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ASSET PURCHASE AGREEMENT EXHIBIT 2
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THIS ASSET PURCHASE AGREEMENT (the "Agreement"), effective as of
December 1, 1999, is by and among AmSurg La Jolla, Inc., a Tennessee corporation
("AmSurg"), AmSurg Corp., a Tennessee corporation, as the owner of all the
outstanding capital stock of AmSurg ("ASC"), La Jolla Gastroenterology Medical
Group, Inc., a California corporation ("Seller"), and the individuals set forth
on the signature pages attached hereto (individually "Doctor" and collectively
"Doctors").
WHEREAS, AmSurg desires to purchase and Seller desires to sell certain
of its assets, as more fully described herein, upon and subject to the terms and
conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties and covenants of the parties hereinafter set forth,
the parties agree as follows:
ARTICLE 1. PURCHASE AND SALE OF ASSETS
1.1. PURCHASE AND SALE OF ASSETS. Subject to the terms and conditions of
this Agreement, at the Closing, Seller shall sell, transfer, convey, assign and
deliver to AmSurg and AmSurg shall purchase, acquire and accept from Seller an
undivided 51% interest in the assets comprising the business operations of the
endoscopy surgery center (the "Center") owned and operated by Seller and located
in La Jolla, California, tangible or intangible, recorded or unrecorded, known
or unknown, of whatsoever type, kind, description, or nature owned, leased,
held, possessed, vested in or claimed in whole or in part by Seller on the
Closing Date (the "Purchased Assets"), which Purchased Assets shall specifically
include the accounts receivable of the Center, but which shall specifically
exclude cash.
1.2. ASSUMPTION OF LIABILITIES. Except as described herein, AmSurg will not
assume any debts, liabilities, obligations, expenses, taxes, contracts or
commitments of Seller or the Center of any kind, character or description,
whether accrued, absolute, contingent or otherwise ("Liabilities"), no matter
whether arising before or after the Closing, and whether or not reflected or
reserved against in Seller's or the Center's financial statements, books of
account or records. Seller will indemnify AmSurg against and hold it harmless
from any such Liabilities. AmSurg will cause The La Jolla Endoscopy ASC, L.P., a
Tennessee limited partnership (the "L.P."), to assume all Liabilities arising
after the effective date of the transaction which relate to supplies received by
the Center or services rendered to the Center after the effective date of the
transaction, regardless of the date such Liabilities arose.
ARTICLE 2. PURCHASE PRICE
The initial purchase price ("Initial Purchase Price") for the Purchased
Assets shall be $ 1,684,240, which shall be payable as follows: (a) $346,060
cash payable at Closing; (b) $1,238,180 in the form of a promissory note (the
"Note") in the form of Exhibit 1 attached hereto which, pursuant to its terms,
is payable in cash or, at Seller's option, up to ten percent of the principal
amount of the Note is payable in shares of the Class A common stock (the "AmSurg
Common Stock") of ASC; and (c) $100,000 payable as set forth in Section 8.8
hereof. The Initial Purchase Price was determined based on an assumption that
the current expenses of operating the Center and on a going forward basis are
and will be as set forth on Schedule 2. Notwithstanding the foregoing, in the
event that Xxxxxx X. Xxxxxxxxx, M.D., becomes a shareholder of Seller on or
before January 31, 2000, AmSurg shall pay Seller $400,000 in cash as additional
purchase price for the Purchased Assets.
AmSurg and Seller acknowledge that the rule proposed in June 1998 by
the Health Care Financing Administration ("HCFA") providing in part for a change
in the payment methodology and payment rates utilized by HCFA to reimburse
ambulatory surgery centers as it may be adopted or amended (the "Proposed
Rule"), could have a negative effect on the future revenues and earnings of the
Center. In order to address the uncertainty regarding the Proposed Rule and its
effect on the Center, the Initial Purchase Price has been calculated based on
the financial statements for the Center for the calendar year 1998 and the
annualized procedure volume for Medicare cases performed in the Center from
January 1, 1999 through June 30, 1999. The Medicare procedure volume and the
potential percentage reduction in Medicare reimbursement rate changes are set
forth in Schedule 2(a). Schedule 2(b) sets forth what the Initial Purchase Price
would have been without any adjustment for the proposed Medicare reimbursement
rate changes (the "Potential Purchase Price"), and the difference between the
Initial Purchase Price and the Potential Purchase Price (the "Purchase Price
Differential").
Of the Purchase Price Differential on the Closing Date, AmSurg will pay
$1,539, payable in cash. During the six (6) years following the Closing,
commencing
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January 1, 2000, at the end of each six (6) month period thereafter, if a final
version of the Proposed Rule has not been adopted during such period, then
AmSurg will pay as additional consideration ("Additional Purchase Price") an
amount in cash equal to one twelfth (1/12) of the Purchase Price Differential as
set forth on Schedule 2(b), together with interest thereon at the rate equal to
the prime rate as published from time to time by SunTrust Bank in Nashville,
Tennessee, accruing from the Closing Date. In the event that a final version of
the Proposed Rule is adopted during the six (6) years following the Closing,
then the purchase price will be recalculated and adjusted utilizing the formula
set forth on Schedules 2(a) and 2(b) and substituting the final Medicare
reimbursement rates for the proposed Medicare reimbursement rates set forth
therein (the "Adjusted Purchase Price"). If the Adjusted Purchase Price exceeds
the sum of (a) the Initial Purchase Price and (b) any Additional Purchase Price
previously paid by AmSurg (including the payment made at Closing out of the
Purchase Price Differential), AmSurg will pay in cash such amount as additional
consideration within sixty (60) days after such determination. In no event will
the Purchase Price recalculation cause (x) Seller to return any portion of the
Purchase Price previously paid to Seller by AmSurg or (y) the aggregate
consideration paid by AmSurg to exceed the Potential Purchase Price.
ARTICLE 3. CLOSING
3.1. CLOSING. The closing ("Closing") of the sale and purchase of the
Purchased Assets shall take place at the offices of Bass, Xxxxx & Xxxx PLC,
First American Center, Xxxxxxxxx, Xxxxxxxxx 00000, or at such other place or
places as shall be agreed upon by the parties, within ten (10) business days
after the satisfaction of all conditions to the parties' obligations to
consummate the transactions contemplated hereby, which shall in no event be
later than December 31, 1999, or at such other time as shall be agreed upon by
all the parties hereto, but shall be effective for all intents and purposes as
of December 1, 1999 (the "Closing Date").
3.2. OBLIGATIONS OF THE PARTIES AT THE CLOSING.
(a) At the Closing, AmSurg shall deliver to Seller:
(i) the consideration as specified in Article 2 via wire
transfer to an account specified by Seller;
(ii) a copy of resolutions of the Board of Directors of
AmSurg, certified by its Secretary, authorizing the execution, delivery
and performance of this Agreement and the other documents referred to
herein to be executed by AmSurg, and the consummation of the
transactions contemplated hereby;
(iii) a certificate of AmSurg certifying as to the accuracy of
the representations and warranties of AmSurg at and as of the Closing
and that AmSurg has performed or complied with all of the covenants,
agreements, terms, provisions and conditions to be performed or
complied with by AmSurg at or before the Closing;
(iv) the opinion of Bass, Xxxxx & Xxxx PLC, legal counsel for
AmSurg, the terms of which are substantially as set forth in Schedule
11.4; and
(v) such other certificates and documents as Seller or its
counsel may reasonably request.
(b) At the Closing, Seller and Doctors will deliver to AmSurg:
(i) a copy of resolutions of the Board of Directors of Seller,
certified by its Secretary, authorizing the execution, delivery and
performance of this Agreement and the other documents referred to
herein to be executed by Seller, and the consummation of the
transactions contemplated hereby;
(ii) such deeds, bills of sale, endorsements, assignments and
other good and sufficient instruments of conveyance and transfer, in
form and substance reasonably satisfactory to AmSurg, as shall be
effective to vest in AmSurg all of Seller's title to and interest in
the Purchased Assets, all of Seller's books, records and other data
relating to the Purchased Assets (except corporate) records and any
other documents and records which Seller is required by law to retain
in its possession, and simultaneously with such delivery, will take
such steps as may be necessary to put AmSurg in actual possession and
operating control of the Purchased Assets;
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(iii) a certificate of the Seller certifying as to the
accuracy of Seller's representations and warranties at and as of the
Closing and that it has performed or complied with all of the
covenants, agreements, terms, provisions and conditions to be performed
or complied with by Seller at or before the Closing;
(iv) a certificate of each of the Doctors certifying as to the
accuracy of Doctors' representations and warranties at and as of the
Closing and that they have performed or complied with all of the
covenants, agreements, terms, provisions and conditions to be performed
or complied with by each of them at or before the Closing;
(v) the opinion of Xxxxxx Xxxxxx Xxxxxxx XxXxxxxx Xxxxxx &
Fognani, L.L.P., legal counsel to Seller and Doctors, in substantially
the form of Schedule 10.6; and
(vi) such other certificates and documents as AmSurg or its
counsel may reasonably request.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES BY SELLER
Seller represents and warrants as follows:
4.1. ORGANIZATION. Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of California with full power
and authority to conduct its business as now conducted and to own, lease or
operate its properties and assets as now owned, leased or operated.
4.2. AUTHORIZATION. Seller has full corporate power and corporate authority
to enter into this Agreement and perform its obligations hereunder and carry out
the transactions contemplated hereby. The execution, delivery and performance by
Seller of this Agreement and the consummation of the transactions contemplated
hereby, including the conveyance, assignment, transfer and delivery of the
Purchased Assets, have been duly authorized and approved by all necessary
corporate action, and this Agreement, when executed, will constitute a valid and
binding obligation of Seller enforceable against Seller in accordance with its
terms.
4.3. NO VIOLATION. The execution and delivery of this Agreement by Seller
does not, and the consummation of the transactions contemplated hereby will not,
(a) violate any provision of, or result in the creation of any lien or security
interest under, any agreement, indenture, instrument, lease, security agreement,
mortgage or lien to which Seller is a party or by which any of Seller's assets
or properties are bound which violation or lien would have a material adverse
effect on the business or operations of Seller or the Center; (b) violate any
provision of the [partnership agreement] [charter or bylaws] of Seller; (c)
violate any order, arbitration award, judgment, writ, injunction, decree,
statute, rule or regulation applicable to Seller which violation would have a
material adverse effect on the business or operations of Seller or the Center;
or (d) violate any other contractual or legal obligation or restriction to which
Seller is subject which violation would have a material adverse effect on the
business or operations of Seller or the Center.
4.4. FINANCIAL INFORMATION. Seller has delivered to AmSurg: (a) statements
of Center charges and cash receipts by month for the year ended December 31,
1998 and the six (6) months ended June 30, 1999, (b) cash basis unaudited
statements of income for the Center for the year ended December 31, 1998 and the
six (6) months ended June 30, 1999, (c) a cash basis unaudited balance sheet of
the Center at November 30, 1999, and (d) details of patient accounts receivable
for the Center at the Closing (hereinafter collectively referred to as
"Financial Information"), all of which are attached as Schedule 4.4. The
Financial Information fairly presents the assets, liabilities, financial
condition and results of operation of the Center as at the respective dates
thereof and for the periods therein referred to, prepared on a cash basis and
accurately reflects the revenues and expenses of the Center for the periods
covered thereby and, in particular, reflects all expenses reasonably necessary
for the operation of the Center as a stand-alone entity consistent with past
practice. The Financial Information reflects the consistent application of such
accounting principles throughout the periods involved.
4.5. OWNERSHIP OF PURCHASED ASSETS. Seller owns and possesses and has good
and marketable title to all of the Purchased Assets, free and clear of all
mortgages, pledges, liens, security interests, conditional sale agreements,
defects, charges, encumbrances and rights of third parties, and no conditions
exist which could give rise to any such mortgage, pledge, lien, security
interest,
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defect, charge, encumbrance on, or right of any such third party to, the
Purchased Assets.
Schedule 4.5 contains an accurate and complete description of the
Purchased Assets, which include, but are not limited to, supplies, inventory,
uncollected accounts receivable and equipment owned by Seller, and which are all
of the assets which to Seller's knowledge are reasonably necessary for the
continued operation of the Center as it is now being conducted. All of the
Purchased Assets are in good working condition and repair, normal wear and tear
excepted, and are reasonably adequate for the uses for which they are intended.
Schedule 4.5 also sets forth the current book value of all equipment included in
the Purchased Assets.
4.6. NO LIABILITIES OR ADVERSE CONDITIONS. Except as and to the extent of
the amounts specifically reflected in the Financial Information, Seller does not
have any material liabilities or obligations of any nature with respect to the
Center, whether, absolute, accrued, contingent or otherwise and whether due or
to become due (including, without limitation, liabilities for taxes and
interest, penalties and other charges payable with respect thereto).
Furthermore, Seller does not know or have reason to know of any basis
for the assertion against Seller of any such liability or obligation of any
nature not fully reflected in the Financial Information. There are no conditions
existing with respect to any of Seller's facilities, properties, assets or
personnel, which might materially and adversely affect any of the Center's
properties, business or prospects.
4.7. ABSENCE OF CERTAIN CHANGES. Since September 30, 1999, solely with
respect to the Center, Seller has not:
(a) suffered any material adverse change in its working capital,
financial condition, assets, liabilities, business or prospects, or suffered any
material casualty loss (whether or not insured);
(b) made any material change in its business or operations or in the
manner of conducting its business, other than changes in the ordinary course of
business;
(c) incurred any obligations or liabilities (whether absolute, accrued,
contingent or otherwise and whether due or to become due), except items incurred
in the ordinary course of business and consistent with past practice, or
experienced any change in any assumptions or methods of calculating any bad
debt, contingency or other reserve;
(d) paid, discharged or satisfied any claim, lien, encumbrance or
liability (whether absolute, accrued, contingent or otherwise and whether due or
to become due), other than claims, liens, encumbrances or liabilities:
(i) which are reflected in the Financial Information and which
were paid, discharged or satisfied since the date thereof in the
ordinary course of business consistent with past practice, or
(ii) which were incurred and paid, discharged or satisfied since
September 30, 1999 in the ordinary course of business consistent
with past practice;
(e) written off as uncollectible any notes or accounts receivable or
any portion thereof, except for write-offs made in the ordinary course of
business consistent with past practice;
(f) canceled any other debts or claims, or waived any rights, of
substantial value;
(g) sold, transferred or conveyed any of its properties or assets,
except in the ordinary course of business consistent with past practice;
(h) made any capital expenditures or commitments in excess of $10,000
in the aggregate for replacements or additions to property, plant, equipment or
intangible capital assets;
(i) declared, paid or made or set aside for payment of, any
distribution in respect of its outstanding common stock, other than
distributions made in the ordinary course of business consistent with past
practice, or directly or indirectly redeemed, purchased or otherwise acquired
any of its common stock;
(j) made any change in any method of accounting or accounting practice;
(k) granted any increase in the compensation of any officer, employee
or agent of Seller
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who performs services for or on behalf of the Center, (including without
limitation any increase pursuant to any bonus, pension, profit sharing or other
plan or commitment), other than increases in the ordinary course of business
consistent with past practice, or adopted any such plan or other arrangement;
and no such increase or the adoption of any such plan or arrangement, is planned
or required; and
(l) agreed, whether in writing or otherwise, to take any action
described in this Section 4.7.
4.8. TAXES. Seller has filed all federal, state and local tax returns
required to be filed by it through the date hereof and has paid all taxes and
assessments (including, without limitation, income, excise, unemployment, social
security, occupation, franchise, property, sales and use taxes, services taxes,
import duties or charges, and all penalties and interest with respect thereto)
due and payable therefrom. Seller has not signed any extension agreement with
any taxing authority and knows of no open or questionable matters for any prior
periods. All taxes and assessments relating to or affecting the operations of
the Center through the date hereof have been paid.
4.9. LITIGATION. There is no claim, litigation, investigation or proceeding
pending or, to Seller's knowledge, threatened at law or in equity or before any
court, legislative or administrative tribunal or governmental agency which
questions the validity of this Agreement or which, if adversely determined or
publicly disclosed, would have a material adverse effect on the business or
operations of the Center. Schedule 4.9 sets forth a true and accurate
description of all claims, actions, investigations or proceedings relating to
the Center and its operations initiated since January 1, 1996.
4.10. COMPLIANCE WITH LAWS AND OTHER REGULATIONS. Seller is in compliance in
all material respects with all requirements of applicable laws, rules,
regulations, orders, ordinances, judgments and decrees of all governmental
bodies or agencies (federal, state or local) (collectively, "Laws") relating to
or affecting the operations of the Center. Seller has not received any notice
of, or notice of any investigation of, a possible violation of any applicable
Laws, or any other Law or requirement relating to or affecting the operations of
the Center.
Seller has all required licenses, permits, certificates, authorizations
and agreements needed for the ownership and efficient operation of the Center,
all of which are listed on Schedule 4.10. Seller knows of no act or omission
occurring on or before the date hereof which would subject Seller or the Center
to the reasonable likelihood of any fine or suspension of any license, permit,
certificate, authorization or agreement.
The representations contained in this Section 4.10 relate solely to the
operation of the Center prior to the Closing Date.
4.11. CONTRACTS; SIGNIFICANT PAYORS. Schedule 4.11 is a complete and accurate
list of all individual payors, or group of affiliated payors, that accounted for
more than 5% of the Center's revenues in any two of the previous three years or
is expected to account for more than 5% of the Center's revenues in the current
year or the next year ("Significant Payors").
All contracts, agreements and instruments, including, but not limited
to, third party provider agreements and agreements with Significant Payors, to
which Seller is a party and which are necessary for the ownership and efficient
operation of the Center, are in full force and effect; there have been no
threatened cancellations thereof nor outstanding disputes thereunder, and Seller
has not breached any provision of, nor does there exist any default in any
material respect under, or event (including the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby) which
is, or with the giving of notice or the passage of time or both would become, a
breach or default in any material respect under the terms of any such contract,
instrument or agreement. Seller has no reason to believe that any Significant
Payor intends to terminate any such contract, instrument or agreement, or
intends to withhold its consent to the assignment thereof, to the L.P. by
Seller.
4.12. ACCOUNTS RECEIVABLE. All accounts and notes receivable of the Center,
whether reflected in the Financial Information or otherwise, represent services
actually provided in the ordinary course of business; all such receivables are
current and Seller has no reason to believe that they are not collectible in
accordance with their respective terms consistent with past practice; and none
of such receivables is subject to any counterclaim or set-off, other than normal
discounts, allowances and bad debts consistent with past practice.
4.13. REPORTS AND RETURNS. All reports and returns heretofore required by
federal, state or municipal authorities with respect to the operations of the
Center and
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all reports and returns to the various governmental authorities which control,
directly or indirectly, any of the Center's activities, have been filed and all
sums heretofore due with respect to such reports and returns have been paid.
4.14. DEFAULTS. Seller is not in default under, and no event has occurred
which, with the giving of notice or the passage of time, or both, would result
in a default under, any outstanding indenture, mortgage, contract, agreement or
other instrument with respect to the Center to which Seller is a party which
default would have a material adverse effect on the business or operations of
the Center. The execution, delivery and performance by Seller of this Agreement
and the transactions contemplated hereby will not violate any provision of, or
result in the breach of, or constitute a default under, or require any consent
under, any law, or any order, writ, injunction or decree of any court,
governmental agency or arbitration tribunal, or any material contract, agreement
or instrument with respect to the Center to which Seller is a party or by which
Seller is bound.
4.15. EMPLOYEES; INDEPENDENT CONTRACTORS.
(a) Schedule 4.15(a) sets forth the names and titles of all employees
of Seller who perform services in or on behalf of the Center, and the annual
rate of compensation (including bonuses) being paid to each such employee as of
the most recent practicable date. The employees listed on Schedule 4.15(a),
constitute all of the employees who are in any way necessary to the continued
operation of the Center as it is now being conducted.
(b) Schedule 4.15(b) hereto contains a list of each employment, bonus,
deferred compensation, pension, stock option, stock appreciation right, profit
sharing or retirement plan, arrangement or practice and each other agreement or
fringe benefit plan, arrangement or practice of Seller, whether formal or
informal, whether legally binding or not and whether affecting one or more of
its employees who perform services in or on behalf of the Center. Copies of each
such agreement or plan have heretofore been delivered to AmSurg. Seller does not
have any commitment, whether formal or informal, and whether legally binding or
not (i) to create any additional such agreement, plan, arrangement or practice;
(ii) to modify or change any such agreement, arrangement, plan or practice; or
(iii) to maintain for any period of time any such agreement, arrangement, plan
or practice, except as described on Schedule 4.15(b).
(c) Schedule 4.15(c) hereto contains a list of all services provided to
the Center for which Seller contracts with third parties. Copies of each such
agreement previously have been provided to AmSurg. Schedule 4.15(c) contains a
description of each such oral agreement.
4.16. CONSENTS AND APPROVALS. Seller has obtained all consents, approvals,
authorizations and orders of third parties, including governmental authorities,
necessary for the authorization, execution and performance of this Agreement by
Seller, which consents, approvals, authorizations and orders are listed on
Schedule 4.16.
4.17. YEAR 2000 COMPLIANCE. Each system, comprised of software, hardware,
databases or embedded control systems (microprocessor controlled or controlled
by any robotic or other device) (collectively, a "System") that constitutes any
material part of, or is used in connection with the business operations of the
Center, which shall not include those systems owned and maintained by the Master
Landlord, as defined in Section 8.8, or other third parties over which Seller
has no control or responsibility and which are not Purchased Assets such as the
HVAC, lighting or external phone systems, will not be materially adversely
affected by the advent of the year 2000, the advent of the 21st century or the
transition from the 20th century through the year 2000 and into the 21st
century. Seller has no reason to believe that it or the L.P. may incur material
expenses arising from or relating to the failure of any of its Systems as a
result of the advent of the year 2000, the advent to the 21st century or the
transition from the 20th century through the year 2000 and into the 21st
century. Each System of the Seller is able to accurately process date data,
including, but not limited to, calculating, comparing and sequencing from, into
and between the 20th century (though year 1999), the year 2000 and the 21st
century, including leap year calculations.
4.18. ACQUISITION FOR INVESTMENT. Seller represents that it is acquiring the
AmSurg Common Stock for its own account for investment with no present intention
of reselling any such AmSurg Common Stock, and not with a view to the resale or
distribution in whole or in part thereof in violation of the Securities Act of
1933, as amended (the "Securities Act").
4.19. SUITABILITY OF INVESTMENT. Seller has carefully considered and has, to
the extent it believes necessary, obtained professional legal, tax and financial
advice concerning the suitability of its acquisition of the AmSurg
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Common Stock for its particular tax and financial situation. Seller is capable
of evaluating and has evaluated carefully the merits and risks of its purchase
of the AmSurg Common Stock and is able to bear the economic risk of an
investment therein.
4.20. ACCESS TO INFORMATION. Seller has had access during the course of this
transaction and prior to its purchase of the AmSurg Common Stock to such
information relating to AmSurg and ASC as it has desired. It has had the
opportunity to ask questions of and receive answers form AmSurg and ASC and
their representatives concerning the terms and conditions of the acquisition of
the AmSurg Common Stock and to obtain such additional information about the
business and financial condition of AmSurg and ASC as Seller has requested (to
the extent that AmSurg or ASC possessed such information or could acquire it
without unreasonable effort or expense).
4.21. RESTRICTIONS ON TRANSFER OF THE AMSURG COMMON STOCK. Seller understands
that the AmSurg Common Stock which Seller may elect to receive as part of the
principal payment pursuant to the Note will not been registered under the
Securities Act or any applicable state securities law, and may not be
transferred or sold unless it is subsequently registered under the Securities
Act or an exemption from such registration is available.
4.22. LEGEND ON CERTIFICATES. Seller is aware that the certificates
representing any AmSurg Common Stock issued to Seller shall bear the following
legend and that appropriate stop transfer instructions will be entered in the
stock records of ASC:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT") OR ANY APPLICABLE STATE
SECURITIES LAW. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW
TO OR FOR RESALE IN CONNECTION WITH THE DISTRIBUTION THEREOF. NO DISPOSITION OF
THE SHARES MAY BE MADE IN THE ABSENCE OF (i) AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR (ii) AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY
THAT SUCH DISPOSITION WITHOUT REGISTRATION IS IN COMPLIANCE WITH THE SECURITIES
ACT.
4.23. FULL DISCLOSURE. Neither this Agreement, nor any schedule, exhibit,
list, certificate or other instrument or document delivered to AmSurg pursuant
to this Agreement by or on behalf of Seller, contains any untrue statement of a
material fact or omits to state any material fact required to be stated herein
or therein or necessary to make the statements, representations or warranties
and information contained herein or therein not misleading. Seller has not
withheld from AmSurg disclosure of any event, condition or fact which Seller
knows, or has reasonable grounds to know, may materially adversely affect the
Purchased Assets or the operations of the Center.
4.24. NO BROKER'S FEES. Seller has not done anything to cause or incur any
liability or obligation for investment banking, brokerage, finder's, agent's or
other fees or commissions in connection with the negotiation, preparation,
execution or performance of this Agreement or the consummation of the
transactions contemplated hereby, and Seller does not know of any claim by
anyone for such a fee, commission, expense or charge.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF DOCTORS
Each of the Doctors, severally and not jointly, represents and warrants
as follows:
5.1. AUTHORITY. Such Doctor has full authority to enter into and carry out
the provisions of this Agreement, and this Agreement, when executed, will
constitute a valid and binding legal obligation enforceable against him in
accordance with its terms.
5.2. NO VIOLATION. The execution and delivery of this Agreement by Doctors
does not, and the consummation of the transactions contemplated hereby will not
(a) violate any provision of, or result in the creation of any lien or security
interest under, any agreement, indenture, instrument, lease, security agreement,
mortgage or lien to which such Doctor is a party or by which any of such
Doctors's assets or properties are bound; (b) violate any order, arbitration
award, judgment, writ, injunction, decree, statute, rule or regulation
applicable to such Doctor; or (c) violate any other contractual or legal
obligation or restriction to which such Doctor is subject.
5.3. SHAREHOLDERS OF SELLER. Doctors constitute all of the shareholders
of Seller.
5.4. NO BROKER'S FEES. Such Doctor has not done anything to cause or incur
any liability or obligation for investment banking, brokerage, finder's, agent's
or other fees, commissions, expenses or charges in connection with the
negotiation, preparation, execution or performance of this agreement or the
consummation of the transactions
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contemplated hereby, and Doctor does not know of any claim by anyone for such a
fee, commission, expense or charge.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF AMSURG
AmSurg represents and warrants as follows:
6.1. ORGANIZATION. AmSurg is a corporation duly organized, validly existing
and in good standing under the laws of the State of Tennessee. AmSurg has full
corporate power and corporate authority to carry on its business as now
conducted and to own, lease or operate its properties and assets as now owned,
leased or operated.
6.2. AUTHORIZATION. AmSurg has full corporate power and corporate authority
to enter into this Agreement and perform its obligations hereunder and carry out
the transactions contemplated hereby. The execution, delivery and performance by
AmSurg of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized and approved by all necessary corporate action.
This Agreement, when executed, will constitute a legal, valid and binding
obligation of AmSurg enforceable against it in accordance with its terms.
6.3. NO VIOLATION. The execution and delivery of this Agreement by AmSurg
does not, and the consummation of the transactions contemplated hereby will not,
(a) violate any provision of, or result in the creation of any lien or security
interest under, any material agreement, indenture, instrument, lease, security
agreement, mortgage or lien to which AmSurg is a party or by which any of
AmSurg's assets or properties are bound which violation or lien would have a
material adverse effect on the business or operations of AmSurg; (b) violate any
provision of the Charter or Bylaws of AmSurg; (c) violate any order, arbitration
award, judgment, writ, injunction, decree, statute, rule or regulation
applicable to AmSurg which violation would have a material adverse effect on the
business or operations of AmSurg; or (d) violate any other contractual or legal
obligation or restriction to which AmSurg is subject which violation would have
a material adverse effect on the business or operations of AmSurg.
6.4. TAXES. AmSurg has filed all federal, state and local tax returns
required to be filed by it through the date hereof (or has obtained an extension
for such filing) and has paid all taxes and assessments (including without
limitation income, excise, unemployment, social security, occupation, franchise,
property, sales and use taxes, import duties or charges, and all penalties and
interest in respect thereof) due and payable therefrom. AmSurg has not signed
any extension agreement with any taxing authority and knows of no open or
questionable matters for any prior periods.
6.5. LITIGATION. There is no claim, litigation, investigation or proceeding
pending or, to AmSurg's knowledge, threatened against AmSurg at law or in equity
or before any court, legislative or administrative tribunal or governmental
agency which questions the validity of this Agreement or which, if adversely
determined or publicly disclosed, would have a material adverse effect on the
business or operations of AmSurg.
6.6. COMPLIANCE WITH LAW AND OTHER REGULATIONS. AmSurg is in compliance in
all material respects with all requirements of applicable Laws. AmSurg possesses
all required licenses, permits, certificates, and authorizations needed for the
conduct of its business as presently conducted, the failure of which would have
a material adverse effect on the business or operations of AmSurg. AmSurg knows
of no act or omission occurring on or before the date hereof which would subject
AmSurg to the likelihood of any material fine or suspension of any material
license, permit, certificate or authorization.
6.7. REPORTS AND RETURNS. AmSurg has filed all material reports and returns
heretofore required by federal, state or municipal authorities and all material
reports and returns to the various governmental authorities which control,
directly or indirectly, any of its activities, and has paid all sums heretofore
due with respect to such reports and returns.
6.8. DEFAULTS. AmSurg is not in default under, and no event has occurred
which, with the giving of notice or the passage of time, or both, would result
in a default under, any outstanding indenture, mortgage, contract or agreement
to which AmSurg is a party, which default would have a material adverse effect
on the business or operations of AmSurg.
The execution, delivery and performance by AmSurg of this Agreement and
the transactions contemplated hereby will not violate any provision of, or
result in the breach of, or constitute a default under, or require any consent
under, any law, or any order, writ, injunction or decree of any court,
governmental agency or arbitration tribunal, or any material contract, agreement
or instrument to which AmSurg is a party or by which AmSurg is bound.
6.9. CORPORATE DOCUMENTS. AmSurg has made available to Seller and Doctors
for inspection by Seller
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and its authorized representatives, a copy of its Charter, as amended to the
date hereof, certified to be a true and correct copy thereof by the Secretary of
State of Tennessee, and the minute books of AmSurg containing the Bylaws and all
records of the proceedings, meetings, actions and consents of the shareholders
and the board of directors (and any committees thereof) of AmSurg.
6.10. SEC FILINGS. Any and all periodic reports and definitive proxy
statements filed by AmSurg with the Securities Exchange Commission ("SEC")
through and including the effective date of this Agreement, have been duly
filed, complied in all respects with the requirements of the Securities Exchange
Act of 1934 applicable to such filings. None of such filings contained any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, misleading, except for such statements, if any, as
have been modified or superseded by subsequent filings prior to the date hereof.
The consolidated financial statements of AmSurg and the related notes and
schedules included in such filings with the SEC comply as to form in all
material respects with the applicable accounting requirements and with the
published rules and regulations of the SEC, and present fairly in all material
respects the consolidated financial position of AmSurg and its subsidiaries in
accordance with generally accepted accounting principles as of the dates
indicated, and the results of its operations and changes and financial position
for the periods therein specified (subject, in the case of unaudited interim
financial statements, to normal year-end adjustments). Since the date of filing
with the SEC of AmSurg's most recent Form 10-Q, there has been no material
adverse change in the business, assets, liabilities, properties, operations, or
financial condition of AmSurg and its subsidiaries taken as a whole.
6.11. FULL DISCLOSURE. Neither this Agreement, nor any Schedule, exhibit,
list, certificate or other instrument or document delivered to Seller and
Doctors pursuant to this Agreement by or on behalf of AmSurg contains any untrue
statement of a material fact or omits to state any material fact required to be
stated herein or therein in order to make the statements, representations or
warranties contained herein or therein not misleading.
6.12. NO BROKER'S FEES. AmSurg has not done anything to cause or incur any
liability or obligation for investment banking, brokerage, finder's, agent's or
other fees, commissions, expenses or charges in connection with the negotiation,
preparation, execution or performance of this Agreement or the consummation of
the transactions contemplated hereby, and AmSurg does not know of any claim by
anyone for such a fee or commission.
ARTICLE 7. REPRESENTATIONS AND WARRANTIES OF ASC
ASC represents and warrants as follows:
7.1. ORGANIZATION. ASC is a corporation duly organized, validly existing and
in good standing under the laws of the State of Tennessee. ASC has full
corporate power and corporate authority to carry on its business as now
conducted and to own, lease or operate its properties and assets as now owned,
leased or operated.
7.2. AUTHORIZATION. ASC has full corporate power and corporate authority to
enter into this Agreement and perform its obligations hereunder and carry out
the transactions contemplated hereby. The execution, delivery and performance by
ASC of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized and approved by all necessary corporate action.
The Agreement, when executed, will constitute a legal, valid and binding
obligation of ASC enforceable against it in accordance with its terms.
7.3. CORPORATE DOCUMENTS. ASC has made available to Seller and Doctors for
inspection by Seller and its authorized representatives, a copy of its Charter,
as amended to the date hereof, certified to be a true and correct copy thereof
by the Secretary of State of Tennessee, and the minute books of ASC containing
the Bylaws and all records of the proceedings, minutes, actions and consents of
the shareholders and the board of directors (and any committees thereof) of ASC.
7.4. FULL DISCLOSURE. Neither this Agreement, nor any exhibit, list,
certificate or other instrument or document delivered to Seller and Doctors
pursuant to this Agreement, by or on behalf of ASC, contains any untrue
statement of a material fact or omits to state any material fact required to be
stated herein or therein in order to make the statements, representations or
warranties contained herein or therein not misleading.
7.5. VALID ISSUANCE. Any shares of AmSurg Common Stock issued to Seller
pursuant to the Note will be validly issued, fully paid and nonassessable.
ARTICLE 8. COVENANTS AND AGREEMENTS OF SELLER AND DOCTORS
Seller and Doctors further covenant and agree that after Closing they
will fulfill the following covenants and agreements unless otherwise consented
to by AmSurg in writing:
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Asset Purchase Agreement/Page 9
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8.1. ACCESS; FURTHER ASSURANCES.
(a) From time to time after the Closing, at AmSurg's request and
without further consideration, Seller and Doctors agree to execute and deliver
such certificates and documents as may be required in connection with any audit
of the Center or its operations.
(b) From time to time after the Closing, at AmSurg's request and
without further consideration, Seller will execute and deliver such other
instruments of sale, transfer, conveyance, assignment and delivery and
confirmation and take such action as AmSurg may reasonably deem necessary or
desirable in order more effectively to transfer, convey and assign to AmSurg and
to place AmSurg in possession and control of and to confirm AmSurg's title to,
the Purchased Assets, and to assist AmSurg in exercising all rights and enjoying
all benefits with respect thereto.
(c) From time to time after the Closing, at AmSurg's request and
without further consideration, Doctors will execute and deliver such other
instruments of sale, transfer, conveyance, assignment and delivery and
confirmation and take such action as AmSurg may reasonably deem necessary or
desirable in order more effectively to transfer, convey and assign to AmSurg and
to place AmSurg in possession and control of and to confirm AmSurg's title to,
the Purchased Assets, and to assist AmSurg in exercising all rights and enjoying
all benefits with respect thereto.
8.2. RESTRICTIVE COVENANTS; CONFIDENTIALITY. Each Doctor agrees that he will
not be an officer, director or employee or consultant of or have any direct or
indirect ownership interest in, or manage, lease, develop or otherwise have any
financial interest in, or receive any compensation from any business or entity
competing with the L.P. within 10 miles of the Center until the later of (a) one
(1) year after Doctor ceases to be a partner shareholder of Seller or (b) five
(5) years after the Closing Date. The foregoing shall not prohibit Doctors from
owning shares of capital stock constituting less than 1% of the outstanding
capital stock of any corporation whose common stock is traded on a national
securities exchange or on The Nasdaq Stock Market. Doctors recognize and
acknowledge that the ascertainment of damages in the event of a breach of this
Section 8.2 would be difficult, and agree that AmSurg, in addition to all other
remedies it may have, shall have the right to injunctive relief if there is such
a breach.
Notwithstanding the foregoing, the parties acknowledge and agree that
Section 8.2 does not require Doctors to perform endoscopy procedures at the
Center or to refer patients to the Center, and imposes no restrictions on where
such procedures are performed or where referrals are made.
8.3. CONFIDENTIALITY.
Except as otherwise required by law, Seller and Doctors will not
disclose at any time to any other person not an employee of AmSurg, ASC or
Seller (or a person otherwise involved in the carrying out of the transactions
contemplated by this Agreement), nor make any public announcement of, the
transactions or terms of the transactions contemplated by this Agreement.
8.4. CONDUCT OF BUSINESS PENDING THE CLOSING. Intentionally Omitted.
8.5. INSURANCE. Seller will include AmSurg and the L.P. as additional
insureds on Seller's professional liability, general property and workers'
compensation insurance policies, if permitted by the insurer under such
policies, and will provide AmSurg with written evidence of such coverage. AmSurg
and ASC will pay the additional cost, if any, for such insurance coverage.
8.6. TRANSFER OF SIGNIFICANT PAYOR AGREEMENTS. Seller and Doctors will take
all action necessary in order to effect the valid assignment to the L.P. of all
agreements with Significant Payors effective as of the Closing Date or within a
reasonable time thereafter.
8.7. SCHEDULES. Intentionally Omitted.
8.8. OBLIGATIONS RELATING TO SUBLEASE; ESCROW. Seller agrees to use its
reasonable and diligent efforts to obtain the consent of Scripps Memorial-Ximed
Medical Center, L.P. ("Master Landlord") to its entering into the Sublease
Agreement by and between Seller and the LP on terms reasonably satisfactory to
L.P. ("Sublease"). Seller shall present to Master Landlord a written request to
approve the Sublease within thirty (30) days of Closing. A portion of the
Initial Purchase Price equal to $100,000 will be paid into an interest-bearing
escrow account at Closing. In the event Master Landlord refuses to grant such
consent, Seller agrees to pursue in good faith a declaratory judgment action in
a court of competent jurisdiction seeking a court order granting Master
Landlord's consent to the Sublease. The expenses incurred by Seller in obtaining
a declaratory judgment shall be reimbursed by The La Jolla Endoscopy ASC, L.P.
All amounts in the escrow account will be released to Seller on the earlier of
the date on which Master Landlord consents to the Sublease or the first
anniversary of the
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Asset Purchase Agreement/Page 10
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Closing; provided that Seller has satisfied the obligations contained in this
Section 8.8.
ARTICLE 9. COVENANTS AND AGREEMENTS OF AMSURG AND ASC
AmSurg and ASC further covenant and agree that from the date hereof
until the Closing, unless otherwise consented to by Seller in writing, they will
fulfill the following covenants and agreements:
9.1. CONFIDENTIALITY AND NON-CIRCUMVENTION.
Except as otherwise required by law, AmSurg will not disclose at any
time to any other person not an employee of AmSurg, ASC or Seller (or a person
otherwise involved in the carrying out of the transactions contemplated by this
Agreement), nor make any public announcement of, the transactions or terms of
the transactions contemplated by this Agreement.
9.2. NOTICE OF ADVERSE CHANGE. AmSurg and ASC each will notify Seller and
Doctors in writing of any material adverse change in the business, assets,
operations, conditions or prospects of AmSurg or ASC, as the case may be, from
the date of this Agreement to the Closing Date.
9.3. SCHEDULES. AmSurg shall have the continuing obligation to supplement or
amend promptly the Schedules being delivered by AmSurg pursuant to this
Agreement with respect to any matter hereafter arising or discovered which, if
existing or known at the date of this Agreement, would have been required to be
set forth or described in these Schedules.
ARTICLE 10. CONDITIONS TO AMSURG'S AND ASC'S OBLIGATIONS
AmSurg and ASC shall not be obligated to consummate the transactions
contemplated hereby, unless each of the following conditions is fulfilled or
performed (unless expressly waived in writing by AmSurg and ASC) prior to or at
the Closing:
10.1. COMPLIANCE. The representations and warranties made by Seller and
Doctors in this Agreement and the statements contained in the Schedules attached
hereto or in any instrument, list, certificate or writing delivered by Seller or
Doctors pursuant to this Agreement shall be true when made and at and as of the
time of the Closing as though such representations and warranties were made at
and as of the Closing.
10.2. PERFORMANCE BY SELLER AND DOCTORS. Seller and Doctors shall have
performed and complied with all covenants, agreements, obligations and
conditions required by this Agreement to be so complied with or performed by
each of them.
10.3. CERTIFICATE OF SELLER. Seller shall have delivered to AmSurg a
certificate, dated the Closing Date, certifying as to the fulfillment by Seller
of the conditions specified in Sections 10.1 and 10.2 hereof.
10.4. CERTIFICATE OF DOCTORS. Each of the Doctors shall have delivered to
AmSurg a certificate, dated the Closing Date, certifying as to the fulfillment
by such Doctor of the conditions specified in Sections 10.1 and 10.2 hereof.
10.5. CONSENTS AND LICENSES. All necessary consents, licenses, permits,
approvals, authorizations, orders and agreements from federal, state and local
governmental units and any other entity which are listed on Schedule 4.16,
including approval by the California Department of Health Services, Licensing
and Certification and by applicable Medicare and state Medicaid agencies, for
the continued operation and third-party reimbursement of the Center by the L.P.
following the consummation of the transactions contemplated hereby, shall have
been issued to the L.P. or notice of issuance shall have been provided.
10.6. OPINION OF COUNSEL. AmSurg shall have been furnished with the opinion
of Xxxxxx Xxxxxx Xxxxxxx XxXxxxxx Xxxxxx & Fognani, L.L.P., counsel to Seller
and Doctors, in substantially the form of Schedule 10.6.
10.7. SIGNIFICANT PAYOR AGREEMENTS. All of the Significant Payor agreements
shall have been validly assigned to the L.P. or Seller and AmSurg shall have no
reason to believe that any such agreement with a Significant Payor will not be
approved or that such Significant Payor will not execute a new agreement with
the L.P. on terms reasonably acceptable to AmSurg.
10.8. SHAREHOLDER APPROVAL. All of the shareholders of Seller shall have
approved the transactions contemplated by this Agreement, and Seller shall have
furnished AmSurg with a certificate of the Secretary of Seller evidencing such
approval.
10.9. FORM 8594. AmSurg initially will allocate the Initial Purchase Price
using the methodology reflected on Schedule 10.9. In the course of completing
ASC's consolidated federal income tax return, AmSurg shall provide Seller with
an IRS Form 8594.
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ARTICLE 11. CONDITIONS TO SELLER'S AND DOCTORS' OBLIGATIONS
Seller and Doctors shall not be obligated to consummate the
transactions contemplated hereby unless each of the following conditions is
fulfilled or performed (unless expressly waived in writing by Seller) prior to
or at the Closing:
11.1. COMPLIANCE. The representations and warranties made by AmSurg and ASC
in this Agreement and the statements contained in the Schedules attached hereto
or in any instrument, list, certificate or writing delivered by AmSurg and ASC
pursuant to this Agreement shall be true when made and at and as of the time of
the Closing as though such representations and warranties were made at and as of
the Closing.
11.2. PERFORMANCE BY AMSURG AND ASC. AmSurg and ASC shall have performed and
complied with all agreements, obligations and conditions required by this
Agreement to be so complied with or performed by AmSurg and ASC.
11.3. CERTIFICATE OF AMSURG AND ASC. AmSurg and ASC each shall have delivered
to Seller and Doctors a certificate, dated the Closing Date, certifying as to
the fulfillment of the conditions specified in Sections 11.1 and 11.2 hereof.
11.4. OPINION OF COUNSEL. Seller and Doctors shall have been furnished the
opinion of Bass, Xxxxx & Xxxx PLC, counsel to AmSurg and ASC, in substantially
the form of Exhibit 11.4.
ARTICLE 12. INDEMNIFICATION
12.1. INDEMNIFICATION BY SELLER AND DOCTORS. Seller and Doctors, jointly and
severally, hereby agree to defend, indemnify and hold harmless AmSurg and ASC
and shall reimburse AmSurg and ASC for, from and against each claim, loss,
liability, cost and expense (including without limitation, interest, penalties,
costs of preparation and investigation, and the reasonable fees, disbursements
and expenses of attorneys, accountants and other professional advisors)
(collectively, "Losses"), directly or indirectly relating to, resulting from or
arising out of:
(a) Any untrue representation, misrepresentation, breach of warranty or
nonfulfillment of any covenant, agreement or other obligation by or of Seller or
any Doctor contained herein, any Schedule hereto or in any certificate, document
or instrument delivered to AmSurg and ASC pursuant hereto.
(b) Any tax liability of Seller or the Center not previously paid,
which may at any time be asserted or assessed against Seller or the Center for
any event or period prior to the Closing Date (regardless of whether the
possibility of the assertion or assessment of any such tax liability shall have
been disclosed to AmSurg at or prior to the Closing).
(c) Liability for any amounts owed by Seller or the Center to any
governmental third party or private payors because of overpayments to Seller or
the Center prior to the Closing for services rendered to patients, which
liability is due to a recomputation of rates, field audit adjustments,
overpayments or otherwise.
(d) Any other Loss incidental to any of the foregoing.
(e) If any event should occur which would otherwise entitle a party to
assert a claim for indemnification hereunder, no loss, damage, or expense shall
have been sustained by such party to the extent of (i) any tax savings realized
by such party with respect thereto, or (ii) any proceeds received by such party
from any insurance policies with respect thereto.
12.2. INDEMNIFICATION BY AMSURG AND ASC. AmSurg and ASC, severally and
not jointly, hereby agree to defend, indemnify and hold harmless Seller and
Doctors, and shall reimburse Seller and Doctors for, from and against Losses
directly or indirectly relating to, resulting from or arising out of:
(a) Any untrue representation, misrepresentation, breach of
warranty or nonfulfillment of any covenant, agreement or other obligation by
AmSurg or ASC, as the case may be, contained herein or in any certificate,
document or instrument delivered to Seller and Doctors pursuant hereto.
(b) Any other Loss incidental to the foregoing.
12.3. PROCEDURE.
(a) The indemnified party shall promptly notify the indemnifying
party of any claim, demand, action or proceeding for which indemnification will
be sought under Sections 12.1 or 12.2 of this Agreement, and, if such claim,
demand, action or proceeding is a third party claim, demand, action or
proceeding, the indemnifying party will have the right at its expense to assume
the defense thereof using counsel reasonably acceptable to the indemnified
party. The indemnified party shall have the right to participate, at its
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Asset Purchase Agreement/Page 12
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own expense, with respect to any such third party claim, demand, action or
proceeding. In connection with any such third party claim, demand, action or
proceeding, AmSurg, ASC, Seller and Doctors shall cooperate with each other and
provide each other with access to relevant books and records in their
possession. No such third party claim, demand, action or proceeding shall be
settled without the prior written consent of the indemnified party. If a firm
written offer is made to settle any such third party claim, demand, action or
proceeding and the indemnifying party proposes to accept such settlement and the
indemnified party refuses to consent to such settlement, then: (i) the
indemnifying party shall be excused from, and the indemnified party shall be
solely responsible for, all further defense of such third party claim, demand,
action or proceeding; and (ii) the maximum liability of the indemnifying party
relating to such third party claim, demand, action or proceeding shall be the
amount of the proposed settlement if the amount thereafter recovered from the
indemnified party on such third party claim, demand, action or proceeding is
greater than the amount of the proposed settlement.
(b) Any claim of indemnity of AmSurg or ASC against Seller with respect
to Section 12.1 hereof may in AmSurg's discretion be discharged by setoff
against any amounts owed or owing to Seller or any affiliate thereof under the
Agreement of Limited Partnership between Seller and AmSurg.
(c) Notwithstanding the foregoing, no Doctor shall be required to
indemnify AmSurg or ASC for any amount in excess of his pro rata portion of the
Initial Purchase Price.
(d) Notwithstanding the foregoing, Seller and Doctors shall not be
obligated to make any indemnification under Section 12.1 unless the aggregate
amount of Losses exceeds $20,000 (the "Basket"), and such indemnification with
respect to such Losses shall be made by Seller and Doctors only to the extent of
such excess over the Basket.
ARTICLE 13. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
13.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained herein shall survive the Closing Date and any investigation
made by or on behalf of any party hereto, and shall survive for a period of
eighteen (18) months after the Closing Date (except for any Losses described in
Section 12.1(b), which shall survive for the applicable statute of limitations,
including any waivers thereof, Section 12.1(c), which shall not terminate, and
any breach of the representations and warranties contained in Sections 4.6 and
4.9 with respect to professional malpractice claims arising before the Closing
Date, which shall not terminate).
In addition, in the event that all of L.P., AmSurg, ASC, or their
successors or assigns, dissolves, liquidates or otherwise ceases to exist, the
provisions of Section 8.2 hereof shall terminate and be of no further force or
effect.
13.2. REMEDIES CUMULATIVE. The remedies provided herein shall be cumulative
and shall not preclude the assertion by any party hereto of any other rights or
the seeking of any other remedies against the other party hereto.
ARTICLE 14. TERMINATION OF AGREEMENT
This Agreement may be terminated at any time prior to the Closing:
(a) by mutual agreement of Seller and AmSurg;
(b) by AmSurg, if there has been a material violation or breach by
Seller or Doctors of any of the agreements, representations or warranties
contained in this Agreement which has not been waived in writing, or if any of
the conditions set forth in Article 10 hereof have not been satisfied by the
Closing or have not been waived in writing by AmSurg;
(c) by Seller, if there has been a material violation or breach by
AmSurg or ASC of any of the agreements, representations or warranties contained
in this Agreement which has not been waived in writing, or if any of the
conditions set forth in Article 11 hereof have not been satisfied by the Closing
or have not been waived in writing by Seller;
(d) by either AmSurg or Seller if the transactions contemplated by this
Agreement shall not have been consummated on or before December 31, 1999; or
(e) by either AmSurg or Seller if the other makes an assignment for the
benefit of creditors, files a voluntary petition in bankruptcy or seeks or
consents to any reorganization or similar relief under any present or future
bankruptcy act or similar law, or is adjudicated a bankrupt or insolvent, or if
a third party commences any bankruptcy, insolvency, reorganization or similar
proceeding involving the other.
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Asset Purchase Agreement/Page 13
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ARTICLE 15. MISCELLANEOUS
15.1. EXPENSES. All fees and expenses incurred by Seller and Doctors,
including without limitation, legal fees and expenses, in connection with this
Agreement will be borne by Seller and Doctors and all fees and expenses incurred
by AmSurg and ASC, including without limitation, legal fees and expenses, in
connection with this Agreement will be borne by AmSurg and ASC.
15.2. ASSIGNABILITY; PARTIES IN INTEREST.
(a) AmSurg may assign any or all of its rights hereunder to any
affiliate or any direct or indirect subsidiary of AmSurg, and AmSurg shall
advise Seller of any such assignment and shall designate such party as the
assignee and transferee of the Purchased Assets. Any such assignee shall assume
all of AmSurg's duties, obligations and undertakings hereunder; provided,
however, prior to the effectiveness of any such assignment, AmSurg shall have
executed a guaranty of the assignee's performance of its duties, obligations and
undertakings in form and substance reasonably acceptable to Seller and their
counsel.
(b) Seller and Doctors may not assign, transfer or otherwise dispose of
any of their respective rights hereunder without the prior written consent of
AmSurg; provided that with respect to Seller's transfer of its right to receive
payments of the Purchase Price Differential after the Closing Date to the
Doctors AmSurg shall not unreasonably withhold consent .
(c) All the terms and provisions of this Agreement shall be binding
upon, shall inure to the benefit of and shall be enforceable by the respective
heirs, successors, assigns and legal or personal representatives of the parties
hereto.
15.3. ENTIRE AGREEMENT; AMENDMENTS; WAIVER. This Agreement, including the
exhibits, Schedules, lists and other documents and writings referred to herein
or delivered pursuant hereto, which form a part hereof, contains the entire
understanding of the parties with respect to its subject matter. There are no
restrictions, agreements, promises, warranties, covenants or undertakings other
than those expressly set forth herein or therein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to its
subject matter. This Agreement may be amended only by a written instrument duly
executed by all parties or their respective heirs, successors, assigns or legal
personal representatives. Any condition to a party's obligations hereunder may
be waived but only by a written instrument signed by the party entitled to the
benefits thereof. The failure or delay of any party at any time or times to
require performance of any provision or to exercise its rights with respect to
any provision hereof, shall in no manner operate as a waiver of or affect such
party's right at a later time to enforce the same.
15.4. SEVERABILITY. The invalidity of any term or terms of this Agreement
shall not affect any other term of this Agreement, which shall remain in full
force and effect.
15.5. NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered or mailed (registered or certified mail, postage
prepaid, return receipt requested or by overnight courier service) as follows:
If to Seller:
LaJolla Gastroenterology, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxx, M.D.
With a copy to:
Xxxxxx X. Xxxxxx, Esq.
Xxxxxx Xxxxxx Xxxxxxx XxXxxxxx
Palner & Fognani, LLP
Suite 1750
Xxx Xxxxx, Xxxxxxxxxx 00000
If to AmSurg or ASC:
AmSurg La Jolla, Inc.
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
With a copy to:
Bass, Xxxxx & Xxxx PLC
First American Center
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
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Asset Purchase Agreement/Page 14
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or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
only be effective upon receipt.
15.6. SECTION AND OTHER HEADINGS. The section and other headings contained in
this Agreement are for reference purposes only and shall not in any way affect
the meaning or interpretation of this Agreement.
15.7. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, provided, however, that
the several executed counterparts shall together have been signed by AmSurg,
ASC, Seller and each of the Doctors. All of such executed counterparts shall
constitute one and the same instrument.
15.8. PARTIES IN INTEREST. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns. The parties acknowledge that they have
independently negotiated the provisions of this Agreement, that they have relied
upon their own counsel as to matters of law and application and that neither
party has relied on the other party with regard to such matters. The parties
expressly agree that there shall be no presumption created as a result of either
party having prepared in whole or in part any provisions of this Agreement.
15.9. APPLICABLE LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California, without regard
to its conflict of laws rules.
15.10. DISPUTE RESOLUTION. In the event that a dispute arises under the terms
of this Agreement, each party agrees that it will: (i) discuss and attempt to
negotiate a resolution of the matter within 30 days after the dispute arises;
(ii) submit the dispute to non-binding mediation with the assistance of a
qualified mediator selected by mutual agreement, with the mediator's fees and
costs split evenly between AmSurg and Seller; and (iii) upon failure to resolve
the issue according to the steps set forth in subsection (i) and (ii) submit the
dispute to final and binding arbitration in San Diego, California following the
procedures established by the American Arbitration Association.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
AMSURG LA JOLLA, INC.
By: /s/ Xxxxxx X. Xxxxx
----------------------
Title: Secretary
---------------------
By its execution of this Agreement, AmSurg Corp. hereby consents to the
execution hereof by AmSurg La Jolla, Inc. and guarantees AmSurg La Jolla, Inc.'s
financial obligations under this Agreement:
AMSURG CORP.
By: /s/ Xxxxxx X. Xxxxx
-------------------------
Title: Senior Vice President
------------------------
LA JOLLA GASTROENTEROLOGY MEDICAL GROUP, INC.
By: /s/ Xxxx X. Xxxxx, M.D.
-----------------------
Title: President
-----------------------
By their execution of this Agreement, Doctors hereby consent to the
execution hereof by Seller and agree to be bound solely by the provisions of
Sections 5.1, 5.2, 5.3, 5.4, 8.2, 8.3, 8.6 and 8.9 hereof:
DOCTORS:
/s/ H. Xxxxxx Xxxx, M.D.
--------------------------
H. Xxxxxx Xxxx, M.D.
/s/ Xxxx X. Xxxxx, M.D.
--------------------------
Xxxx X. Xxxxx, M.D.
/s/ Xxxxxx X. Xxxx, M.D.
--------------------------
Xxxxxx X. Xxxx, M.D.
/s/ Xxxxx X. Xxxxxxx, M.D.
--------------------------
Xxxxx X. Xxxxxxx, M.D.
--------------------------------------------------------------------------------
Asset Purchase Agreement/Page 15
16
The Schedules and Exhibits to the Asset Purchase Agreement have been
omitted in accordance with Item 601(b)(2) of Regulation S-K, but will be
furnished to the Commission supplementally upon request. The contents of the
omitted Schedules and Exhibits are described in the Asset Purchase Agreement.
