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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
October 8, 1999 (September 24, 1999)
AMSURG CORP.
(Exact Name of Registrant as Specified in its Charter)
TENNESSEE 000-22217 62-1493316
(State or other jurisdiction of (Commission (I.R.S. employer
incorporation or organization) File Number) identification no.)
20 BURTON HILLS BOULEVARD
NASHVILLE, TENNESSEE 37215
(Address of principal executive offices) (Zip code)
(615) 665-1283
(Registrant's Telephone Number, Including Area Code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Effective September 24, 1999, AmSurg Holdings, Inc. ("AmSurg"), a
subsidiary of AmSurg Corp. (the "Company"), acquired from Mid-Florida Surgery
Center, Inc., a Florida corporation (the "Seller"), a fifty-four percent
ownership interest in the assets comprising the business operations of an
ambulatory surgery center (the "Center") in Mount Dora, Florida.
Pursuant to the terms of the Asset Purchase Agreement dated September 24,
1999, by and among AmSurg, the Company and the Seller, AmSurg paid an initial
purchase price of $6,374,859 in cash and the Company issued to the Seller
117,338 shares of its Class A Common Stock, subject to adjustment as set forth
in the Asset Purchase Agreement. The cash used in the purchase transaction was
provided primarily from borrowings under the Company's revolving credit
agreement with SunTrust Bank, Nashville. The consideration paid to the Seller
was determined through arm's-length negotiations between AmSurg and the
shareholders of the Seller. Following the asset purchase, AmSurg and the Seller
contributed their respective ownership in the assets of the Center into a newly
formed limited liability company, The Mount Dora Ophthalmology ASC, LLC, and
received proportionate membership therein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
It is impractical to provide at this time the financial statements and
pro forma financial information required by Items 7(a) and 7(b). The Company
anticipates filing this information in an amendment to this Form 8-K on or prior
to December 8, 1999.
(c) Exhibits:
2 Asset Purchase Agreement dated September 24, 1999 by and among
AmSurg Holdings, Inc., AmSurg Corp. and Mid-Florida Surgery
Center, Inc.
2
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMSURG CORP.
By: /s/ Claire M. Gulmi
--------------------------------------
CLAIRE M. GULMI
Senior Vice President and Chief
Financial Officer (Principal
Financial and Duly Authorized Officer)
Date: October 8, 1999
3
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
2 Asset Purchase Agreement dated September 24, 1999 by and among
AmSurg Holdings, Inc., AmSurg Corp. and Mid-Florida Surgery
Center, Inc.
</TABLE>
4
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EXHIBIT 2
ASSET PURCHASE AGREEMENT
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THIS ASSET PURCHASE AGREEMENT (the "Agreement"), dated as of September
24, 1999, is by and among AmSurg Holdings, Inc., a Tennessee corporation
("AHI"), AmSurg Corp., a Tennessee corporation and the owner of all the
outstanding capital stock of AHI ("AmSurg"), Mid-Florida Surgery Center, Inc., a
Florida corporation ("Seller"), and the individuals set forth on the signature
pages attached hereto (individually "Doctor" and collectively "Doctors").
WHEREAS, AHI 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 AHI and AHI shall purchase, acquire and accept from Seller an
undivided 54% interest in the assets comprising the business operations of the
Mid Florida Surgery Center (the "Center") owned and operated by Seller and
located in Mount Dora, Florida, 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 items set forth on Schedule 1.1.
1.2. ASSUMPTION OF LIABILITIES. Except as described herein, AHI 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 AHI against and hold it harmless from any such
Liabilities. AHI will cause The Mount Dora Ophthalmology ASC, LLC, a Tennessee
limited liability company (the "LLC"), 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
2.1. INITIAL PURCHASE PRICE. The initial purchase price ("Initial Purchase
Price") for the Purchased Assets shall be $7,040,304 which shall be payable in
cash and shares of the Class A common stock (the "AmSurg Common Stock") of
AmSurg as provided on Exhibit 2(c). 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 Exhibit 2.
2.2. PURCHASE PRICE DIFFERENTIAL. AHI and Seller acknowledge that the rule
proposed in June 1998 by the Health Care Financing Administration ("HCFA") set
forth at 63 Fed. Reg. 32290 (proposed June 12, 1998), 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 fiscal year
1998 and the annualized procedure volume for Medicare cases performed in the
Center from October 1, 1998 through July 31, 1999. The Medicare procedure volume
and the potential percentage reduction in Medicare reimbursement rate changes
are set forth in Exhibit 2(a). Exhibit 2(b) sets forth what the Initial Purchase
Price would have been without any adjustment for the proposed Medicare
reimbursement rate changes (the "Potential Purchase Price"), and the difference
between the Initial Purchase Price and the Potential Purchase Price (the
"Purchase Price Differential").
Of the Purchase Price Differential on the Closing Date, AHI will pay,
in addition to the Initial Purchase Price, $38,585, payable in cash. During the
six (6) years following the Closing, commencing January 1, 2000, at the end of
each six (6) month period thereafter, if HCFA does not adopt a final, binding
form of the Proposed Rule during such period, then AHI will pay as additional
consideration ("Additional Purchase Price") an amount in cash equal to one
twelfth (1/12) of the Purchase Price Differential as set forth on Exhibit 2(b),
together with interest thereon at the rate equal to the prime rate as published
from time to time by SunTrust Bank in Nashville, Tennessee, accruing from the
Closing Date. In the event that HCFA adopts a final, binding form of the
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Proposed Rule during the six (6) years following the Closing, then the purchase
price will be recalculated and adjusted utilizing the formula set forth on
Exhibits 2(a) and 2(b) and substituting the final Medicare reimbursement rates
for the proposed Medicare reimbursement rates set forth therein (the "Adjusted
Purchase Price"). If the Adjusted Purchase Price exceeds the sum of (a) the
Initial Purchase Price and (b) any Additional Purchase Price previously paid by
AHI (including the payment made at Closing out of the Purchase Price
Differential), AHI will pay in cash such amount as additional consideration
within sixty (60) days after a final version of the Proposed Rule is adopted;
provided that if any changes to reimbursement rates do not take effect on the
same date, but are phased in over a period of time, the parties shall mutually
agree, based on the formula set forth on Exhibits 2(a) and 2(b), on the amount
and timing of payments to Seller taking into account the dates on which and the
degree to which the reimbursement changes are implemented. In no event will the
Purchase Price recalculation cause (x) Seller to return any portion of the
Purchase Price previously paid to Seller by AHI or (y) the aggregate
consideration paid by AHI to exceed the Potential Purchase Price.
2.3. PMATF TAXES. AmSurg and the Physician Entity acknowledge that the Physician
Entity paid certain funds into an escrow account prior to the Closing to cover
any PMATF taxes owed to the state of Florida. Additionally, the Physician Entity
has paid funds to the state of Florida Agency for Health Care Administration
("AHCA") for PMATF taxes. The Physician Entity shall be entitled to any refunds
from the escrow account or AHCA after the Closing.
In the event that during the three (3) year period following the
Closing the PMATF tax is repealed or reduced and not replaced with a similar
form of taxation or revenue generation ("PMATF Change"), the parties agree that
the Initial Purchase Price will be adjusted as follows:
The new tax rate will be applied to the Facility Revenue which is part
of the Initial Purchase Price calculation. This number will be
subtracted from $61,335 which is the current rate at which the PMATF
tax was calculated and this number will be multiplied by the product of
6.4 and .54. In the event that this calculation results in an amount
owing to Physician Entity, AmSurg shall pay such amount to Physician
Entity within sixty (60) days of the PMATF Change.
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, Berry & Sims PLC, First American
Center, Nashville, Tennessee 37238, or at such other place agreed upon by the
parties hereto, within ten (10) business days after the satisfaction of all
conditions to the parties' obligations to consummate the transactions
contemplated hereby, which shall in no event be later than September 30, 1999,
or at such other time as shall be agreed upon by all the parties hereto (the
"Closing Date"). The Closing shall be effective as of September 24, 1999 at
11:59 P.M.
3.2. OBLIGATIONS OF THE PARTIES AT THE CLOSING.
(a) At the Closing, AHI shall deliver to Seller:
(i) the consideration as specified in Article 2, which includes the
Initial Purchase Price;
(ii) a copy of resolutions of the Board of Directors of AHI, certified
by its Secretary, authorizing the execution, delivery and performance of
this Agreement and the other documents referred to herein to be executed by
AHI, and the consummation of the transactions contemplated hereby;
(iii) a certificate of AHI certifying as to the accuracy of the
representations and warranties of AHI at and as of the Closing and that AHI
has performed or complied with all of the covenants, agreements, terms,
provisions and conditions to be performed or complied with by AHI at or
before the Closing;
(iv) the opinion of Bass, Berry & Sims PLC, legal counsel for AHI, 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 AHI:
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Asset Purchase Agreement/Page 2
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(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 AHI, as shall be effective to vest in
AHI 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 AHI in
actual possession and operating control of the Purchased Assets;
(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) the opinion of Pullum & Pullum, P.A., legal counsel to Seller and
Doctors, in substantially the form of Schedule 10.6; and
(v) such other certificates and documents as AHI 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 Florida 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 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.
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Asset Purchase Agreement/Page 3
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4.4. FINANCIAL INFORMATION. Seller has delivered to AmSurg: (a) statements of
Center charges and cash receipts by month for the year ended September 30, 1998
and the nine (9) months ended June 30, 1999, (b) cash basis unaudited statements
of income for the Center for the year ended September 30, 1998 and the nine (9)
months ended June 30, 1999, (c) a cash basis unaudited balance sheet of the
Center at July 31, 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 necessary for the efficient operation
of the Center as a stand-alone entity. The Financial Information reflects the
consistent application of such accounting principles throughout the periods
involved.
4.5. OWNERSHIP OF PURCHASED ASSETS. Seller owns and possesses and has good and
marketable title to all of the Purchased Assets, free and clear of all
mortgages, pledges, liens, security interests, conditional sale agreements,
defects, charges, encumbrances and rights of third parties, and no conditions
exist which could give rise to any such mortgage, pledge, lien, security
interest, defect, charge, encumbrance on, or right of any such third party to,
the Purchased Assets.
Schedule 4.5 contains an accurate and complete description of the Purchased
Assets, which include, but are not limited to, supplies, inventory, uncollected
accounts receivable and equipment owned by Seller, and which are all of the
assets which are in any way necessary to the continued operation of the Center
as it is now being conducted. All of the Purchased Assets are in good working
condition and repair, normal wear and tear excepted, and are adequate for the
uses for which they are intended. Schedule 4.5 also sets forth the current book
value of all equipment included in the Purchased Assets.
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 July 31, 1999, 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 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 July
31, 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 immaterial write-offs made in the ordinary course of
business consistent with past practice;
(f) canceled any other debts or claims, or waived any rights, of
substantial value;
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Asset Purchase Agreement/Page 4
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(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 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 likelihood of any fine or suspension of any license, permit, certificate,
authorization or agreement.
4.11. CONTRACTS; SIGNIFICANT PAYORS. Schedule 4.11 is a complete and accurate
list of all individual payors, or group of affiliated payors, that accounted for
more than 5% of the Center's revenues in any two of the previous three years or
is expected to account for more than 5% of the Center's revenues in the current
year or the next year ("Significant Payors").
All contracts, agreements and instruments, including, but not limited
to, third party provider agreements and agreements with Significant Payors, to
which 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
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Asset Purchase Agreement/Page 5
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intends to withhold its consent to the assignment thereof, to the LLC 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 collectible in accordance with their respective terms; and none of
such receivables is subject to any counterclaim or set-off, other than normal
discounts, allowances and bad debts consistent with past practice.
4.13. REPORTS AND RETURNS. All reports and returns heretofore required by
federal, state or municipal authorities with respect to the operations of the
Center and all reports and returns to the various governmental authorities which
control, directly or indirectly, any of the Center's activities, have been filed
and all sums heretofore due with respect to such reports and returns have been
paid.
4.14. DEFAULTS. 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 (excluding 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 hereto been delivered to AHI. 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 AHI. Schedule 4.15(c) contains a
description of each such oral agreement.
4.16. 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 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 LLC 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.
4.17. 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").
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Asset Purchase Agreement/Page 6
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4.18. 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 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.
4.19. 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 AHI and AmSurg as it has desired. It has had the
opportunity to ask questions of and receive answers from AHI and AmSurg 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 AHI and AmSurg as Seller has requested (to
the extent that AHI or AmSurg possessed such information or could acquire it
without unreasonable effort or expense).
4.20. RESTRICTIONS ON TRANSFER OF THE AMSURG COMMON STOCK. Seller understands
that the AmSurg Common Stock has not been registered under the Securities Act or
any applicable state securities law, and may not be transferred or sold unless
it is subsequently registered under the Securities Act or an exemption from such
registration is available.
4.21. LEGEND ON CERTIFICATES. Seller is aware that the certificates representing
the AmSurg Common Stock shall bear the following legend and that appropriate
stop transfer instructions will be entered in the stock records of AmSurg:
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.
4.22. FULL DISCLOSURE. Neither this Agreement, nor any schedule, exhibit, list,
certificate or other instrument or document delivered to AHI 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 AHI 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.
4.23. NO BROKER'S FEES. Seller has not done anything to cause or incur any
liability or obligation for investment banking, brokerage, finder's, agent's or
other fees, commissions, expenses or charges in connection with the negotiation,
preparation, execution or performance of this Agreement or the consummation of
the transactions contemplated hereby, and Seller does not know of any claim by
anyone for such a fee, commission, expense or charge.
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 provision of the
charter or bylaws of Seller; (c) violate any order,
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<PAGE> 8
arbitration award, judgment, writ, injunction, decree, statute, rule or
regulation applicable to such Doctor; or (d) violate any other contractual or
legal obligation or restriction to which such Doctor is subject.
5.3. SHAREHOLDERS OF SELLER. Doctors constitute all of the shareholders of
Seller.
5.4. 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 LLC within twenty-five (25) miles of the Center until the
later of (a) one (1) year after Doctor ceases to be a 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 or owning stock in
Waterman Hospital ASC located in Eustis, Florida, provided such stock was owned
by the shareholder on the date of Closing. Doctors recognize and acknowledge
that the ascertainment of damages in the event of a breach of this Section 5.4
would be difficult, and agree that AHI, in addition to all other remedies it may
have, shall have the right to injunctive relief if there is such a breach.
Notwithstanding the foregoing, the parties acknowledge and agree that
Section 5.4 does not require Doctors to perform ophthalmic procedures at the
Center or to refer patients to the Center, and imposes no restrictions on where
such procedures are performed or where referrals are made.
5.5. NO BROKER'S FEES. Such Doctor has not done anything to cause or incur any
liability or obligation for investment banking, brokerage, finder's, agent's or
other fees, commissions, expenses or charges in connection with the negotiation,
preparation, execution or performance of this agreement or the consummation of
the transactions contemplated hereby, and Doctor does not know of any claim by
anyone for such a fee, commission, expense or charge.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF AHI
AHI represents and warrants as follows:
6.1. ORGANIZATION. AHI is a corporation duly organized, validly existing and in
good standing under the laws of the State of Tennessee. AHI 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. AHI 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
AHI 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 AHI enforceable against it in accordance with its terms.
6.3. NO VIOLATION. The execution and delivery of this Agreement by AHI 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 AHI is a party or by which any of AHI's
assets or properties are bound which violation or lien would have a material
adverse effect on the business or operations of AHI; (b) violate any provision
of the Charter or Bylaws of AHI; (c) violate any order, arbitration award,
judgment, writ, injunction, decree, statute, rule or regulation applicable to
AHI which violation would have a material adverse effect on the business or
operations of AHI; or (d) violate any other contractual or legal obligation or
restriction to which AHI is subject which violation would have a material
adverse effect on the business or operations of AHI.
6.4. TAXES. AHI 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. AHI has not signed any extension
agreement with any taxing authority
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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 AHI's knowledge, threatened against AHI 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 AHI.
6.6. COMPLIANCE WITH LAW AND OTHER REGULATIONS. AHI is in compliance in all
material respects with all requirements of applicable Laws. AHI 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 AHI. AHI knows of no
act or omission occurring on or before the date hereof which would subject AHI
to the likelihood of any material fine or suspension of any material license,
permit, certificate or authorization.
6.7. REPORTS AND RETURNS. AHI 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. AHI 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 AHI is a party, which default would have a material adverse effect on the
business or operations of AHI.
The execution, delivery and performance by AHI 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 AHI is a party or by which AHI is bound.
6.9. CORPORATE DOCUMENTS. AHI 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 AHI 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 AHI.
6.10. 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 AHI 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.
6.11. NO BROKER'S FEES. AHI 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 AHI does not know of any claim by
anyone for such a fee, commission, expense or charge.
ARTICLE 7. REPRESENTATIONS AND WARRANTIES OF AMSURG
AmSurg represents and warrants as follows:
7.1. 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.
7.2. 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.
The Agreement, when executed, will constitute a legal, valid and binding
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Asset Purchase Agreement/Page 9
<PAGE> 10
obligation of AmSurg enforceable against it in accordance with its terms.
7.3. CORPORATE DOCUMENTS. AmSurg 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 AmSurg
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 AmSurg.
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 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.
7.5. VALID ISSUANCE. All shares of AmSurg Common Stock issued to Seller on the
Closing Date will be validly issued, fully paid and nonassessable.
ARTICLE 8. COVENANTS AND AGREEMENTS OF SELLER AND DOCTORS
Seller and Doctors further covenant and agree that from the date hereof
until the Closing, and thereafter if so specified, they will fulfill the
following covenants and agreements unless otherwise consented to by AHI in
writing:
8.1. ACCESS; FURTHER ASSURANCES.
(a) Seller will accord to AHI, its counsel, accountants and other
representatives, from the date hereof and at any time after the Closing, full
access to all of the properties, books, contracts, commitments, financial
information and records of the Center, and will furnish AHI during such period
with all such information concerning the business and operations of the Center,
as AHI reasonably may request. At any time and from time to time after the
Closing, at AHI'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 the date hereof until the Closing, as soon as reasonably
practicable after the end of each quarter, but not later than the 15th day of
the next succeeding month, Seller will deliver to AHI an unaudited statement of
income for the Center for the quarter and the period then ended, and an
unaudited balance sheet and a detail of patient accounts receivable for the
Center as at the quarter then ended ("Ongoing Quarterly Financial Information").
In addition, as soon as reasonably practicable after the end of each month, but
not later than the 15th day of the next succeeding month, Seller will deliver to
AHI a statement of (i) the number of procedures performed, (ii) the billed
charges, and (iii) the cash collections, all with respect to the prior month
("Ongoing Monthly Financial Information") (the Ongoing Quarterly Financial
Information and the Ongoing Monthly Financial Information are collectively
referred to as the "Ongoing Financial Information").
(c) At any time and from time to time after the Closing, at AHI'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 AHI may reasonably deem necessary or
desirable in order more effectively to transfer, convey and assign to AHI and to
place AHI in possession and control of and to confirm AHI's title to, the
Purchased Assets, and to assist AHI in exercising all rights and enjoying all
benefits with respect thereto.
(d) At any time and from time to time after the Closing, at AHI'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 AHI may reasonably deem necessary or
desirable in order more effectively to transfer, convey and assign to AHI and to
place AHI in possession and control of and to confirm AHI's title to, the
Purchased Assets, and to assist AHI in exercising all rights and enjoying all
benefits with respect thereto.
8.2. CONFIDENTIALITY.
(a) In the event the transactions contemplated by this Agreement are not
consummated for any reason, Seller and Doctors promptly will return to AHI and
AmSurg all records and information provided to Seller from AHI and AmSurg, and
Seller and Doctors will treat all such records and information as confidential.
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Asset Purchase Agreement/Page 10
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(b) Except as otherwise required by law, Seller and Doctors will not
disclose at any time to any other person not an employee of AHI, AmSurg or
Seller (or a person otherwise involved in the carrying out of the transactions
contemplated by this Agreement), nor make any public announcement of, the
transactions or terms of the transactions contemplated by this Agreement.
8.3. CONDUCT OF BUSINESS PENDING THE CLOSING. From the date hereof until the
Closing, and except as otherwise consented to by AHI in writing, Seller shall
not:
(a) fail to maintain in effect adequate insurance coverage of the Purchased
Assets; or
(b) fail to use its best efforts to (i) maintain the Purchased Assets
in their present condition, (ii) comply with all applicable laws, rules and
regulations of governmental agencies or authorities, and (iii) operate its
business in the manner necessary to maintain the good will of its patients and
physicians and its reputation.
8.4. INSURANCE. Seller will use its best efforts to include AHI and the LLC as
additional insureds on Seller's professional liability, general property and
workers' compensation insurance policies, and will provide AHI with written
evidence of such coverage. AHI and AmSurg will pay the additional cost, if any,
for such insurance coverage.
8.5. TRANSFER OF SIGNIFICANT PAYOR AGREEMENTS. Seller and Doctors will take all
action necessary in order to effect the valid assignment to the LLC of all
agreements with Significant Payors effective as of the Closing Date or within a
reasonable time thereafter.
8.6. NOTICE OF ADVERSE CHANGE. Seller will advise AHI in writing of any material
adverse change in the Purchased Assets from the date of this Agreement to the
Closing Date.
8.7. SCHEDULES. Seller shall have the continuing obligation to supplement or
amend promptly the Schedules being delivered by Seller pursuant to this
Agreement with respect to any matter hereafter arising or discovered which, if
existing or known at the date of this Agreement, would have been required to be
set forth or described in these Schedules.
ARTICLE 9. COVENANTS AND AGREEMENTS OF AHI AND AMSURG
AHI and AmSurg further covenant and agree that from the date hereof until
the Closing, unless otherwise consented to by Seller in writing, they will
fulfill the following covenants and agreements:
9.1. CONFIDENTIALITY.
(a) In the event the transactions contemplated by this Agreement are
not consummated for any reason, AHI and AmSurg promptly will return to Seller
all records and information provided to AHI and AmSurg from Seller, and AHI and
AmSurg will treat all such records and information as confidential.
(b) Except as otherwise required by law, AHI will not disclose at any
time to any other person not an employee of AHI, AmSurg 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. AHI and AmSurg each will notify Seller and
Doctors in writing of any material adverse change in the business, assets,
operations, conditions or prospects of AHI or AmSurg, as the case may be, from
the date of this Agreement to the Closing Date.
9.3. SCHEDULES. AHI shall have the continuing obligation to supplement or amend
promptly the Schedules being delivered by AHI 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 AHI'S AND AMSURG'S OBLIGATIONS
AHI and AmSurg shall not be obligated to consummate the transactions
contemplated hereby, unless each of the following conditions is fulfilled or
performed (unless expressly waived in writing by AHI and AmSurg) prior to or at
the Closing:
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Asset Purchase Agreement/Page 11
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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 AHI 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 AHI 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 State of Florida Agency for Health Care Administration
and by applicable Medicare and state Medicaid agencies, for the continued
operation and third-party reimbursement of the Center by the LLC following the
consummation of the transactions contemplated hereby, shall have been issued to
the LLC or notice of issuance shall have been provided.
10.6. OPINION OF COUNSEL. AHI shall have been furnished with the opinion of
Pullum & Pullum, P.A., counsel to Seller and Doctors, in substantially the form
of Schedule 10.6.
10.7. LEASE. AHI shall have received fully executed copies of the Lease
Agreement by and between Mount Dora Properties Land Trust (the "Land Trust") and
LLC ("Lease").
10.8. OFFERING MEMORANDUM. Seller and Doctors shall have received an offering
memorandum relating to the AmSurg Common Stock and the LLC. Seller and Doctors
each shall have executed and delivered to AmSurg an offeree questionnaire in
form and substance reasonably satisfactory to AmSurg and its counsel.
10.9. SIGNIFICANT PAYOR AGREEMENTS. All of the Significant Payor agreements
shall have been validly assigned to the LLC or Seller and AHI 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 LLC on terms reasonably acceptable to AHI.
10.10. SHAREHOLDER APPROVAL. All of the shareholders of Seller shall have
approved the transactions contemplated by this Agreement, and Seller shall have
furnished AHI with a certificate of the President of Seller evidencing such
approval.
10.11. FORM 8594. AHI initially will allocate the Initial Purchase Price using
the methodology reflected on Exhibit 10.11. In the course of completing AmSurg's
consolidated federal income tax return, AHI shall provide Seller with an IRS
Form 8594.
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 AHI and AmSurg in
this Agreement and the statements contained in the Schedules attached hereto or
in any instrument, list, certificate or writing delivered by AHI and AmSurg
pursuant to this Agreement shall be true when made and at and as of the time of
the Closing as though such representations and warranties were made at and as of
the Closing.
11.2. PERFORMANCE BY AHI AND AMSURG. AHI and AmSurg shall have performed and
complied with all agreements, obligations and conditions required by this
Agreement to be so complied with or performed by AHI and AmSurg.
11.3. CERTIFICATE OF AHI AND AMSURG. AHI and AmSurg each shall have delivered to
Seller and Doctors a certificate, dated the Closing Date, certifying as to the
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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, Berry & Sims PLC, counsel to AHI and AmSurg, in substantially
the form of Exhibit 11.4.
11.5. LEASE. The LLC and Land Trust shall have entered into the Lease.
ARTICLE 12. INDEMNIFICATION
12.1. INDEMNIFICATION BY SELLER AND DOCTORS. Seller and Doctors, jointly and
severally, hereby agree to defend, indemnify and hold harmless AHI and AmSurg
and shall reimburse AHI and AmSurg for, from and against each claim, loss,
liability, cost and expense (including without limitation, interest, penalties,
costs of preparation and investigation, and the reasonable fees, disbursements
and expenses of attorneys, accountants and other professional advisors)
(collectively, "Losses"), directly or indirectly relating to, resulting from or
arising out of:
(a) Any untrue representation, misrepresentation, breach of warranty or
nonfulfillment of any covenant, agreement or other obligation by or of Seller or
any Doctor contained herein, any Schedule hereto or in any certificate, document
or instrument delivered to AHI and AmSurg 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 AHI 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.
12.2. INDEMNIFICATION BY AHI AND AMSURG. AHI and AmSurg, 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 AHI or AmSurg,
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 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, AHI, AmSurg, 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.
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(b) Any claim of indemnity for Losses of AHI or AmSurg against Seller
with respect to Section 12.1 hereof may be discharged by setoff against any
amounts owed or owing to Seller or any affiliate thereof under the Operating
Agreement between Seller and AHI; provided, that if Seller contests the amount
of such Losses owing to AmSurg or AHI, Seller and AHI or AmSurg agree to have
the parties' rights and obligations pursuant to this Section 12 determined in
binding arbitration pursuant to the rules of the American Arbitration
Association then pertaining. Arbitration proceedings shall be held in Mount
Dora, Florida.
(c) Notwithstanding the foregoing, no Doctor shall be required to
indemnify AHI or AmSurg 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 $50,000 (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
twenty-four (24) months after the Closing Date (except for any Losses described
in Section 12.1(b), which shall survive for the applicable statute of
limitations, including any waivers thereof, Section 12.1(c), which shall not
terminate, and any breach of the representations and warranties contained in
Sections 4.6 and 4.9 with respect to professional malpractice claims arising
before the Closing Date, which shall not terminate).
In addition, in the event that all of LLC, AHI, AmSurg, or their
successors or assigns, dissolves, liquidates or otherwise ceases to exist, the
provisions of Section 5.4 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 AHI;
(b) by AHI, 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 AHI;
(c) by Seller, if there has been a material violation or breach by AHI
or AmSurg of any of the agreements, representations or warranties contained in
this Agreement which has not been waived in writing, or if any of the conditions
set forth in Article 11 hereof have not been satisfied by the Closing or have
not been waived in writing by Seller;
(d) by either AHI or Seller if the transactions contemplated by this
Agreement shall not have been consummated on or before September 30, 1999; or
(e) by either AHI or Seller if the other makes an assignment for the
benefit of creditors, files a voluntary petition in bankruptcy or seeks or
consents to any reorganization or similar relief under any present or future
bankruptcy act or similar law, or is adjudicated a bankrupt or insolvent, or if
a third party commences any bankruptcy, insolvency, reorganization or similar
proceeding involving the other.
ARTICLE 15. MISCELLANEOUS
15.1. EXPENSES. All fees and expenses incurred by 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 AHI
and AmSurg, including without limitation, legal fees and expenses, in connection
with this Agreement will be borne by AHI and AmSurg.
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15.2. ASSIGNABILITY; PARTIES IN INTEREST.
(a) AHI may assign any or all of its rights hereunder to any affiliate
or any direct or indirect subsidiary of AHI, and AHI 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 AHI's duties,
obligations and undertakings hereunder.
(b) Seller and Doctors may not assign, transfer or otherwise dispose of
any of their respective rights hereunder without the prior written consent of
AHI.
(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:
Mid-Florida Surgery Center, Inc.
17560 West Highway 441
Mount Dora, FL 32757
Attn: Jeffrey D. Baumann, M.D.
With a copy to:
Pullum & Pullum, P.A.
Suite 701 First Family Oaks
1330 W. Citizens Blvd.
Leesburg, Florida 34748
Attn: J. Stephen Pullum
If to AHI or AmSurg:
AmSurg Holdings, Inc.
20 Burton Hills Boulevard
Nashville, TN 37215
Attn: Claire M. Gulmi
With a copy to:
Bass, Berry & Sims PLC
First American Center
Nashville, TN 37238
Attn: Cynthia Y. Reisz, Esq.
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
only be effective upon receipt.
15.6. SECTION AND OTHER HEADINGS. The section and other headings contained in
this Agreement are for reference purposes only and shall not in any way affect
the meaning or interpretation of this Agreement.
15.7. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, provided, however, that
the several executed counterparts shall together have been signed by AHI,
AmSurg, 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,
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successors and assigns. The parties acknowledge that they have independently
negotiated the provisions of this Agreement, that they have relied upon their
own counsel as to matters of law and application and that neither party has
relied on the other party with regard to such matters. The parties expressly
agree that there shall be no presumption created as a result of either party
having prepared in whole or in part any provisions of this Agreement.
15.9. APPLICABLE LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Tennessee, without regard
to its conflict of laws rules.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first above written.
AMSURG CORP.
By: /s/ David L. Manning
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Title: Sr. Vice President
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AMSURG HOLDINGS, INC.
By: /s/ Claire M. Gulmi
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Title: Treasurer
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MID-FLORIDA SURGERY CENTER, INC.
By: /s/ Gregory J. Panzo, M.D.
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Title: President
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By their execution of this Agreement, Doctors hereby consent to the
execution hereof by Seller and agree to be bound by the provisions of Section
5.4 hereof:
DOCTORS:
/s/ Jeffrey D. Baumann, M.D.
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Jeffrey D. Baumann, M.D.
/s/ Stacy John Berckes, M.D.
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Stacy John Berckes, M.D.
/s/ Stacia H. Goldey, M.D.
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Stacia H. Goldey, M.D.
/s/ Gregory J. Panzo, M.D.
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Gregory J. Panzo, M.D.
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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.
