the date hereof, the authorized capital
stock of Gulf Coast consists of seven thousand five hundred (7,500) shares,
$1.00 per share par value. The stock record book of Gulf Coast has been
delivered to the Purchaser for inspection prior to the date hereof and is
complete and correct, and all requisite Federal and State documentary stamps
have been affixed thereon and canceled. The Gulf Coast Shares constitute all
of the issued and outstanding shares of capital stock of Gulf Coast, and all of
the Gulf Coast Shares are owned beneficially and of record by the Sellers.
2.4 Corporate Record Books. The corporate minute books of Gulf
Coast have been made available to the Purchaser, are complete and correct and
contain all of the proceedings of the shareholders and directors of Gulf Coast.
2.5 Title to Stock. All of the issued and outstanding shares of
the capital stock of Gulf Coast that are, and at the Closing will be, owned by
the Sellers are duly authorized, validly issued, fully paid and nonassessable,
and are free of all Liens (as defined in Section 12.3). Upon delivery of the
Purchase Price to the Sellers at the Closing, the Sellers will convey, and the
Purchaser will own and hold, good and marketable title to the Gulf Coast
Shares, free and clear of all Liens or contractual restrictions or limitations
whatsoever.
2.6 Options and Rights. There are no outstanding subscriptions,
options, warrants, rights, securities, contracts, commitments, understandings
or arrangements under which Gulf Coast is bound or obligated to issue any
additional shares of its capital stock or rights to purchase shares of its
capital stock. There are no agreements, arrangements or understandings between
the Sellers and/or Gulf Coast and any other Person regarding the Gulf Coast
Shares (or the transfer, disposition, holding or voting thereof).
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2.7 Authorization, Etc. Gulf Coast has full power and authority
and the Sellers have full capacity to enter into this Agreement and the
agreements and documents contemplated hereby and perform their respective
obligations hereunder and thereunder. The execution, delivery and performance
of this Agreement and all other agreements and transactions contemplated hereby
have been duly authorized by the Board of Directors of Gulf Coast and no other
corporate proceedings on its part are necessary to authorize this Agreement and
the transactions contemplated hereby. The Sellers are entering into this
Agreement on their own volition, free from any undue influence or coercion.
Upon execution and delivery of this Agreement by the parties hereto this
Agreement and all other agreements contemplated hereby shall constitute the
legal, valid and binding obligation of each of Gulf Coast and the Sellers party
thereto, enforceable against each such party in accordance with their
respective terms.
2.8 No Violation. The execution and delivery by Gulf Coast and
the Sellers of this Agreement, and any and all other agreements contemplated
hereby, and the fulfillment of and compliance with the respective terms hereof
and thereof by Gulf Coast and the Sellers do not and will not, (a) conflict
with or result in a breach of the terms, conditions or provisions of, (b)
constitute a default or event of default under (with due notice, lapse of time
or both), (c) result in the creation of any Lien upon the capital stock or
assets of Gulf Coast pursuant to, (d) give any third party the right to
accelerate any obligation under, (e) result in a violation of, or (f) require
any authorization, consent, approval, exemption or other action by or notice to
any court or Authority pursuant to, the articles of incorporation or by-laws of
Gulf Coast or any Regulation, Order or Contract (as defined in Section 12.3) to
which Gulf Coast or the Sellers are subject. Gulf Coast and the Sellers will
comply with all applicable Regulations and Orders in connection with the
execution, delivery and performance of this Agreement and the transactions
contemplated hereby.
2.9 Financial Statements. Attached as Exhibit 2.9 hereto are the
following financial statements of Gulf Coast: (i) balance sheets (prepared on
a cash basis) for the fiscal years ended June 30, 1995 and June 30, 1996 (the
"Balance Sheets"), (ii) statements of revenues and expenses and related
schedules thereto (prepared on a cash basis) for the fiscal years ended June
30, 1995 and June 30, 1996 (the "Statements of Revenues and Expenses"), and
(iii) statements of cash flows for fiscal years ended June 30, 1995 and June
30, 1996 (the "Statements of Cash Flows" and, collectively with the Balance
Sheets and the Statements of Revenues and Expenses, the "Financial
Statements"). The balance sheets included in the Financial Statements fairly
present the financial position of Gulf Coast on a cash basis as at the
respective dates thereof, and the statements of revenues and expenses included
in the Financial Statements (x) fairly present the results of operations for
the periods therein referred to, on a cash basis (except as stated therein or
in the notes or schedules thereto) applied on a consistent basis, and (y)
fairly present the financial condition of Gulf Coast at the respective date of
on a cash basis, and for the period covered by, such statements. Gulf Coast
has no liability, whether accrued, absolute or contingent, of a type required
to be reflected on a balance sheet or described in the notes thereto in
accordance with GAAP, other than (i) liabilities incurred since June 30, 1996,
other than in the ordinary course of business, disclosed on Schedule 2.9(a)
attached hereto, and (ii) liabilities covered by insurance or reinsurance (a
complete and detailed description of which is provided
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in Schedule 2.9(b)). Schedule 2.9(c) contains a complete list of the accounts
payable of Gulf Coast as of September 30, 1996 and a summary description as of
the date that is two business days prior to the Closing Date.
2.10 Employees. Gulf Coast has been for the past four years, and
currently is, in compliance with all Federal, State and local Regulations and
Orders affecting employment and employment practices of Gulf Coast (including
those Regulations promulgated by the Equal Employment Opportunity Commission),
including terms and conditions of employment and wages and hours. Gulf Coast
maintains a "pension" or "welfare" benefit plans within the respective meanings
of sections 3(2) and 3(1) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA").
2.11 Absence of Certain Changes. Since June 30, 1996, there has
not been (a) any Material Adverse Change (as defined in Section 12.3) in the
business, financial condition, revenues, expenses, accounts receivable,
accounts payable or operations of Gulf Coast; (b) any damage, destruction or
loss, whether covered by insurance or not, having a Material Adverse Effect,
with regard to Gulf Coast's properties and business; (c) any payment by Gulf
Coast to, or any notice to or acknowledgment by Gulf Coast of any amount due or
owing to, Gulf Coast's self-insured carrier, if any, in connection with any
self-insured amounts or liabilities under health insurance covering employees
of Gulf Coast, in each case, in excess of a reserve therefor on the balance
sheet for the fiscal year ended June 30, 1996 included in the Financial
Statements; (d) other than as set forth on Schedule 2.11, any declaration,
setting aside or payment of any dividend or distribution (whether in cash,
stock or property) in respect of Gulf Coast's capital stock, or any redemption
or other acquisition of such capital stock by Gulf Coast; (e) any increase in
the rate of compensation or in the benefits payable or to become payable by
Gulf Coast to its directors, officers, employees or consultants; (f) any
amendment, modification or termination of any existing, or entering into any
new, contract, agreement, arrangement or plan relating to any salary, bonus,
insurance, pension, health or other employee welfare or benefit plan for or
with any directors, officers, employees or consultants of Gulf Coast; (g) any
entry into any material Contract not in the ordinary course of business,
including without limitation relating to any borrowing or capital expenditure;
(h) any disposition by Gulf Coast of any asset; or (i) any change by Gulf Coast
in accounting methods or principles.
2.12 Contracts.
(a) Except as set forth in Schedule 2.12 hereto, Gulf
Coast is neither a party to nor subject to any written or oral:
(i) pension, profit sharing, bonus, retirement,
stock option, stock purchase or other plan providing for
deferred or other compensation to employees or any other
employee benefit plan (other than as set forth in Schedule
2.18 hereto), or any Contract with any labor union;
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(ii) employment or consultation agreement, or
other compensation Contract, commitment or arrangement, which
is not terminable on notice of 30 days' or less by Gulf Coast
without penalty or other financial obligation (and, except as
set forth on Schedule 2.12, no officer or employee of Gulf
Coast receives total salary, bonus and other compensation from
Gulf Coast of $30,000.00 or more per annum).
(iii) Contract containing covenants or agreements
limiting the freedom of Gulf Coast or any of its employees to
compete in any line of business presently conducted by Gulf
Coast with any Person or to compete in any such line of
business in any area;
(iv) Contract with the Sellers or with any
affiliate or relative of the Sellers (except for any Contract
disclosed in Schedule 2.12 pursuant to clauses (ii) or (iii)
of this Section 2.12(a);
(v) Contract relating to or providing for loans
to officers, directors, employees or Affiliates;
(vi) Contract under which Gulf Coast has advanced
or loaned, or is obligated to advance or loan, funds to any
Person;
(vii) Contract relating to the incurrence,
assumption or guarantee of any indebtedness, obligation or
liability (in respect of money or funds borrowed), or
otherwise pledging, granting a security interest in or placing
a Lien on any asset of Gulf Coast;
(viii) guarantee or endorsement of any obligation;
(ix) Contract under which Gulf Coast is lessee of
or holds or operates any property, real or personal, owned by
any other party, except for any lease of real or personal
property under which the aggregate annual rental payments do
not exceed $7,500.00;
(x) Contract pursuant to which Gulf Coast is
lessor of or permits any third party to hold or operate any
property, real or personal, owned or controlled by Gulf Coast;
(xi) assignment, license, indemnification or
Contract with respect to any intangible property (including,
without limitation, any Proprietary Rights (as defined in
Section 12.3));
(xii) warranty Contract with respect to its
services rendered (or to be rendered) or its products sold or
leased;
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(xiii) Contract which prohibits, restricts or limits
in any way the payment of dividends or distributions by Gulf
Coast;
(xiv) Contract under which it has granted any
Person any registration rights (including piggyback rights)
with respect to any securities;
(xv) Contract for the purchase, acquisition or
supply of inventory and other property and assets, whether for
resale or otherwise in excess of $7,500.00;
(xvi) Contracts with independent agents, brokers,
dealers or distributors;
(xvii) sales, commissions, advertising or marketing
Contracts;
(xviii) Contracts providing for "take or pay" or
similar unconditional purchase or payment obligations;
(xix) Contracts with Persons with which, directly
or indirectly, a Seller also has a Contract;
(xx) Contract with a hospital, physician or other
health care provider or Person pursuant to which the cost of
providing health care services to the patients covered by such
Contract is assumed in whole or in part by such provider; or
(xxi) any other Contract which is material to Gulf
Coast's operations or business prospects, except those which
(x) were made in the ordinary course of business, (y) are
terminable on 30 days' or less notice by Gulf Coast without
penalty or other financial obligation, and (z) in each case,
involve aggregate payments by or to Gulf Coast of $7,500.00 or
less.
(b) No consent of any party to any Contract is required
in connection with the execution, delivery or performance of this
Agreement, or the consummation of the transactions contemplated
hereby.
(c) Except as set forth on Schedule 2.12(c), Gulf Coast
has performed in all material respects all obligations required to be
performed by it and is not in default in any respect under or in
breach of nor in receipt of any claim of default or breach under any
material Contract to which Gulf Coast is subject (including without
limitation all performance bonds, warranty obligations or otherwise);
no event has occurred which with the passage of time or the giving of
notice or both would result in a default, breach or event of non-
compliance under any material Contract to which Gulf Coast is subject
(including without limitation all performance bonds, warranty
obligations or otherwise); Gulf Coast does not have any present
expectation or intention of not fully performing all such obligations;
Gulf Coast does not have any knowledge of any breach or anticipated
breach by the other parties to any such Contract to which it is a
party.
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2.13 True and Complete Copies. Copies of all Contracts and
documents delivered and to be delivered hereunder by the Sellers or Gulf Coast
are and will be true and complete copies of such agreements, contracts and
documents.
2.14 Title and Related Matters.
(a) Gulf Coast has good and marketable title to all of
the properties and assets reflected in the balance sheet for the
fiscal year ended June 30, 1996 included in the Financial Statements
or acquired after the date thereof and for properties sold or
otherwise disposed of since the date thereof in the ordinary course of
business, free and clear of all Liens, except (i) statutory Liens not
yet delinquent, (ii) such imperfections or irregularities of title,
Liens, easements, charges or encumbrances as do not detract from or
interfere with the present use of the properties or assets subject
thereto or affected thereby, otherwise impair present business
operations at such properties; or do not detract from the value of
such properties and assets, taken as a whole, or (iii) as reflected in
the balance sheet for the fiscal year ended June 30, 1996 included in
Financial Statements or the notes thereto.
(b) Gulf Coast owns, and will on the Closing Date own,
good and marketable title to all the personal property and assets,
tangible or intangible, used in its business except as to those assets
leased, all of which leases are in good standing and no party is in
default thereunder, and except for those assets owned by the hospitals
within which Gulf Coast provides services, all of which assets Gulf
Coast has the right to use and will continue to have the right to use
after the Closing Date. None of the assets belonging to or held by
Gulf Coast is or will be on the Closing Date subject to any (i)
Contracts of sale or lease, or (ii) Liens. Except for normal
breakdowns and servicing requirements, all machinery and equipment
regularly used by Gulf Coast in the conduct of its business is in good
operating condition and repair, ordinary wear and tear excepted.
(c) There has not been since June 30, 1996, and will not
be prior to the Closing Date, any sale, lease, or any other
disposition or distribution by Gulf Coast of any of its assets or
properties and any other assets now or hereafter owned by it, except
transactions in the ordinary and regular course of business or as
otherwise consented to by the Purchaser. After the Closing, Gulf
Coast, as the wholly-owned subsidiary of the Purchaser, will own, or
have the unrestricted right to use, all properties and assets that are
currently used in connection with the business of the Sellers.
(d) Schedule 2.14 attached hereto sets forth a
description of all real property owned or leased by Gulf Coast.
2.15 Litigation. There is no Claim (as defined in Section 12.3)
pending or, to the best knowledge of the Sellers and Gulf Coast, threatened
against either of the Sellers or Gulf Coast which, if adversely determined,
would have a Material Adverse Effect on Gulf Coast. Nor is
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there any Order outstanding against either the Sellers or Gulf Coast having, or
which, insofar as can reasonably be foreseen, in the future may have, a
Material Adverse Effect on Gulf Coast.
2.16 Tax Matters.
(a) Gulf Coast has filed all federal, state, and local
tax reports, returns, information returns and other documents
(collectively, the "Tax Returns") required to be filed with any
federal, state, local or other taxing authorities (each a "Taxing
Authority", collectively, the "Taxing Authorities") in respect of all
relevant taxes, including without limitation income, premium, gross
receipts, net proceeds, alternative or add-on minimum, ad valorem,
value added, turnover, sales, use, property, personal property
(tangible and intangible), stamp, leasing, lease, user, excise, duty,
franchise, transfer, license, withholding, payroll, employment, fuel,
excess profits, occupational and interest equalization, windfall
profits, severance, and other charges (including interest and
penalties) (collectively, the "Taxes") and in accordance with all tax
sharing agreements to which any Seller or Gulf Coast may be a party.
All Taxes required or anticipated to be paid for all periods prior to
and including the Closing Date have been paid, including any of Gulf
Coast's Taxes that may be due or claimed to be due as a result of the
consummation of the transactions contemplated by this Agreement. All
Taxes which are required to be withheld or collected by Gulf Coast
have been duly withheld or collected and, to the extent required, have
been paid to the proper Taxing Authority or properly segregated or
deposited as required by applicable laws. There are no Liens for
Taxes upon any property or assets of Gulf Coast except for liens for
Taxes not yet due and payable. Neither the Sellers nor Gulf Coast has
executed a waiver of the statute of limitations on the right of the
Internal Revenue Service or any other Taxing Authority to assess
additional Taxes or to contest the income or loss with respect to any
Tax Return. The basis of any depreciable assets, and the methods used
in determining allowable depreciation (including cost recovery), is
correct and in compliance with the Internal Revenue Code of 1986, as
amended and the regulations thereunder (the "Code").
(b) Other than as set forth on Schedule 2.16, no audit of
Gulf Coast or Gulf Coast's Tax Returns by any Taxing Authority is
currently pending or threatened, and no issues have been raised by any
Taxing Authority in connection with any Tax Returns. No material
issues have been raised in any examination by any Taxing Authority
with respect to Gulf Coast which reasonably could be expected to
result in a proposed deficiency for any other period not so examined,
and there are no unresolved issues or unpaid deficiencies relating to
such examinations. The items relating to the business, properties or
operations of Gulf Coast on the Tax Returns filed by or on behalf of
Gulf Coast for all taxable years (including the supporting schedules
filed therewith), available copies of which have been supplied to the
Purchaser, state accurately the information requested with respect to
Gulf Coast and such information was derived from the books and records
of Gulf Coast.
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(c) Gulf Coast has not made nor has become obligated to
make, nor will as a result of any event connected with the Closing
become obligated to make, any "excess parachute payment" as defined in
Section 280G of the Code (without regard to subsection (b)(4)
thereof).
(d) The Sellers shall cause Gulf Coast to file all Tax
Returns and reports with respect to Taxes which are required to be
filed for Tax periods ending on or before the Closing Date (a
"Pre-Closing Tax Return"), and Gulf Coast shall pay all Taxes due in
respect of such Pre-closing Tax Returns to the appropriate Taxing
Authority; and Gulf Coast shall pay all costs associated with the
preparation thereof.
2.17 Compliance with Law and Applicable Government Regulations.
Gulf Coast is presently complying in respect of its operations, equipment,
practices, real property, plants, laboratories, structures, and other property,
and all other aspects of its business and operations, with all applicable
Regulations and Orders, including, but not limited to, Health Care Laws (as
defined in Section 12.3), all Regulations relating to the safe conduct of
business, environmental protection, quality and labeling, antitrust, Taxes,
consumer protection, equal opportunity, discrimination, health, sanitation,
fire, zoning, building and occupational safety where such failure or failures
would individually or in the aggregate have a Material Adverse Effect. There
are no Claims pending, nor to the best knowledge of Gulf Coast are there any
Claims threatened, nor have the Sellers received any written notice, regarding
any violations of any Regulations and Orders enforced by any Authority claiming
jurisdiction over Gulf Coast, including any requirement of OSHA or any
pollution and environmental control agency (including air and water).
(a) Schedule 2.17(a) attached hereto sets forth all
permits, licenses, provider numbers, orders, franchises and approvals
(collectively, " Permits") from all Federal, state, local and foreign
governmental regulatory bodies held by Gulf Coast. The Permits listed
on Schedule 2.17(a) are the only Permits that are required for Gulf
Coast to conduct its business as presently conducted, except for those
the absence of which would not have any Material Adverse Effect on the
assets, financial condition, results of operations or future prospects
of Gulf Coast. Each such Permit is in full force and effect and, to
the best of the knowledge of Gulf Coast, no suspension or cancellation
of any such Permit is threatened and there is no basis for believing
that such Permit will not be renewable upon expiration.
(b) Gulf Coast has licenses to provide health care
services in the jurisdictions set forth in Schedule 2.17(b) hereto,
which such licenses are all those necessary to conduct the business of
Gulf Coast in the jurisdictions in which Gulf Coast presently
operates. Schedule 2.17(b) also sets forth a true and complete
description of the status of each such license. Except as set forth
on Schedule 2.17(b), neither any Seller nor Gulf Coast is aware of any
event, transaction, correspondence or circumstance which would have,
or could foreseeably have, a Material Adverse Effect on one or more of
such licenses.
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2.18 ERISA and Related Matters.
(a) Benefit Plans; Obligations to Employees. Except as
set forth in Schedule 2.18 hereto, neither Gulf Coast, nor any ERISA
Affiliate of Gulf Coast, is a party to or participates in or has any
liability or contingent liability with respect to:
(i) any "employee welfare benefit plan" or
"employee pension benefit plan" or "multi- employer plan" (as
those terms are respectively defined in Sections 3(1), 3(2)
and 3(37) of ERISA);
(ii) any retirement or deferred compensation plan,
incentive compensation plan, stock plan, unemployment
compensation plan, vacation pay, severance pay, bonus or
benefit arrangement, insurance or hospitalization program or
any other fringe benefit arrangements for any employee,
director, consultant or agent, whether pursuant to contract,
arrangement, custom or informal understanding, which does not
constitute an "employee benefit plan" (as defined in Section
3(3) of ERISA); or
(iii) any employment agreement not terminable on 30
days' or less written notice, without further liability.
For purposes of this Section, the term " ERISA
Affiliate" shall mean any trade or business, whether or not
incorporated, that together with Gulf Coast would be deemed a "single
employer" within the meaning of Section 4001(b)(i) of ERISA.
(b) Plan Documents and Reports. A true and correct copy
of each of the Benefit Plans listed on Schedule 2.18, and all
contracts relating thereto, or to the funding thereof, including,
without limitation, all trust agreements, insurance contracts,
investment management agreements, subscription and participation
agreements and record keeping agreements, each as in effect on the
date hereof, has been supplied to the Purchaser. In the case of any
Benefit Plan that is not in written form, the Purchaser has been
supplied with an accurate description of such Benefit Plan as in
effect on the date hereof. A true and correct copy of the three most
recent annual reports and accompanying schedules, the three most
recent actuarial reports, and the most recent summary plan description
and Internal Revenue Service determination letter with respect to each
such Benefit Plan, to the extent applicable, and a current schedule of
assets (and the fair market value thereof assuming liquidation of any
asset which is not readily tradeable) held with respect to any funded
Benefit Plan has been supplied to the Purchaser by Gulf Coast, and
there have been no material changes in the financial condition in the
respective Plans from that stated in the annual reports and actuarial
reports supplied.
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(c) Compliance with Laws; Liabilities. As to all Benefit
Plans, except as otherwise specified on Schedule 2.18, Gulf Coast is
in compliance in all material respects with the terms of all Benefit
plans and every Benefit Plan is in compliance with all of the
requirements and provisions of ERISA and all other laws and
regulations applicable thereto, including without limitation the
timely filing of all annual reports or other filings required with
respect to such Benefit Plans. None of the assets of any Benefit Plan
are invested in employer securities or employer real property, as
those terms are defined in Section 407(d) of ERISA. There have been
no "prohibited transactions" (as described in Section 406 of ERISA or
Section 4975 of the Code) with respect to any Benefit Plan and neither
Gulf Coast nor any ERISA Affiliate of Gulf Coast has otherwise engaged
in any prohibited transaction. There has been no "accumulated funding
deficiency" as defined in Section 302 of ERISA, nor has any reportable
event as defined in Section 4043(b) of ERISA occurred with respect to
any Benefit Plan. Actuarially adequate accruals for all obligations
or contingent obligations under the Benefit Plans are reflected in
Gulf Coast's balance sheet for the fiscal year ended December 31, 1995
included in Financial Statements provided to the Purchaser and such
obligations include a pro rata amount of the contributions which would
otherwise have been made in accordance with past practices for the
plan years which include the closing date.
2.19 Intellectual Property.
(a) Except as set forth on Schedule 2.19, Gulf Coast has
no trade name, service xxxx, patent, copyright or trademark related to
its business.
(b) Gulf Coast has the right to use each Proprietary
Right listed in Schedule 2.19, and except as otherwise set forth
therein, each of such Proprietary Rights is, and will be on the
Closing Date, free and clear of all royalty obligations and Liens.
There are no Claims pending, or to the best knowledge of the Sellers,
threatened, against the Sellers that their use of any of the
Proprietary Rights listed on Schedule 2.19 infringes the rights of
any Person. The Sellers have no knowledge of any conflicting use of
any of such Proprietary Rights.
(c) Gulf Coast is not a party in any capacity to any
franchise, license or royalty agreement respecting any Proprietary
Right and there is no conflict with the rights of others in respect to
any Proprietary Right now used in the conduct of its business.
(d) Internal Software Applications.
(i) Owned Software. The current software
applications used by Gulf Coast in the operation of its
business, as set forth and described on Schedule 2.19(d)
hereto (the "Software"), to the extent it has been designed or
developed by Gulf Coast's management information or
development staff or by consultants on Gulf Coast's behalf, is
original and capable of copyright protection in the United
States, and Gulf Coast has complete rights to and ownership of
such
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Software. No part of any such Software is an imitation or
copy of, or infringes upon, the software of any other Person
or violates or infringes upon any common law or statutory
rights of any other Person, including, without limitation,
rights relating to defamation, contractual rights,
copyrights, trade secrets, and rights of privacy or
publicity. Gulf Coast has not sold, assigned, licensed,
distributed or in any other way disposed of or encumbered the
Software.
(ii) Licensed Software. The Software, to the
extent it is licensed from any third party licensor or
constitutes "off-the-shelf" software, is held by Gulf Coast
legitimately and is fully transferable to the Purchaser
without any third party consent. All of Gulf Coast's computer
hardware has legitimately-licensed software installed therein.
(iii) No Errors; Nonconformity. Gulf Coast
warrants that the Software is free from any significant
software defect or programming or documentation error,
operates and runs in a reasonable and efficient business
manner, conforms to the specifications thereof, and, with
respect to owned Software, the applications can be recreated
from their associated source code.
2.20 Environmental Matters. Except as disclosed in Schedule 2.20:
(a) neither Gulf Coast's business nor the operation thereof violates any
applicable Environmental Law (as defined in Section 12.3) in effect as of the
date hereof and no condition or occurrence (any accident, happening or event
which occurs or has occurred at any time prior to the Closing Date, which
results in or could result in a Claim against Gulf Coast or the Purchaser or
creates or could create a liability or loss for Gulf Coast or the Purchaser)
which, with notice or the passage of time or both, would constitute a violation
of any Environmental Law; (b) Gulf Coast is in possession of all Environmental
Permits (as defined in Section 12.3) required under any applicable
Environmental Law for the conduct or operation of Gulf Coast's business (or any
part thereof), and Gulf Coast is in full compliance with all of the
requirements and limitations included in such Environmental Permits; (c) Gulf
Coast has not stored or used any pollutants, contaminants or hazardous or toxic
wastes, substances or materials on or at any of its property or facilities
except for inventories of chemicals which are used or to be used in the
ordinary course of Gulf Coast's business (which inventories have been sorted or
used in accordance with all applicable Environmental Permits and all
Environmental Laws, including all so-called "Right to Know" laws); (d) Gulf
Coast has not received any notice from any Authority or any private Person that
Gulf Coast's business or the operation of any of its facilities is in violation
of any Environmental Law or any Environmental Permit or that it is responsible
(or potentially responsible) for the cleanup of any pollutants, contaminants,
or hazardous or toxic wastes, substances or materials at, on or beneath any of
Gulf Coast's property, or at, on or beneath any land adjacent thereto or in
connection with any waste or contamination site; (e) Gulf Coast is not the
subject of any Federal, state, local, or private Claim involving a demand for
damages or other potential liability with respect to a violation of
Environmental Laws or under any common law theories relating to operations or
the condition of any facilities or property (including underlying groundwater)
owned, leased, or operated by Gulf Coast; (f) Gulf Coast has not buried,
dumped, disposed,
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spilled or released any pollutants, contaminants or hazardous or wastes,
substances or materials on, beneath or adjacent to any of its property or any
property adjacent thereto; (g) no by-products of any manufacturing or mining
process employed in the operation of Gulf Coast's business which may constitute
pollutants, contaminants or hazardous or toxic wastes, substances or materials
under any Environmental Law are currently stored or otherwise located on any of
Gulf Coast's property; (h) no property now or previously owned, leased or
operated by Gulf Coast, is listed or proposed for listing on the National
Priorities List pursuant to CERCLA, on the CERCLIS or on any other federal or
state list of sites requiring investigation or clean-up; (i) there are no
underground storage tanks, active or abandoned, including petroleum storage
tanks, on or under any property now or previously owned, leased or operated by
Gulf Coast; (j) Gulf Coast has not directly transported or directly arranged
for the transportation of any Hazardous Material to any location which is
listed or proposed for listing on the National Priorities List pursuant to
CERCLA, on the CERCLIS or on any federal or state list or which is the subject
of federal, state or local enforcement actions or other investigations which
may lead to material Claims against Gulf Coast for any remedial work, damage to
natural resources or personal injury, including Claims under CERCLA; and (k)
there are no polychlorinated biphenyls, radioactive materials or friable
asbestos present at any property now or previously owned or leased by Gulf
Coast. Gulf Coast has timely filed all reports required to be filed with
respect to all of its property and facilities and has generated and maintained
all required data, documentation and records under all applicable Environmental
Laws.
2.21 Dealings with Affiliates. Schedule 2.21 hereto sets forth a
complete list, including the parties, of all written agreements and material
oral arrangements to which Gulf Coast is, will be or has been a party, at any
time from January 1, 1995 to the Closing Date, and to which any one or more
Affiliates is also a party.
2.22 Banking Arrangements. Schedule 2.22 attached hereto sets
forth the name of each bank in or with which Gulf Coast has an account, credit
line or safety deposit box, and a brief description of each such account,
credit line or safety deposit box, including the names of all Persons currently
authorized to draw thereon or having access thereto. Gulf Coast has no
liability or obligation relating to funds or money borrowed by or loaned to
Gulf Coast (whether under any credit facility, line of credit, loan, indenture,
advance, pledge or otherwise).
2.23 Insurance. Schedule 2.23 attached hereto sets forth a list
and brief description, including dollar amounts of coverage, of all policies of
fire, liability, professional liability and other forms of insurance held by
Gulf Coast as of the date hereof. Such policies are valid, outstanding and
enforceable policies, as to which premiums have been paid currently. Neither
Gulf Coast nor any of the Sellers know of any state of facts, or of the
occurrence of any event which might reasonably (a) form the basis for any Claim
against Gulf Coast not fully covered by insurance for liability on account of
any express or implied warranty or tortious omission or commission, or (b)
result in material increase in insurance premiums of Gulf Coast.
2.24 Consents. Schedule 2.24, annexed hereto, sets forth a
complete list of consents of governmental and other regulatory agencies or
authorities, foreign or domestic, required to be
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received by or on the part of Gulf Coast and the Sellers to enable Gulf Coast
or the Sellers to enter into and carry out this Agreement in all material
respects. All such requisite consents have been, or prior to the Closing will
have been, obtained.
2.25 Investment Representations. In the event, in connection with
this Agreement or any agreement or transaction contemplated hereby, AmeriPath
offers or sells, or is deemed to offer or sell, any securities of AmeriPath to
a Seller (including AmeriPath Stock pursuant to Section 1.3), then each Seller
hereby represents and warrants to AmeriPath as follows:
(a) Each Seller has been offered, and up to the Closing
Date and the time(s) of issuance of the AmeriPath Stock shall be
offered, the opportunity to ask questions of, and receive answers
from, AmeriPath and its Subsidiaries, and the Sellers have been given
full and complete access to all available information and data
relating to the business and assets of AmeriPath and its Subsidiaries,
have obtained such additional information about AmeriPath and its
Subsidiaries which the Sellers have deemed necessary in order to
evaluate the opportunities, both financial and otherwise, with respect
to AmeriPath and, except as set forth herein, have not relied on any
representation, warranty or other statement concerning the Purchaser
and its Subsidiaries in their evaluation of the decision to consummate
the transactions contemplated herein. On the basis of the foregoing,
each Seller is familiar with the operations, business plans and
financial condition of AmeriPath.
(b) Each Seller understands that he must bear the
economic risk of the AmeriPath Stock, if and when issued to such
Seller, for an indefinite period of time because, except as provided
in this Agreement, (i) each Seller understands that AmeriPath proposes
to issue and deliver the shares of AmeriPath Stock issuable in
accordance with this Agreement, without compliance with the
registration requirements of the Securities Act, that for such purpose
AmeriPath will rely upon the representations, warranties, covenants
and agreements contained herein, as well as any additional
representations, warranties, covenants, agreements and certifications
requested by AmeriPath to be delivered by the Sellers at such time(s)
of issuance of the AmeriPath Stock; and that such noncompliance with
registration is not permissible unless such representations and
warranties are correct and such covenants and agreements are performed
at and as of the time of issuance; (ii) each Seller understands that,
under existing rules of the Securities and Exchange Commission (the
"SEC"), there are substantial restrictions in the transferability of
his shares of AmeriPath Stock; his shares of AmeriPath Stock may be
transferred only if registered under the Securities Act or if an
exemption from such registration is available; Sellers may not be able
to avail themselves of the provisions of Rule 144 promulgated by the
SEC under the Securities Act with respect to the transfer of such
shares; (iii) the AmeriPath Stock may not be sold, transferred,
pledged, or otherwise disposed of without the consent of AmeriPath and
an opinion of counsel for or satisfactory to AmeriPath that
registration under the Securities Act or any applicable state
securities laws is not required; and (iv) AmeriPath neither has an
obligation to register a sale of the AmeriPath Stock held by any
Seller nor has it agreed to do so in the future.
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(c) Each Seller is an "accredited investor", as such term
is defined in Rule 501 of Regulation D promulgated under the
Securities Act in that each Seller, as of the date of this Agreement,
either (a) (either individually or jointly with such Seller's spouse)
has a net worth in excess of $1,000,000; or (b) had an individual
income in excess of $200,000 in each of the two most recent years or
joint income with such Seller's spouse in excess of $300,000 in each
of those years, and reasonably expects reaching the same income level
in the current year.
(d) Each Seller is a sophisticated investor familiar with
the type of risks inherent in the acquisition of securities such as
the shares of AmeriPath Stock and such Seller's financial position is
such that such Seller can afford to retain his shares of AmeriPath
Stock for an indefinite period of time without realizing any direct or
indirect cash return on such Seller's investment.
(e) Each Seller received this Agreement and first learned
of the transactions contemplated hereby in Florida. Each Seller
executed and will execute all documents contemplated hereby in
Florida, and intends that the laws of Florida govern this transaction.
Each Seller is a resident of Florida.
(f) Each Seller understands, agrees and acknowledges that
the AmeriPath Stock has not been registered under the Florida
Securities Act or the Securities Act in reliance upon exemption
provisions contained therein which AmeriPath believes are available.
Any sale made pursuant to such exemption provisions is voidable by the
purchaser within three business days after the first tender of
consideration is made by the purchaser to the issuer, an agent of the
issuer or an escrow agent. A withdrawal within such three-day period
will be without any further liability to any Person (except that the
Purchase Price attributable to such withdrawal must be returned to the
Purchaser). To accomplish this withdrawal, a purchaser need only send
a letter or telegram to AmeriPath at the address set forth herein,
indicating his or her intention to withdraw. Such letter or telegram
should be sent and postmarked prior to the end of the aforementioned
third business day. It is advisable to send such letter by certified
mail, return receipt requested, to ensure that it is received and also
to evidence the date it was mailed. If the request is made orally, in
person or by telephone, to a representative of AmeriPath, a written
confirmation that the request has been received should be requested.
(g) Each Seller is acquiring his shares of AmeriPath
Stock for such Seller's own account and not with a view to, or for
sale in connection with, the distribution thereof within the meaning
of the Securities Act.
(h) Each Seller understands that the certificates
evidencing his shares of AmeriPath Stock, when and if issued, will
bear appropriate restrictive legends.
2.26 Accounts Receivable; Inventories. The accounts receivable of
Gulf Coast as of September 30, 1996 and a summary of accounts receivable as of
the date two business days prior
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to the Closing Date are reflected on Schedule 2.26 attached hereto and are good
and collectible. All such accounts receivable are valid, genuine and
subsisting, arise out of bona fide sales and deliveries of goods, performance
of services or other business transactions and are not subject to defenses,
set-offs or counterclaims. Notwithstanding the foregoing representation with
respect to accounts receivable, the parties acknowledge and agree that
Purchaser shall only be entitled to retain up to $960,000 collected from the
accounts receivable existing on the Closing Date pursuant to Section 6.12 of
this Agreement. The inventories reflected on the balance sheets included in
the Financial Statements, and the inventories held by Gulf Coast on the date
hereof, (i) do not include any items which are not usable or saleable in the
ordinary course of business of Gulf Coast, and (ii) have been reflected on such
balance sheets at the lower of cost or market value (taking into account the
usability or salability thereof), in accordance with GAAP. All such
inventories are owned free and clear and are not subject to any Lien except to
the extent reserved against or reflected in the Financial Statements. Since
June 30, 1996, inventories of raw materials and supplies have been purchased by
Gulf Coast in the ordinary course of business, consistent with anticipated
seasonal requirements, and the volumes of purchases thereof and orders therefor
have not been reduced or otherwise changed in anticipation of the transactions
contemplated by this Agreement. Gulf Coast is not aware of any material
adverse conditions affecting the supply of materials available to Gulf Coast,
and, to the best knowledge of Gulf Coast, the consummation of the transactions
contemplated hereby will not adversely affect any such supply.
2.27 Brokerage. Neither Gulf Coast nor any Seller has employed any
broker, finder, advisor, consultant or other intermediary in connection with
this Agreement or the transactions contemplated by this Agreement who is or
might be entitled to any fee, commission or other compensation from Gulf Coast
or any Seller, or from the Purchaser or its Affiliates, upon or as a result of
the execution of this Agreement or the consummation of the transactions
contemplated hereby.
2.28 Improper and Other Payments. Except as set forth on Schedule
2.28 hereto, (a) neither Gulf Coast, any director, officer, employee thereof,
nor, to Gulf Coast's knowledge, any agent or representative of Gulf Coast nor
any Person acting on behalf of any of them, has made, paid or received any
unlawful bribes, kickbacks or other similar payments to or from any Person or
Authority, (b) no improper foreign payment (as defined in the Foreign Corrupt
Practices Act) has been made, and (c) the internal accounting controls of Gulf
Coast are believed by Gulf Coast's management to be adequate to detect any of
the foregoing under current circumstances.
2.29 Participation in Audits. Except as set forth in Schedule
2.29, Gulf Coast has not been informed of any Recoupment Claims (as hereinafter
defined) arising in connection with audits or reviews conducted by Medicaid,
Medicare or private insurance companies. To the best knowledge of Gulf Coast
and the Sellers there is no basis for any Recoupment Claims based upon cost
reports, claims or bills submitted or to be submitted in connection with
services rendered by Gulf Coast. For purposes of this Section 2.29 the term
"Recoupment Claim" shall mean any recoupment or overpayment, set-off, penalty
or fine, pending or to the knowledge of Gulf Coast
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and the Sellers threatened by any third-party payor or governmental authority
having jurisdiction over Gulf Coast for amounts arising from or related to
payments to Gulf Coast for services rendered prior to the Closing.
2.30 Health Care Laws & Regulations.
(a) Fraud and Abuse. Except as set forth on Schedule
2.30(a), to the best of the Sellers' and Gulf Coast's knowledge, Gulf
Coast and its officers, directors, employees, shareholders and
providers, have not engaged in any activities which are prohibited
under federal Medicaid statues, 42 U.S.C. Section 1320a-7a and 7b, or
the regulations promulgated pursuant to such statutes or related state
or local statutes or regulations or which are prohibited by rules of
professional conduct or which otherwise could constitute fraud,
including but not limited to the following: (i) making or causing to
be made a false statement or representation of a material fact in any
application for any benefit or payment; (ii) making or causing to be
made any false statement or representation of a material fact for use
in determining rights to any benefit or payment; (iii) failing to
disclose knowledge by a claimant of the occurrence of any event
affecting the initial or continued right to any benefit or payment on
its behalf or on behalf of another, with intent to secure such benefit
or payment fraudulently; and (iv) soliciting, paying or receiving any
remuneration (including any kickback, bribe, or rebate), directly or
indirectly, overtly or covertly, in cash or in kind or offering to pay
such enumeration (a) in return for referring an individual to a Person
for the furnishing or arranging for the furnishing of any item or
service for which payment may be made in whole or in part by Medicare
or Medicaid, or (b) in return for purchasing, leasing, or ordering or
arranging for or recommending purchasing, leasing, or ordering any
good, facility, service, or item for which payment may be made in
whole or in part by Medicaid; subject, in the case of (iv) to the lack
of clarity in the law relating to the marketing of Medicare risk
products by brokers.
(b) Third-Party Payors. All Contracts with third-party
payors were entered into by Gulf Coast in the ordinary course of
business. Gulf Coast will have made available to the Purchaser, as of
the Closing Date, an accurate and complete list of all third-party
payors which have material agreements with Gulf Coast (as set forth on
Schedule 2.30(b)), together with accurate and complete copies of all
such Contracts. Except as set forth on Schedule 2.30(b), Gulf Coast
is in compliance with each third-party payor's Contract, and Gulf
Coast has properly charged and billed in accordance with the terms of
those Contracts, including, where applicable, billing and collection
of all deductibles and co-payments.
(c) Compliance with Medicare and Medicaid Programs. Gulf
Coast has timely and accurately filed all requisite claims and other
reports required to be filed in connection with all state and federal
Medicare and Medicaid programs in which Gulf Coast participates due on
or before the Closing Date except to the extent that the failure to
file such claims and reports would not result in a Material Adverse
Effect on Gulf
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Coast. Except as set forth on Schedule 2.30(c) hereto, there are no
Claims pending or, to Gulf Coast's knowledge, threatened or scheduled
before any Authority, including without limitation, any intermediary,
carrier, the Administrator of the Health Care Financing Administration,
the Florida Department of Health and Rehabilitative Services, the
Agency for Health Care Administration or any other state or federal
agency with respect to any Medicare and Medicaid claim filed by Gulf
Coast on or before the Closing Date, or program compliance matters,
which would have a Material Adverse Effect on Gulf Coast, or its
assets, the operations or utility thereof, or the consummation of the
transactions contemplated hereby. Gulf Coast has delivered to the
Purchaser accurate and complete copies of any Claims, actions or
appeals listed on Schedule 2.30(c). Except for routinely scheduled
reviews pursuant to Gulf Coast's Medicare and Medicaid Contracts, no
valid review or program integrity review related to Gulf Coast has been
conducted by any Authority in connection with the Medicare or Medicaid
programs and no such review is scheduled, or to Gulf Coast's knowledge,
pending or threatened against or affecting Gulf Coast, its business,
assets, or the consummation of the transactions contemplated hereby.
(d) Rate Limitations and Rates. Each facility currently
operated by Gulf Coast charges rates and accordingly bills for
services which are legal and proper, and Gulf Coast's standard and
Medicare rates are set forth on
Schedule 2.30(d). Certain reimbursement rates established by
third-party payors are subject to retrospective adjustment, which
adjustments are set forth on said Schedule 2.30(d).
(e) Reimbursement Documentation. Gulf Coast has filed
when due any and all cost reports and other documentation and reports,
if any, required to be filed by third-party payors and governmental
agencies in compliance with applicable contractual provisions and/or
laws, regulations and rules.
(f) Patient Referrals. No Person having a "financial
relationship" with Gulf Coast, as that term is defined in 42 U.S.C.
Section 1395nn, is in a position, directly or indirectly, to refer
patients or services to Gulf Coast, other than referrals which comply
with the requirements of 42 U.S.C. Section 1395nn and the regulations
promulgated pursuant thereto.
2.31 Financial Condition at Closing. At and as of Closing, Gulf
Coast shall have accounts receivable in the amount of $960,000 and cash on hand
equal to $100,000.
2.32 Disclosure. Neither this Agreement nor any of the exhibits,
attachments, written statements, documents, certificates or other items
prepared for or supplied to the Purchaser by or on behalf of the Sellers or
Gulf Coast with respect to the transactions contemplated hereby contains any
untrue statement of a material fact or omits a material fact necessary to make
each statement contained herein or therein not misleading.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Sellers as follows:
3.1 Corporate Organization, etc. The Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation with full corporate power and authority to carry
on its business as it is now being conducted and to own, operate and lease its
properties and assets. The Purchaser is duly qualified or licensed to do
business in good standing in every jurisdiction in which the conduct of its
business, the ownership or lease of its properties, require it to be so
qualified or licensed and the failure to be so qualified or licensed would have
a material adverse effect on its business.
3.2 Subsidiaries. Other than the Subsidiaries of the Purchaser
listed in Schedule 3.2 hereto, the Purchaser has no Subsidiaries.
3.3 Authorization, Etc. The Purchaser has full corporate power
and authority to enter into this Agreement and to carry out the transactions
contemplated hereby. The Board of Directors of the Purchaser has duly
authorized the execution, delivery and performance of this Agreement, the
Contingent Notes and the other agreements and transactions contemplated hereby,
and no other corporate proceedings on its part are necessary to authorize this
Agreement and the transactions contemplated hereby. Upon execution and
delivery of this Agreement by the parties hereto this Agreement shall, and upon
issuance of the Contingent Notes in accordance with the provisions hereof the
Contingent Notes shall, constitute legal, valid and binding obligations of the
Purchaser, enforceable against the Purchaser in accordance with their
respective terms.
3.4 No Violation. The execution, delivery and performance by the
Purchaser of this Agreement, and all other agreements contemplated hereby, and
the fulfillment of and compliance with the respective terms hereof and thereof
by the Purchaser, do not and will not (a) conflict with or result in a breach
of the terms, conditions or provisions of, (b) result in a violation of, or (c)
require any authorization, consent, approval, exemption or other action by or
notice to any Authority pursuant to, the certificate of incorporation or
by-laws of the Purchaser, or any Regulation to which the Purchaser is subject,
or any Contract or Order to which the Purchaser or its properties are subject.
The Purchaser will comply with all applicable Regulations and Orders in
connection with its execution, delivery and performance of this Agreement and
the transactions contemplated hereby.
3.5 Governmental Authorities. The Purchaser has complied in all
material respects with all applicable Regulations in connection with its
execution, delivery and performance of this Agreement and the agreements and
transactions contemplated hereby. The Purchaser is not required to submit any
notice, report, or other filing with any governmental authority in connection
with its execution or delivery of this Agreement or the consummation of the
transactions contemplated hereby. No authorization, consent, approval,
exemption or notice is
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required to be obtained by the Purchaser in connection with the execution,
delivery, and performance of this Agreement and the agreements and transactions
contemplated hereby.
3.6 Issuance of AmeriPath Stock. All shares of AmeriPath Stock
required to be issued by AmeriPath to the Sellers, in accordance with the terms
and subject to the conditions set forth in this Agreement, shall, upon issuance
and delivery, be duly authorized, validly issued, fully paid and
non-assessable.
3.7 Financial Statements. To the best of Purchaser's knowledge,
the Purchaser Financial Statements (as defined below) fairly present its
financial position, business and operations, and are maintained in accordance
with reasonable business standards and do not fail to reflect any material
activity, charge, expense, income or other action or attribute of the
Purchaser. True and complete copies of the Purchaser's financial statements
for the year ended December 31, 1995, and the six (6) months ended June 30,
1996 (collectively, the "Purchaser Financial Statements") are attached as
Exhibit 3.7 of this Agreement. Such financial statements have been prepared in
accordance with generally accepted accounting principles consistently applied
(except for purchase accounting adjustments that may be required by GAAP) and
accurately reflect the Purchaser's business, operations, financial results,
financial position, expenses, incomes, assets and liabilities and are complete
in all material respects as of their respective dates. There has been no
material adverse change to Purchaser's financial position since the financial
statements dated June 30, 1996.
ARTICLE IV
COVENANTS OF THE SELLERS
From the date hereof until the Closing, except as otherwise consented
to or approved by the Purchaser in writing, Gulf Coast covenants and agrees
that it shall act, and the Sellers shall cause Gulf Coast to so act or refrain
from acting where required hereinafter, to comply with the following:
4.1 Regular Course of Business. Gulf Coast shall operate its
business diligently and in good faith and in the ordinary and usual course,
consistent with past management practices; shall maintain all of its respective
properties in good order and condition, shall maintain (except for expiration
due to lapse of time) all leases and Contracts in effect without change except
as expressly provided herein; shall comply with the provisions of all
Regulations and Orders applicable to Gulf Coast and the conduct of its
respective business; shall not cancel, release, waive or compromise any debt
(other than as provided in this Agreement), Claim or right in its favor; shall
not alter the rate or basis of compensation of any of its officers, directors,
employees or consultants; shall maintain insurance and reinsurance coverage as
in effect on the date hereof up to the Closing Date; and shall preserve the
business of Gulf Coast intact, and use its best efforts to keep available for
Gulf Coast and the Purchaser the services of the officers and employees of
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Gulf Coast, and to preserve the good will of clients, patients, suppliers and
others having business relations with Gulf Coast.
4.2 Amendments. Except as provided in Section 4.9 of this
Agreement, no change or amendment shall be made in the articles of
incorporation or by-laws of Gulf Coast. Gulf Coast shall not merge with or
into or consolidate with any other corporation or Person, acquire substantially
all of the assets of any Person or change the character of its business.
4.3 Capital Changes; Pledges. Except as contemplated under this
Agreement, Gulf Coast shall not issue or sell any shares of its capital stock
of any class or issue or sell any securities convertible into, or options,
warrants to purchase or rights to subscribe to, any shares of its capital stock
and Gulf Coast shall not pledge or otherwise encumber any shares of its capital
stock.
4.4 Dividends. Except as provided in Section 4.6, Section 7.13,
or as set forth on Schedule 2.11, Gulf Coast shall not declare, pay or set
aside for payment any dividend or other distribution in respect of its capital
stock, nor shall Gulf Coast, directly or indirectly, redeem, purchase or
otherwise acquire any shares of its capital stock.
4.5 Capital and Other Expenditures. Gulf Coast shall not make any
capital expenditures, or commitments with respect thereto.
4.6 Cash and Cash Equivalents. Cash and cash equivalents shall be
preserved, and expended, solely in the ordinary and usual course of business;
provided, however, that prior to the Closing, cash on hand in excess of
$100,000 may be distributed by Gulf Coast to the Sellers.
4.7 Borrowing. Gulf Coast shall not incur, assume or guarantee
any indebtedness, obligations or liabilities not reflected on the Financial
Statements (or the balance sheets included therein) except in the ordinary
course of business or for purposes of consummation of the transactions
contemplated by this Agreement and in any case only after consultation with the
Purchaser.
4.8 Other Commitments. Except as set forth in this Agreement,
incurred or transacted in the ordinary course of business, or permitted in
writing by the Purchaser, Gulf Coast shall not enter into any transaction or
make any commitment or incur any obligation (including entering into any real
property leases).
4.9 Amendments to Charter. Prior to the Closing, the Sellers
shall deliver to the Purchaser the certified amendment to Gulf Coast's articles
of incorporation, which among other things, (i) changed the company's name to
Gulf Coast Pathology Associates, Inc. and (ii) provided that the company may
operate for any lawful purpose. All of such amendments (together, the "Gulf
Coast Charter Amendments") shall be in form and substance satisfactory to
AmeriPath.
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4.10 Interim Financial Information. To the extent available, Gulf
Coast shall supply the Purchaser with unaudited financial statements
(including, without limitation, balance sheets and statements of revenues and
expenses) and information for each calendar month, promptly following the
conclusion of such month, and as Gulf Coast may otherwise reasonably request.
4.11 Full Access and Disclosure.
(a) Gulf Coast shall afford to the Purchaser and its
counsel, accountants and other authorized representatives reasonable
access during business hours to Gulf Coast's facilities, properties,
books and records in order that the Purchaser may have full
opportunity to make such reasonable investigations as it shall desire
to make of the affairs of Gulf Coast; and the Sellers shall cause Gulf
Coast's officers, employees and auditors to furnish such additional
financial and operating data and other information as the Purchaser
shall from time to time reasonably request including, without
limitation, any internal control recommendations applicable to Gulf
Coast made by Gulf Coast's independent auditors in connection with any
examination of Gulf Coast's Financial Statements and books and
records.
(b) From time to time prior to the Closing Date, Gulf
Coast shall promptly supplement or amend information previously
delivered to the Purchaser with respect to any matter hereafter
arising which, if existing or occurring at the date of this Agreement,
would have been required to be set forth herein or disclosed.
(c) In connection with any "due diligence" examination
performed by the Purchaser with respect to the business of Gulf Coast,
the Sellers shall fully cooperate and the results of such "due
diligence" examination shall be satisfactory to the Purchaser.
4.12 Confidentiality. The Sellers and Gulf Coast shall, and shall
cause its principals, officers and other personnel and authorized
representatives to, hold in confidence, and not disclose to any other party
without the Purchaser's prior consent, all written and oral information
furnished or disclosed by or received from the Purchaser or its officers,
directors, employees, agents, counsel and auditors in connection with the
transactions contemplated hereby except as may be required by applicable law or
as otherwise contemplated herein.
4.13 Breach of Agreement. Neither the Sellers nor Gulf Coast shall
take any action which, if taken on or prior to the Closing Date, would
constitute a breach of this Agreement.
4.14 Fulfillment of Conditions Precedent. Gulf Coast and the
Sellers shall use their best efforts to obtain at their expense, on or prior to
the Closing Date, all such waivers, Permits, consents, approvals or other
authorizations from third parties and Authorities, and to do all things as may
be necessary or desirable in connection with the transactions contemplated by
this Agreement in order to fully and expeditiously consummate the transactions
contemplated by this Agreement.
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ARTICLE V
COVENANTS OF THE PURCHASER
The Purchaser hereby covenants and agrees with Gulf Coast and the
Sellers that prior to the Closing or the termination of this Agreement:
5.1 Confidentiality. The Purchaser shall, and shall cause its
principals, officers and other personnel and authorized representatives to,
hold in confidence, and not disclose to any other party without the Sellers'
prior consent, all information received by it from the Sellers or Gulf Coast's
officers, directors, employees, agents, counsel and auditors in connection with
the transactions contemplated hereby except as may be required by applicable
law or as otherwise contemplated herein.
5.2 Full Access and Disclosure.
(a) The Purchaser shall afford to Gulf Coast and the
Sellers, and their counsel, accountants and other authorized
representatives reasonable access during business hours to the
Purchaser's facilities, properties, books and records in order that
the Sellers may have full opportunity to make such reasonable
investigations as they shall desire to make of the affairs of the
Purchaser; and the Purchaser shall cause its officers, employees and
auditors to furnish such additional financial and operating data and
other information as the Sellers shall from time to time reasonably
request including, without limitation, any internal control
recommendations applicable to the Purchaser made by the Purchaser's
independent auditors in connection with any examination of the
Purchaser's financial statements and books and records.
(b) From time to time prior to the Closing Date, the
Purchaser shall promptly supplement or amend information previously
delivered to Gulf Coast and/or the Sellers with respect to any matter
hereafter arising which, if existing or occurring at the date of this
Agreement, would have been required to be set forth herein or
disclosed.
(c) The Purchaser shall fully cooperate in connection
with any "due diligence" examination performed by Gulf Coast or the
Sellers with respect to the business of the Purchaser. For purposes
of this Section 5.2, "Purchaser" shall mean and include AmeriPath and
its Subsidiaries.
ARTICLE VI
OTHER AGREEMENTS
The parties hereto further agree, on or before the Closing Date, as
follows:
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6.1 Further Assurances. Subject to the terms and conditions of
this Agreement, each of the parties hereto shall use its best efforts to take,
or cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable Regulations to consummate and
make effective the transactions contemplated by this Agreement. In furtherance
and not in limitation of the preceding sentence, the parties hereto shall use
their best efforts to cause the Closing to take place on or before October 31,
1996. If at any time after the Closing Date the Purchaser shall consider or be
advised that any further deeds, assignments or assurances in law or in any
other things are necessary, desirable or proper to vest, perfect or confirm, of
record or otherwise, in the Purchaser (or Gulf Coast, as appropriate), the
title to any property or rights of the Sellers acquired or to be acquired by
reason of, or as a result of, the acquisition, the Sellers agree that the
Sellers shall execute and deliver all such proper deeds, assignments and
assurances in law and do all things necessary, desirable or proper to vest,
perfect or confirm title to such property or rights in Gulf Coast and otherwise
to carry out the purpose of this Agreement.
6.2 Agreement to Defend. In the event any action, suit,
proceeding or investigation of the nature specified in Sections 7.2 or 8.2 is
commenced, whether before or after the Closing Date, all the parties hereto
agree to cooperate and use their best efforts to defend against and respond
thereto.
6.3 Consents. Without limiting the generality of Section 6.1,
each of the parties hereto shall use their best efforts to obtain all permits,
authorizations, consents and approvals of all Persons and governmental
authorities necessary, proper or advisable in connection with the consummation
of the transactions contemplated by this Agreement prior to the Closing Date.
6.4 No Solicitation or Negotiation. Unless and until this
Agreement is terminated, neither any Seller nor Gulf Coast through its
directors, officers, employees, representatives, agents, advisors, accountants
and attorneys shall initiate, solicit or encourage, directly or indirectly, any
inquiries or the making of any proposal with respect to, or engage in
negotiations concerning, or provide any confidential information or data to any
Person with respect to, or have any discussions with any Persons relating to,
any acquisition, business combination or purchase of all or any significant
asset of, or any equity interest in, Gulf Coast, or otherwise facilitate any
effort or attempt to do or seek any of the foregoing, and shall immediately
cease and cause to be terminated any existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any of the
foregoing. Should Gulf Coast or any Seller be contacted with respect to any
offer, inquiry or proposal, Gulf Coast and the Sellers shall immediately advise
the Purchaser in writing of the name, address and phone number of the contact
and the nature of the inquiry.
6.5 No Termination of Sellers' Obligations by Subsequent
Incapacity, Etc. The Sellers specifically agree that the obligations of the
Sellers hereunder, including, without limitation, obligations pursuant to
Article XI and Section 6.4 shall not be terminated by their death or
incapacity.
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6.6 Employment Agreements. Gulf Coast and the Sellers shall, at
or prior to the Closing, terminate the existing employment agreements between
Gulf Coast and each of the Sellers, and each Seller shall enter into an
Employment Agreement with AmeriPath Florida in the form of Exhibit 6.6 attached
hereto (the "Employment Agreements").
6.7 Public Announcements. Neither the Sellers nor Gulf Coast nor
any Affiliate, representative or shareholder of either of such Persons, shall
disclose any of the terms of this Agreement to any third party (other than the
Purchaser's advisors and senior lending group and the Sellers' advisors)
without the other party's prior written consent unless required by any
applicable law. The form, content and timing of any and all press releases,
public announcements or publicity statements (except for any disclosures under
or pursuant to Federal or State securities laws in connection with the
registration of AmeriPath's securities or otherwise) with respect to this
Agreement or the transactions contemplated hereby shall be subject to the prior
approval of the Purchaser. No press releases, public announcements or
publicity statements shall be released by either party without prior mutual
agreement.
The parties hereto further agree, from and after the Closing
Date, as follows:
6.8 Deliveries After Closing. From time to time after the
Closing, at the Purchaser's request and without expense to Gulf Coast and
without further consideration from the Purchaser or Gulf Coast, the Sellers
shall execute and deliver such other instruments of conveyance and transfer and
take such other action as the Purchaser reasonably may require to convey,
transfer to and vest in the Purchaser, and to put the Purchaser in possession
of, any rights or property to be sold, conveyed, transferred or delivered
hereunder.
6.9 Non-Competition Covenant.
(a) As a material and valuable inducement for the
Purchaser to enter into this Agreement, pay and deliver the Purchase
Price consideration and consummate the transactions provided for
herein, during the "Restricted Period" (as hereinafter defined), each
Seller agrees that he shall not, directly or indirectly, alone or as a
partner, officer, director, employee, consultant, agent, independent
contractor, member or stockholder of any Person:
(i) engage in the practice of pathology within
the counties of Sarasota, Xxxxxxx, Xxxxxxxxx or Xxx in the
State of Florida (the "Restricted Territory"); or
(ii) from any facility or location, whether within
or without the Restricted Territory, (x) perform pathology
services for any patient, laboratory or health care provider
located in the Restricted Territory or (y) perform pathology
services for any patient, laboratory or health care provider
who was or is a customer, client or patient in the State of
Florida of an AmeriPath Affiliate or who is a prospective
customer, client or patient in the State of Florida of an
AmeriPath Affiliate; except that it shall not be a violation
of this Section 6.9 for the Sellers
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to perform pathology services in the Restricted Territory
during the Restricted Period (a) as an employee of a local,
federal or state government or agency; (b) in performing the
Sellers's duties as a member of the United States military
services or the National Guard; or (c) on a locum tenens
basis; or
(iii) engage in the business of consolidating
pathology practices in the United States.
(b) As used in this Agreement, the term "Restricted
Period" shall mean and include a period of five (5) years, from the
Closing to the fifth (5th) anniversary of the Closing; provided,
however, that if a Seller's employment by an AmeriPath Affiliate is
terminated sooner, the Restricted Period shall mean and include a
period of two (2) years after such termination; provided, further,
that the Restricted Period shall mean and include five (5) years from
the termination of such Seller's employment if the employment is
terminated due to the fraud or willful misconduct of Seller.
(c) Each Seller further agrees that during the Restricted
Period, the Seller will not knowingly, directly or indirectly, (a)
solicit the employment of any employee, agent or consultant of any
AmeriPath Affiliate who was such at any time during the twelve (12)
months preceding the Sellers's termination of employment with the
AmeriPath Affiliate, or (b) induce any employee of an AmeriPath
Affiliate to leave the employ of any such AmeriPath Affiliate, unless
in each case the Seller obtains the prior written consent of
AmeriPath.
(d) Each Seller covenants and agrees that the
restrictions set forth in this Section 6.9 are fair, reasonable and
necessary to protect the interests of AmeriPath and its Affiliates,
such restrictions were negotiated and bargained for and the
consideration delivered in connection with this Agreement reflects and
assumes the Seller's strict compliance with, and the enforceability by
the Purchaser of, these restrictions.
(e) Each Seller acknowledges and agrees that the
provisions of Section 6.9 and Section 6.10 are material and of the
essence to this Agreement. In addition, if the scope of any
restriction or covenant contained in either such Section should be or
become too broad or extensive to permit enforcement thereof to its
fullest extent, then such restriction or covenant shall be enforced to
the maximum extent permitted by law, and the Sellers hereby consent
and agree that (a) it is the parties intention and agreement that the
covenants and restrictions contained herein be enforced as written,
and (b) in the event a court of competent jurisdiction should
determine that any restriction or covenant contained herein is too
broad or extensive to permit enforcement thereof to its fullest
extent, the scope of any such restriction or covenant may be modified
accordingly in any judicial proceeding brought to enforce such
restriction or covenant, but should be modified to permit enforcement
of the restrictions and covenants contained herein to the maximum
extent the court, in its judgment, will permit.
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6.10 Non-disclosure; Confidentiality.
(a) Confidential Information. By virtue of each Seller's
employment, association or involvement with an AmeriPath Affiliate,
the Sellers may obtain confidential or proprietary information
developed, or to be developed, by an AmeriPath Affiliate.
"Confidential Information" means all proprietary or business-sensitive
information, whether in oral, written, graphic, machine-readable
tangible form, and whether or not registered, and including all notes,
plans, records, documents and other evidence thereof, including but
not limited to all: patents, patent applications, copyrights,
trademarks, trade names, service marks, service names, "know- how,"
patient lists, details of client or consulting contracts, pricing
policies, operational methods, marketing plans or strategies, product
development techniques or plans, procurement and sales activities,
promotion and pricing techniques, credit and financial data concerning
customers, business acquisition plans or any portion or phase of any
scientific or technical information, discoveries, computer software or
programs used or developed in whole or in part by any AmeriPath
Affiliate (including source or object codes), processes, procedures,
formulas or improvements of any AmeriPath Affiliate; algorithms;
computer processing systems and techniques; price lists; customer
lists; procedures; improvements, concepts and ideas; business plans
and proposals; technical plans and proposals; research and
development; budgets and projections; technical memoranda, research
reports, designs and specifications; new product and service
developments; comparative analyses of competitive products, services
and operating procedures; and other information, data and documents
now existing or later acquired by an AmeriPath Affiliate, regardless
of whether any of such information, data or documents qualify as a
"trade secret" under applicable Federal or State law. "Confidential
Information" shall not include (a) any information which is in the
public domain during the period of service by the Sellers or becomes
public thereafter, provided such information is not in the public
domain as a consequence of disclosure by a Seller in violation of this
Agreement, and (b) any information not considered confidential
information by similar enterprises operating in the clinical or
anatomical laboratory industry or otherwise in the ordinary course.
(b) Non-Disclosure. Each Seller agrees that, except as
directed by the Seller's employer (which employer is an AmeriPath
Affiliate), as required or otherwise contemplated under this Agreement
or the Employment Agreement or as otherwise required by law, he will
not at any time (during the term of the Seller's employment by an
AmeriPath Affiliate or at any time thereafter), except as may be
expressly authorized by the AmeriPath Affiliate in writing, disclose
to any Person or use any Confidential Information whatsoever for any
purpose whatsoever, or permit any Person whatsoever to examine and/or
make copies of any reports or any documents or software (whether in
written form or stored on magnetic, optical or other mass storage
media) prepared by him or that come into his possession or under his
control by reason of his employment by an AmeriPath Affiliate or by
reason of any consulting or software development services he has
performed or may in the future perform for an AmeriPath Affiliate
which contain or are derived from Confidential Information. Each
Seller further agrees that while
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employed at an AmeriPath Affiliate, no Confidential Information shall
be removed from the AmeriPath Affiliate's business premises, without
the prior written consent of such AmeriPath Affiliate.
(c) AmeriPath Group Property. As used in this Agreement,
the term "AmeriPath Group Property" means all documents, papers,
computer printouts and disks, records, customer or patient lists,
files, manuals, supplies, computer hardware and software, equipment,
inventory and other materials that have been created, used or obtained
by any AmeriPath Affiliate, or otherwise belonging to any AmeriPath
Affiliate, as well as any other materials containing Confidential
Information as defined above. Each Seller recognizes and agrees that:
(i) All the AmeriPath Group Property shall be and
remain the property of the AmeriPath Affiliate to which such
belongs;
(ii) The Sellers will preserve, use and hold the
AmeriPath Group Property only for the benefit of AmeriPath and
its Affiliates and to carry out the business of the AmeriPath
Affiliate, AmeriPath and its Affiliates; and
(iii) When the Seller's employment is terminated,
the Seller will immediately deliver and surrender to the
AmeriPath Affiliate all the AmeriPath Group Property,
including all copies, extracts or any other types of
reproductions, which the Seller has in his possession or
control.
6.11 Rule 144 Best Efforts. Following such time, if any, that
AmeriPath is or may become, and solely while AmeriPath is, a public company
with its securities registered under the Securities Act, and listed or quoted
for trading by a national securities exchange or inter-dealer quotation system,
AmeriPath will use its best efforts to see that AmeriPath is in compliance with
the requirements of Rule 144 under the Securities Act applicable to the issuer
of securities, so as to facilitate non-registered sales of AmeriPath Stock by
the Sellers who then own AmeriPath Stock consistent with the requirements and
limitations of Rule 144. Nothing in this Section 6.11 shall be deemed as
either (i) any representation or warranty that Ameripath will become or remain
a public company with securities registered under the Securities Act, or (ii)
any covenant or agreement by AmeriPath to register, under federal or state
securities laws or otherwise, any AmeriPath securities issued to, or held by,
the Sellers.
6.12 Collected Accounts Receivable. The Sellers shall prepare a
schedule of the accounts receivable of Gulf Coast existing on the Closing Date
(the "Closing Date Receivables"). Purchaser shall use its reasonable best
efforts to collect the Closing Date Receivables. Amounts collected in excess
of $960,000 that are attributable to Closing Date Receivables shall be paid
over to Sellers as additional Purchase Price as follows: within ten (10) days
after the sixth monthly anniversary of the Closing, a lump sum equal to the
collected amount of the Closing Date Receivables that is in excess of $960,000,
if any, and, thereafter, any Closing Date Receivables collected in excess of
$960,000 shall be paid to Sellers on a monthly basis on the
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tenth day of each month following such collections, until such time as the
Closing Date Receivables have been collected in full or, in the good faith
judgment of AmeriPath's senior management, become uncollectible.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER
Each and every obligation of the Purchaser under this Agreement shall
be subject to the satisfaction, on or before the Closing Date, of each of the
following conditions, unless waived in writing by the Purchaser:
7.1 Representations and Warranties; Covenants and Agreements. The
representations and warranties of the Sellers contained in Article II and
elsewhere in this Agreement and all information contained in any exhibit,
certificate, schedule or attachment hereto or in any writing delivered by, or
on behalf of, the Sellers or Gulf Coast to the Purchaser, shall be true and
correct when made and shall be true and correct in all material respects on the
Closing Date as though then made, except as expressly provided herein. The
Sellers and Gulf Coast shall have performed and complied with all agreements,
covenants and conditions and shall have made all deliveries required by this
Agreement to be performed, delivered and complied with by them prior to the
Closing Date. The Sellers and the president of Gulf Coast shall have executed
and delivered to the Purchaser a certificate, dated the Closing Date,
certifying to the foregoing.
7.2 No Injunction. No preliminary or permanent injunction or
other Order, decree or ruling issued by any Authority, or any Regulation
promulgated or enacted by any Authority shall be in effect, which would prevent
the consummation of the transactions contemplated hereby.
7.3 Third Party Consents. The Purchaser, the Sellers and Gulf
Coast shall have obtained all consents, approvals, waivers or other
authorizations with respect to the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby, such
that the contracts and leases listed in Schedule 7.3 hereto shall remain in
effect (without default, acceleration, termination, assignment, right of
termination or assignment, payment, increase in rates or compensation payable,
penalty, interest or other adverse effect) from and after the Closing Date as
such contracts and leases operated and were in effect before the Closing Date.
7.4 Regulatory Approvals. The Federal and State regulatory
agencies or authorities listed in Schedule 7.4 hereto shall have approved the
applications listed in such Schedule with respect to the change of control
represented by the transactions contemplated by this Agreement, and such
approval shall not impose financial obligations on the Purchaser that are
objectionable to it.
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7.5 No Material Adverse Change. There shall have been no Material
Adverse Change since the date of this Agreement. The Purchaser shall have
received a certificate (which shall be addressed to the Purchaser), dated the
Closing Date, of the president and chief financial officer of Gulf Coast,
certifying to the foregoing.
7.6 Opinion of Sellers' Counsel. The Purchaser shall have
received an opinion of counsel to the Sellers and Gulf Coast (which will be
addressed to the Purchaser and its senior lenders), dated the Closing Date, in
the form of Exhibit 7.6 hereto.
7.7 Employment Agreements. The Sellers shall have terminated
their existing employment agreements with Gulf Coast and each of the Sellers
shall have executed and delivered to the Purchaser an Employment Agreement with
AmeriPath Florida in the form of Exhibit 6.6 attached hereto.
7.8 Delivery of Gulf Coast Share Certificates. The Sellers shall
have executed and delivered to AmeriPath this Agreement, or a counterpart
hereof, and shall have delivered at the Closing stock certificates representing
all of the Gulf Coast Shares, duly endorsed for transfer to the Purchaser,
together with stock powers duly executed in blank.
7.9 Shareholders' Agreement. At the Closing, the Sellers shall
have executed and delivered to AmeriPath a counterpart signature page to that
certain Shareholders' Agreement, dated as of February 29, 1996, by and among
AmeriPath and each of the stockholders of AmeriPath (the "Shareholders'
Agreement"), pursuant to which each Seller agrees to be bound by all of the
provisions of the Shareholders' Agreement, in accordance with their terms, to
the same extent as if he had been an original signatory thereto.
7.10 Subordination Agreement. At the Closing, the Sellers shall
have executed and delivered the Subordination Agreement, attached hereto as
Exhibit 7.10, pursuant to which each Seller agrees to be bound by all of the
provisions of the Subordination Agreement in accordance with their terms.
7.11 Gulf Coast Charter Amendments. Gulf Coast shall have taken
all appropriate and required board of director and shareholder action to
approve, shall have filed with the Florida Department of State in form
acceptable for filing, and shall have delivered to the Purchaser, an amendment
to Gulf Coast's articles of incorporation, which amendment (i) shall be in form
and substance satisfactory to AmeriPath, and (ii) shall include the Gulf Coast
Charter Amendments (as such term is defined in Section 4.9 hereof).
7.12 Satisfaction of Indebtedness; Creditor Consents. Gulf Coast
shall have satisfied all outstanding obligations under its loans from
shareholders set forth on Schedule 7.12 hereto. Such shareholders shall have
agreed in writing with Gulf Coast as to the amounts owed in order to have been
paid in full. Gulf Coast shall have obtained from the shareholders set forth
on Schedule 7.12 and shall provide to the Purchaser at Closing such releases as
shall be required by the Purchaser and its lenders.
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7.13 Vehicles and Personal Property. Prior to the Closing, Gulf
Coast shall have transferred to Sellers the vehicles and personal property set
forth on Schedule 7.13. Purchaser shall not acquire any rights nor assume any
obligations with respect to the items listed on Schedule 7.13.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF THE SELLERS
Each and every obligation of the Sellers under this Agreement shall be
subject to the satisfaction, on or before the Closing Date, of each of the
following conditions unless waived in writing by the Sellers:
8.1 Representations and Warranties; Performance. The
representations and warranties of the Purchaser contained in Article III and
elsewhere in this Agreement and all information contained in any exhibit,
schedule or attachment hereto, delivered by or on behalf of the Purchaser to
the Sellers, shall be true and correct in all material respects when made and
shall be true and correct in all material respects on the Closing Date as
though then made, except as expressly provided herein. The Purchaser shall
have performed and complied in all material respects with all agreements,
covenants and conditions required by this Agreement to be performed and
complied with by them prior to the Closing Date. The Chief Operating Officer
of the Purchaser shall have delivered to the Sellers a certificate, dated the
Closing Date, certifying to the foregoing.
8.2 No Injunction. No preliminary or permanent injunction or
other Order, decree or ruling issued by any Authority, or any Regulation
promulgated or enacted by any Authority shall be in effect, which would prevent
the consummation of the transactions contemplated hereby.
8.3 Purchase Consideration. The Sellers shall have received the
consideration (in the form of cash and Contingent Notes) required to be
delivered at Closing and to which the Sellers are entitled pursuant to Section
1.1 (and as set forth on Schedule 1.1.) hereof.
8.4 Employment Agreements. AmeriPath Florida shall have executed
and delivered to each of the Sellers the Employment Agreements.
ARTICLE IX
CLOSING
9.1 Closing. Unless this Agreement shall have been terminated or
abandoned pursuant to the provisions of Article X hereof, a closing of the
transactions contemplated by this Agreement (the "Closing") shall be held on
October 24, 1996, or on such other date which is mutually
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agreed upon in writing following the satisfaction or waiver of the conditions
to closing set forth in Article VII and Article VIII hereof (the "Closing
Date").
9.2 Closing Deliveries. At the Closing,
(a) the Sellers and Gulf Coast shall deliver or cause to
be delivered to the Purchaser:
(i) a certificate or certificates evidencing all
of the Gulf Coast Shares, duly endorsed for transfer with all
necessary transfer stamps affixed;
(ii) the Officer's Certificates required by
Sections 7.1 and 7.5;
(iii) copies of all consents and approvals required
by Sections 7.3, 7.4 and 7.12;
(iv) the Opinion of Counsel required by Section
7.6;
(v) the Employment Agreements required by
Section 7.7;
(vi) the counterpart signature page to the
Shareholders' Agreement required by Section 7.9;
(vii) the Subordination Agreement required by
Section 7.10;
(viii) a certificate, signed by the secretary of
Gulf Coast, as to the articles of incorporation and by-laws of
Gulf Coast, the resolutions adopted by the board of directors
and shareholders of Gulf Coast in connection with this
Agreement, the incumbency of certain officers of Gulf Coast
and the jurisdictions in which Gulf Coast is qualified to
conduct business, in form acceptable to the Purchaser;
(ix) certificates issued by the appropriate
governmental authorities evidencing the good standing, with
respect to both the conduct of business and the payment of all
franchise taxes, of Gulf Coast as of a date not more than ten
(10) days prior to the Closing Date, as a corporation
organized under the laws of the State of Florida and as a
foreign corporation authorized to do business under the laws
of the various jurisdictions where it is so qualified.
(x) such other certified resolutions, documents
and certificates as are required to be delivered by the
Sellers or Gulf Coast pursuant to the provisions of this
Agreement.
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(b) The Purchaser shall deliver to the Sellers:
(i) the consideration (in the form of cash, stock
and Contingent Notes) required to be paid or delivered to the
Sellers at Closing in accordance with Section 1.1 (to be
distributed to the Sellers in accordance with Schedule 1.1).
(ii) the Officer's Certificate required by
Section 8.1; and
(iii) the Employment Agreements required by
Section 8.4;
(iv) such other certified resolutions, documents
and certificates as are required to be delivered by the
Purchaser pursuant to the provisions of this Agreement.
ARTICLE X
TERMINATION AND ABANDONMENT
10.1 Methods of Termination. This Agreement may be terminated and
the transactions herein contemplated may be abandoned at any time:
(a) by mutual consent of the Purchaser, the Sellers and
Gulf Coast;
(b) by the Purchaser or all of the Sellers and Gulf Coast
if this Agreement is not consummated on or before October 31, 1996;
provided, however, that if any party has breached or defaulted with
respect to its respective obligations under this Agreement on or
before such date, such party may not terminate this Agreement pursuant
to this Section 10.1(b), and each other party to this Agreement shall
at its option enforce its rights against such breaching or defaulting
party and seek any remedies against such party, in either case as
provided hereunder and by applicable law; or
(c) by the Purchaser if as of the Closing Date (including
any extensions) any of the conditions specified in Article VII hereof
shall not have been satisfied or if Gulf Coast or any of the Sellers
is otherwise in default under this Agreement.
10.2 Procedure Upon Termination. In the event of termination and
abandonment pursuant to Section 10.1 hereof, and subject to the proviso
contained in Section 10.1(b), this Agreement shall terminate and shall be
abandoned, without further action by any of the parties hereto. If this
Agreement is terminated as provided herein:
(a) each party shall redeliver all documents and other
material of any other party relating to the transactions contemplated
hereby, whether obtained before or after the execution hereof, to the
party furnishing the same;
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(b) all information received by any party hereto with
respect to the business of any other party or Gulf Coast (other than
information which is a matter of public knowledge or which has
heretofore been or is hereafter published in any publication for
public distribution or filed as public information with any
governmental authority) shall not at any time be used for the
advantage of, or disclosed to third parties by, such party to the
detriment of the party furnishing such information; and
(c) no party hereto shall have any further liability or
obligation to any other party under or in connection with this
Agreement; provided, however, the non-breaching or non-defaulting
party shall not be foreclosed from bringing a Claim or cause of
action or otherwise recovering from the breaching or defaulting party.
ARTICLE XI
SURVIVAL OF TERMS; INDEMNIFICATION
11.1 Survival. All of the terms and conditions of this Agreement,
together with the representations, warranties and covenants contained herein or
in any instrument or document delivered or to be delivered pursuant to this
Agreement, shall survive the execution of this Agreement and the Closing
notwithstanding any investigation heretofore or hereafter made by or on behalf
of any party hereto; provided, however, that (a) the agreements and covenants
set forth in this Agreement shall survive and continue until all obligations
set forth therein shall have been performed and satisfied; and (b) all
representations and warranties shall survive and continue until:
(1) with respect to the representations and
warranties in Sections 2.16 (tax matters), 2.18 (ERISA
matters), 2.20 (environmental matters) and 2.30 (health care
regulatory matters), until sixty (60) days following the
expiration of the applicable statute of limitations;
(2) with respect to the representations and
warranties in Sections 2.3 (capitalization), 2.4 (title to the
Gulf Coast Shares) and 2.6 (options and rights on capital
stock), these representations shall survive and continue
forever and without limitation; and
(3) with respect to all other representations and
warranties, the date upon which AmeriPath receives from its
outside auditors the audited financial statements for
AmeriPath's fiscal year ending December 31, 1998 (the "1998
Audit Date"), except for representations, warranties and
indemnities for which an indemnification Claim shall be
pending as of the 1998 Audit Date, in which event such
indemnities shall survive with respect to such Claim until the
final disposition thereof.
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11.2 Indemnification by the Sellers. Subject to this Article XI,
the Purchaser and its officers, directors, employees, shareholders,
representatives and agents shall be indemnified and held harmless by the
Sellers, at all times after the date of this Agreement, against and in respect
of any and all damage, loss, deficiency, liability, obligation, commitment,
cost or expense (including the fees and expenses of counsel) resulting from, or
in respect of, any of the following:
(a) Any misrepresentation, breach of warranty, or
non-fulfillment of any obligation on the part of the Sellers or Gulf
Coast under this Agreement, any document relating thereto or contained
in any schedule or exhibit to this Agreement or from any
misrepresentation in or omission from any certificate, schedule, other
agreement or instrument by the Sellers or Gulf Coast hereunder;
(b) Any and all liabilities of Gulf Coast of any nature
whether accrued, absolute, contingent or otherwise, and whether known
or unknown, existing at the Closing Date to the extent not reflected
and reserved against in the statement of assets and liabilities for
the six months ended June 30, 1996 included in the Financial
Statements or not otherwise adequately disclosed in this Agreement or
the schedules or exhibits thereto, including, without limitation:
(i) All Tax liabilities of Gulf Coast, together
with any interest or penalties thereon or related thereto,
through the Closing Date and any Tax liability of Gulf Coast
arising in connection with the transactions contemplated
hereby. Any Taxes, penalties or interest attributable to the
operations of Gulf Coast payable as a result of an audit of
any tax return shall be deemed to have accrued in the period
to which such Taxes, penalties or interest are attributable;
(ii) All environmental liabilities relating to any
of Gulf Coast's properties, including federal, state and local
environmental liability, together with any interest or
penalties thereon or related thereto, through the Closing
Date, but excluding any amount for which there is an adequate
accrual and reserve on the statement of assets and liabilities
for the six months ended June 30, 1996 included in the
Financial Statements;
(iii) All claims by Medicare, Medicaid, or any
other third party payor relating to reimbursement for services
provided by Gulf Coast prior to the Closing Date
("Reimbursement Claims"). Indemnification by Sellers for
Reimbursement Claims shall include all costs incurred by
Purchaser for such claims, including, but not limited to,
applicable investigative and audit expenses, attorneys fees,
reimbursement costs, and any fines and penalties levied
against Gulf Coast; and
(c) All demands, assessments, judgments, costs and
reasonable legal and other expenses arising from, or in connection
with any Claim incident to any of the foregoing.
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(d) All other Claims of the Purchaser shall be resolved
in accordance with Section 11.4.
11.3 Indemnification by the Purchaser. Subject to this Article XI,
the Sellers and their heirs, assigns, representatives and agents shall be
indemnified and held harmless by the Purchaser, at all times after the date of
this Agreement, against and in respect of any and all damage, loss, deficiency,
liability, obligation, commitment, cost or expense (including the fees and
expenses of counsel) resulting from, or in respect of, any misrepresentation,
breach of warranty, or non-fulfillment of any obligation on the part of the
Purchaser under this Agreement, any document relating thereto or contained in
any schedule or exhibit to this Agreement or from any misrepresentation in or
omission from any certificate, schedule, other agreement or instrument by the
Purchaser hereunder.
11.4 Third-Party Claims. Except as otherwise provided in this
Agreement, the following procedures shall be applicable with respect to
indemnification for third-party Claims. Promptly after receipt by the party
seeking indemnification hereunder (hereinafter referred to as the "indemnitee")
of notice of the commencement of any (a) Tax audit or proceeding for the
assessment of Tax by any taxing authority or any other proceeding likely to
result in the imposition of a Tax liability or obligation or (b) any action or
the assertion of any Claim, liability or obligation by a third party (whether
by legal process or otherwise), against which Claim, liability or obligation
the other party to this Agreement (hereinafter the "indemnitor") is, or may be,
required under this Agreement to indemnify such indemnitee, the indemnitee
will, if a Claim thereon is to be, or may be, made against the indemnitor,
notify the indemnitor in writing of the commencement or assertion thereof and
give the indemnitor a copy of such Claim, process and all legal pleadings. The
indemnitor shall have the right to participate in the defense of such action
with counsel of reputable standing. The indemnitor shall have the right to
assume the defense of such action unless such action (i) may result in
injunctions or other equitable remedies in respect of the indemnitee or its
business; (ii) may result in liabilities which, taken with other then existing
Claims under this Article XI, would not be fully indemnified hereunder; or
(iii) may have an adverse impact on the business or financial condition of the
indemnitee after the Closing Date (including an effect on the Tax liabilities,
earnings or ongoing business relationships of the indemnitee). The indemnitor
and the indemnitee shall cooperate in the defense of such Claims. In the case
that the indemnitor shall assume or participate in the defense of such audit,
assessment or other proceeding as provided herein, the indemnitee shall make
available to the indemnitor all relevant records and take such other action and
sign such documents as are necessary to defend such audit, assessment or other
proceeding in a timely manner. If the indemnitee shall be required by judgment
or a settlement agreement to pay any amount in respect of any obligation or
liability against which the indemnitor has agreed to indemnify the indemnitee
under this Agreement, the indemnitor shall promptly reimburse the indemnitee in
an amount equal to the amount of such payment plus all reasonable expenses
(including legal fees and expenses) incurred by such indemnitee in connection
with such obligation or liability subject to this Article XI.
Prior to paying or settling any Claim against which an
indemnitor is, or may be, obligated under this Agreement to indemnify an
indemnitee, the indemnitee must first supply the
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indemnitor with a copy of a final court judgment or decree holding the
indemnitee liable on such claim or failing such judgment or decree, and must
first receive the written approval of the terms and conditions of such
settlement from the indemnitor. An indemnitor shall have the right to settle
any Claim against it, subject to the prior written approval of the indemnitee,
which approval shall not be unreasonably withheld.
An indemnitee shall have the right to employ its own counsel
in any case, but the fees and expenses of such counsel shall be at the expense
of the indemnitee unless (a) the employment of such counsel shall have been
authorized in writing by the indemnitor in connection with the defense of such
action or Claim, (b) the indemnitor shall not have employed, or is prohibited
under this Section 11.4 from employing, counsel in the defense of such action
or Claim, or (c) such indemnitee shall have reasonably concluded that there may
be defenses available to it which are contrary to, or inconsistent with, those
available to the indemnitor, in any of which events such fees and expenses of
not more than one additional counsel for the indemnified parties shall be borne
by the indemnitor.
11.5 Deductible. Notwithstanding the foregoing provisions of this
Article XI, except for the next succeeding sentence of this Section 11.5, no
indemnification pursuant to this Article XI shall be required of an
indemnifying party hereunder unless and until the aggregate amount due the
indemnified party for all Claims under this Article XI shall exceed $50,000.00
(the "Deductible"). Notwithstanding the foregoing, no Claim (regardless of
amount) that arises out of (i) a breach of any of the representations or
warranties contained in Sections 2.3 (capitalization), 2.5 (title to the
Shares), 2.6 (options and rights on capital stock), 2.16 (tax matters) or 2.31
(selected financial amounts as of Closing) or (ii) an event specified in
Section 11.2(c), shall at any time be subject to the Deductible.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified and supplemented only by a written agreement
signed by Gulf Coast, the Purchaser and the Sellers.
12.2 Entire Agreement. This Agreement, including the schedules and
exhibits hereto and the documents, annexes, attachments, certificates and
instruments referred to herein and therein, embodies the entire agreement and
understanding of the parties hereto in respect of the agreements and
transactions contemplated by this Agreement and supersedes all prior
agreements, representations, warranties, promises, covenants, arrangements,
communications and understandings, oral or written, express or implied, between
the parties with respect to such transactions. There are no agreements,
representations, warranties, promises, covenants, arrangements or
understandings between the parties with respect to such transactions, other
than those expressly set forth or referred to herein.
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12.3 Certain Definitions.
"Affiliate" means, with regard to any Person, (a) any Person,
directly or indirectly, controlled by, under common control of, or
controlling such Person, (b) any Person, directly or indirectly, in
which such Person holds, of record or beneficially, five percent or
more of the equity or voting securities, (c) any Person that holds, of
record or beneficially, five percent or more of the equity or voting
securities of such Person, (d) any Person that, through Contract,
relationship or otherwise, exerts a substantial influence on the
management of such Person's affairs, (e) any Person that, through
Contract, relationship or otherwise, is influenced substantially in
the management of their affairs by such Person, or (f) any director,
officer, partner or individual holding a similar position in respect
of such Person.
"Authority" means any governmental, regulatory or
administrative body, agency, arbitrator or authority, any court or
judicial authority, any public, private or industry regulatory agency,
arbitrator authority, whether international, national, federal, state
or local.
"Claim" means any action, claim, obligation, liability,
expense, lawsuit, demand, suit, inquiry, hearing, investigation,
notice of a violation, litigation, proceeding, arbitration, or other
dispute, whether civil, criminal, administrative or otherwise, whether
pursuant to contractual obligations or otherwise.
"Contract" means any agreement, contract, commitment,
instrument or other binding arrangement or understanding, whether
written or oral.
"Environmental Law" means any Regulation, Order, settlement
agreement or governmental requirement, which relates to or otherwise
imposes liability or standards of conduct concerning mining or
reclamation of mined land, discharges, emissions, releases or
threatened releases of noises, odors or any pollutants, contaminants
or hazardous or toxic wastes, substances or materials, whether as
matter or energy, into ambient air, water, or land, or otherwise
relating to the manufacture, processing, generation, distribution,
use, treatment, storage, disposal, cleanup, transport or handling of
pollutants, contaminants, or hazardous wastes, substances or
materials, including (but not limited to) the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the
Superfund Amendments and Reauthorization Act of 1986, as amended, the
Resource Conservation and Recovery Act of 1976, as amended, the Toxic
Substances Control Act of 1976, as amended, the Federal Water
Pollution Control Act Amendments of 1972, the Clean Water Act of 1977,
as amended, any so-called "Superlien" law, and any other similar
Federal, state or local statutes.
"Environmental Permit" shall mean Permits, certificates,
approvals, licenses and other authorizations relating to or required
by Environmental Law and necessary or desirable for the Corporation's
business.
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"GAAP" means generally accepted accounting principles, applied
on a consistent basis.
"Health Care Laws" means any Federal, state, or local
Regulation or Order, of any Authority, which relates to or otherwise
imposes liability or standards of conduct concerning the licensure,
certification, qualification, or operation of a health maintenance
organization, pharmacy, home health agency or other aspect of a
Corporation's business subject to such Health Care Laws, including but
not limited to Chapter 400, Florida Statutes, governing home health
agencies; Chapter 641, Florida Statues, The Health Maintenance
Organization Act; Chapter 465, Florida Statutes, the Florida Pharmacy
Act; Sections 499.001 to .081, Florida Statutes, the Florida Drug and
Cosmetic Act; Chapter 893, Florida Statutes, the Florida Comprehensive
Drug Abuse Prevention and Control Act; Sections 455.236 to .239,
Florida Statutes, the Patient Self-Referral Act; Section 627.6699,
Florida Statutes, the Employee Health Care Access Act; Sections
409.026 and 409.912, Florida Statutes, 21 U.S.C. Section 301-392, the
Federal Food Drug and Cosmetic Act; 21 U.S.C. Section 821 et seq., the
Federal Drug Abuse Act; Section 1128B of the Social Security Act; The
Clinical Laboratory Improvement Amendments of 1988; 42 U.S.C. Section
1320a-7b, 42 C.F.R. Part 1001, 42 CFR Chapter IV, Subchapter C;
Sections 1876 or 1903 of the Social Security Act; 45 CFR, Part 74; 45
CFR, Part 92; 42 CFR 455.109 Section 306 of the Clean Air Act; 42
U.S.C. Section 1857(h) et seq., Section 508 of the Clean Water Act; 33
U.S.C. Section 1368 et seq., Executive Order 11738 and Environmental
Protection Agency regulations; 40 CFR Part 15, Title VI of the Civil
Rights Act of 1964; 42 U.S.C. Section 2000 d et seq., Section 504 of
the Rehabilitation Act of 1933; 29 U.S.C. Section 7940; Title IX of
the Education Amendments of 1972, 20 U.S.C. Section 1681 et seq., the
Age Discrimination Act of 1975; 42 U.S.C. Section 6101 et seq.,
Section 654 of OBRA '81; 42 U.S.C. Section 9849 and the Americans with
Disabilities Act of 1990; P.L. 101-336, OBRAs 1986 through 1993, as
amended, and any other similar Federal, state or local Regulations.
"Lien" means any security interest, lien, mortgage, pledge,
hypothecation, encumbrance, Claim, easement, restriction or interest
of another Person of any kind or nature.
"Material Adverse Change" means any development or change
which has, had or would have a Material Adverse Effect.
"Material Adverse Effect" means any circumstances, state of
facts or matters which has, or might reasonably be expected to have, a
material adverse effect in respect of Gulf Coast's business,
operations, properties, assets, condition (financial or otherwise),
results, plans, strategies or prospects.
"Order" means any decree, judgment, award, order, injunction,
rule, consent of or by an Authority.
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"Person" means any corporation, partnership, joint venture,
company, syndicate, organization, association, trust, entity,
Authority or natural person.
"Proprietary Rights" means any patent, patent application,
copyright, trademark, trade name, service xxxx, service name, trade
secret, know-how, confidential information or other intellectual
property or proprietary rights.
"Regulation" means any law, statute, rule, regulation,
ordinance, requirement, announcement or other binding action of or by
an Authority.
"Subsidiary" means any Person which the Purchaser or Gulf
Coast, as the case may be, owns, directly or indirectly, 50% or more
of the outstanding stock or other equity interests.
12.4 Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered by hand or mailed, first class
certified mail with postage paid or by overnight receipted courier service:
(a) If to the Sellers or Gulf Coast, to:
Gulf Coast Pathology Associates, Inc.
00 Xxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxxx, M.D., President
with a copy to:
Shackleford, Farrior, Xxxxxxxxx & Xxxxx
000 X. Xxxxxxx Xxxxxxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxx Xxxxx, Esq.
Xxxxxx X. Xxxxxxxxx, M.D., M.B.A.
00 Xxxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
or to such other person or address as the Sellers or
Gulf Coast shall furnish by notice to the Purchaser in writing.
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(b) If to the Purchaser to:
AmeriPath, Inc.
000 Xxxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. New, President
with a copy to:
Greenberg, Traurig, Hoffman,
Lipoff, Xxxxx & Xxxxxxx, P.A.
000 X. Xxx Xxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
or to such other person or address as the Purchaser
shall furnish by notice to Sellers in writing.
12.5 Assignment. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of the other parties,
except that the Purchaser may assign its rights, interests and obligations
hereunder to any Affiliate, and may grant Liens or security interests in
respect of its rights and interests hereunder, without the prior approval of
the Sellers.
12.6 Governing Law. The Agreement shall be governed by the laws of
the State of Florida as to all matters, including but not limited to matters of
validity, construction, effect and performance.
12.7 Consent to Jurisdiction; Service of Process. Gulf Coast and
the Sellers hereby irrevocably submit to the jurisdiction of the state or
federal courts located in Broward County, Florida in connection with any suit,
action or other proceeding arising out of or relating to this Agreement and the
transactions contemplated hereby, and hereby agree not to assert, by way of
motion, as a defense, or otherwise in any such suit, action or proceeding that
the suit, action or proceeding is brought in an inconvenient forum, that the
venue of the suit, action or proceeding is improper or that this Agreement or
the subject matter hereof may not be enforced by such courts.
12.8 Injunctive Relief. The parties hereto agree that in the event
of a breach of any provision of this Agreement, the aggrieved party or parties
may be without an adequate remedy at law. The parties therefore agree that in
the event of a breach of any provision of this Agreement, the aggrieved party
or parties may elect to institute and prosecute proceedings in any court of
competent jurisdiction to enforce specific performance or to enjoin the
continuing breach
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of such provision, as well as to obtain damages for breach of this Agreement.
By seeking or obtaining any such relief, the aggrieved party shall not be
precluded from seeking or obtaining any other relief to which it may be
entitled.
12.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.10 Headings. The article, section and subsection headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement (or any
provision hereof).
12.11 Binding Effect. This Agreement shall not be construed so as
to confer any right or benefit upon any Person other than the signatories to
this Agreement and each of their respective successors and permitted assigns.
12.12 Delays or Omissions; Waiver. No delay or omission to exercise
any right, power or remedy accruing to any party hereto, upon any breach or
default of any other party under this Agreement, shall impair any such right,
power or remedy of such party nor shall it be construed to be a waiver of, or
estoppel with respect to, any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any
other breach or default theretofore or thereafter occurring. Any waiver,
permit, consent or approval of any kind or character on the part of any party
hereto of any breach or default under this Agreement, or any waiver on the part
of any party of any provisions, obligations, covenants, agreements or
conditions of this Agreement must be made in writing and shall be effective
only to the extent specifically set forth in such writing. All remedies,
either under this Agreement or by law or otherwise afforded to any party, shall
be cumulative and not alternative. Whenever this Agreement requires or permits
consent by or on behalf of any party hereto, such consent shall be given in
writing.
12.13 Severability. Unless otherwise provided herein, if any
provision of this Agreement shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
12.14 Expenses. All fees, costs and expenses (including, without
limitation, legal, auditing and accounting fees, costs and expenses) incurred
in connection with considering, pursuing, negotiating, documenting or
consummating this Agreement and the transactions contemplated hereby shall be
borne and paid solely by the party incurring such fees, costs and expenses.
12.15 Attorneys' Fees. If any party to this Agreement seeks to
enforce the terms and provisions of this Agreement, then the prevailing party
in such action shall be entitled to recover from the losing party all costs in
connection with such action, including without limitation reasonable attorneys'
fees, expenses and costs incurred at the trial court and all appellate levels.
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IN WITNESS WHEREOF, the parties hereto have made and entered into this
Agreement the date first hereinabove set forth.
PURCHASER:
AMERIPATH, INC.,
By: /s/ Xxxxxx X. Xxxx
----------------------------------------------
Xxxxxx X. Xxxx, Executive Vice President and
Chief Financial Officer
SELLERS:
/s/ Xxxxxxx Xxxxxxxxx
-------------------------------------------------
XXXXXXX XXXXXXXXX, M.D.
/s/ Xxxxxx Xxxxxxxxx
-------------------------------------------------
XXXXXX XXXXXXXXX, M.D.
GULF COAST PATHOLOGY ASSOCIATES,
INC. F/K/A XXXXXXXXX & KALEMERIS,
M.D., P.A.
By: /s/ Xxxxxxx Xxxxxxxxx
----------------------------------------------
Xxxxxxx Xxxxxxxxx, M.D., President
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