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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): January 14, 2000
(December 31, 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 December 31, 1999, AmSurg Burbank, Inc. ("AmSurg"),
a subsidiary of AmSurg Corp. (the "Company"), acquired from Pacific Eye Surgery
Center, LLC, a California limited liability company (the "Seller"), a fifty-one
percent ownership interest in the assets comprising the business operations of
an ambulatory surgery center (the "Center") in Burbank, California.
Pursuant to the terms of the Asset Purchase Agreement dated December 31,
1999, by and among AmSurg, the Company and the Seller, AmSurg paid an initial
purchase price of $2,013,024 in cash and the Company issued 13,245 shares of
Class A Common Stock valued at $75,000, 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 interests in the assets of the Center
into a newly formed limited partnership, The Burbank Ophthalmology ASC, L.P.,
and received proportionate ownership therein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The business acquired did not meet the significant subsidiary tests
requiring financial reporting under Regulation S-X.
(c) Exhibits:
2 Asset Purchase Agreement dated December 31, 1999 by and among AmSurg
Burbank, Inc., AmSurg Corp. and Pacific Eye Surgery Center, LLC.
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: January 14, 2000
3
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
2 Asset Purchase Agreement dated December 31, 1999 by and among AmSurg
Burbank, Inc., AmSurg Corp. and Pacific Eye Surgery Center, LLC.
</TABLE>
4
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Exhibit 2
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement"), dated December 31,
1999, is by and among AmSurg Burbank, Inc., a Tennessee corporation ("AmSurg"),
AmSurg Corp., a Tennessee corporation and the owner of all the outstanding
capital stock of AmSurg ("ASC"), Pacific Eye Surgery Center, LLC, a California
limited liability company ("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
ophthalmic surgery center (the "Center") owned and operated by Seller and
located in Burbank, 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.
Immediately following the Closing, (i) AmSurg shall contribute the
Purchased Assets to The Burbank Ophthalmology ASC, L.P., a newly formed
Tennessee limited partnership(the "L.P."), in exchange for an interest
representing a 51% membership interest in the L.P., and (ii) Seller shall
contribute the remaining undivided 49% interest in the assets comprising the
business of the Center, but specifically excluding cash, to the L.P. in
exchange for an interest representing a 49% membership interest in the L.P.
1.2. MANAGEMENT SERVICE AGREEMENT. Immediately following the Closing,
Seller and the L.P. shall enter a Management Services Agreement (the "Service
Agreement") in substantially the form attached hereto as Exhibit 1.2.
1.3. 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 and the Doctors will indemnify AmSurg and the L.P.
against and hold them harmless from any such Liabilities. AmSurg will cause 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.
ARTICLE 2. PURCHASE PRICE
The initial purchase price ("Initial Purchase Price") for the Purchased
Assets shall be (a) $2,013,024 cash and (b) a number of shares of the Class A
common stock (the "AmSurg Common Stock") of ASC which is equal to (i) Seventy
Five Thousand (75,000) divided by (ii) ninety percent (90%) the average closing
bid price of AmSurg Common Stock during the three trading days immediately
preceding January 3, 2000. 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.
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. 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").
During the six (6) years following the Closing, commencing January 1,
2000, at the end of each six (6) month period thereafter, if a final version of
the Proposed
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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 , 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 Corleto, Ackerman & Hearn
in Mencino, California, 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 January 31, 2000, or
at such other time as shall be agreed upon by all the parties hereto (the
"Closing Date").
3.2. OBLIGATIONS OF THE PARTIES AT THE CLOSING.
(a) At the Closing, AmSurg shall deliver to Seller:
(i) 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;
(ii) 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;
(iii) the opinion of Bass, Berry & Sims PLC, legal counsel
for AmSurg, the terms of which are substantially as set forth in
Schedule 11.4; and
(iv) 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 members of Seller,
certified by its Managing Members, 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 limited liability company)
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;
(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 Corleto, Ackerman & Hearn, legal
counsel to Seller and Doctors, in substantially the form of Schedule
10.6; and
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(vi) such other certificates and documents as AmSurg or
its counsel may reasonably request.
3.3. PAYMENT OF INITIAL PURCHASE PRICE. The consideration specified in
Article 2 hereof which comprises the Initial Purchase Price shall be paid by
AmSurg to Seller on January 3, 2000.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES BY SELLER
Seller represents and warrants as follows:
4.1. ORGANIZATION. Seller is a limited liability company 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 power and authority to enter into this
Agreement and perform its obligations hereunder and carry out the transactions
contemplated hereby. The execution, delivery and performance by 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 limited
liability company and member 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 Articles of Organization or Operating
Agreement 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 8 months ended August 31, 1999, (b) cash basis unaudited
statements of income for the Center for the year ended December 31, 1998 and
the 8 months ended August 31, 1999, (c) a cash basis unaudited balance sheet of
the Center at August 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.
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4.7. ABSENCE OF CERTAIN CHANGES. Since August 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 August 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;
(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 membership interests other than
distributions made in the ordinary course of business consistent with past
practice, or directly or indirectly redeemed, purchased or otherwise acquired
any of its membership interests;
(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. Seller has not received notice of any and to Seller's
knowledge, there are no claims, litigations, investigations or proceedings
pending or 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
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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 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 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 (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 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
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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
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 from AmSurg and ASC and
their representatives concerning the terms and conditions of the acquisition of
the AmSurg Common Stock and to obtain such additional information about the
business and financial condition of AmSurg and ASC as Seller has 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 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.
4.22. LEGEND ON CERTIFICATES. Seller is aware that the certificates
representing the AmSurg Common Stock shall bear the following legend and that
appropriate stop transfer instructions will be entered in the stock records of
ASC:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT") OR
ANY APPLICABLE STATE SECURITIES LAW. THE SHARES HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO OR FOR RESALE IN CONNECTION WITH THE
DISTRIBUTION THEREOF. NO DISPOSITION OF THE SHARES MAY BE MADE IN THE
ABSENCE OF (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR (ii) AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY
THAT SUCH DISPOSITION WITHOUT REGISTRATION IS IN COMPLIANCE WITH THE
SECURITIES ACT.
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, 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
Articles of Organization or Operating
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Agreement of Seller; (c) violate any order, arbitration award, judgment, writ,
injunction, decree, statute, rule or regulation applicable to such Doctor; or
(d) violate any other contractual or legal obligation or restriction to which
such Doctor is subject.
5.3. MEMBERS OF SELLER. Doctors constitute all of the members 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 L.P. within 7.5 miles of the Center until the later of (a)
one (1) year after Doctor ceases to be a member 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 5.4 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 5.4 does not require Doctors to perform surgical 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 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.
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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 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. 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.
6.11. NO BROKER'S FEES. AmSurg has not done anything to cause or incur any
liability or obligation for investment banking, brokerage, finder's, agent's or
other fees, commissions, expenses or charges in connection with the
negotiation, preparation, execution or performance of this Agreement or the
consummation of the transactions contemplated hereby, and AmSurg does not know
of any claim by anyone for such a fee, commission, expense or charge.
ARTICLE 7. REPRESENTATIONS AND WARRANTIES OF ASC
ASC represents and warrants as follows:
7.1. ORGANIZATION. ASC is a corporation duly organized, validly existing
and in good standing under the laws of the State of Tennessee. ASC has full
corporate power and corporate authority to carry on its business as now
conducted and to own, lease or operate its properties and assets as now owned,
leased or operated.
7.2. AUTHORIZATION. ASC has full corporate power and corporate authority to
enter into this Agreement and perform its obligations hereunder and carry out
the transactions contemplated hereby. The execution, delivery and performance
by ASC of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized and approved by all necessary corporate
action. The Agreement, when executed, will constitute a legal, valid and
binding obligation of ASC enforceable against it in accordance with its terms.
7.3. CORPORATE DOCUMENTS. ASC has made available to Seller 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. 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 AmSurg in
writing:
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8.1. ACCESS; FURTHER ASSURANCES.
(a) Seller will accord to AmSurg, its counsel, accountants and
other representatives, from the date hereof and at any time after the Closing,
full access to all of the properties, books, contracts, commitments, financial
information and records of the Center, and will furnish AmSurg during such
period with all such information concerning the business and operations of the
Center, as AmSurg reasonably may request. At any time and from time to time
after the Closing, at AmSurg's request and without further consideration,
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 AmSurg an unaudited statement
of income for the Center for the quarter and the period then ended, and an
unaudited balance sheet and a detail of patient accounts receivable for the
Center as at the quarter then ended ("Ongoing Quarterly Financial
Information"). In addition, as soon as reasonably practicable after the end of
each month, but not later than the 15th day of the next succeeding month,
Seller will deliver to AmSurg a statement of (i) the number of procedures
performed, (ii) the billed charges, and (iii) the cash collections, all with
respect to the prior month ("Ongoing Monthly Financial Information") (the
Ongoing Quarterly Financial Information and the Ongoing Monthly Financial
Information are collectively referred to as the "Ongoing Financial
Information"). All such Ongoing Financial Information shall be prepared in
accordance with generally accepted accounting principles consistent with prior
practice.
(c) At any time and from time to time after the Closing, at
AmSurg's request and without further consideration, Seller will execute and
deliver such other instruments of sale, transfer, conveyance, assignment and
delivery and confirmation and take such action as AmSurg may reasonably deem
necessary in order more effectively to transfer, convey and assign to AmSurg
and to place AmSurg in possession and control of and to confirm AmSurg's title
to, the Purchased Assets, and to assist AmSurg in exercising all rights and
enjoying all benefits with respect thereto.
(d) At any time and from time to time after the Closing, at
AmSurg's request and without further consideration, 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. CONFIDENTIALITY.
(a) In the event the transactions contemplated by this Agreement
are not consummated for any reason, Seller and Doctors promptly will return to
AmSurg and ASC all records and information provided to Seller from AmSurg and
ASC, and Seller and Doctors will treat all such records and information as
confidential.
(b) 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.
8.3. CONDUCT OF BUSINESS PENDING THE CLOSING. From the date hereof until
the Closing, and except as otherwise consented to by AmSurg 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 AmSurg and the
L.P. as additional insureds on Seller's professional liability, general
property and workers' compensation insurance 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.
8.5. 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.
8.6. NOTICE OF ADVERSE CHANGE. Seller will advise AmSurg in writing of any
material adverse change in the Purchased Assets from the date of this Agreement
to the Closing Date.
8.7. SCHEDULES. Seller shall have the continuing obligation through the
Closing Date 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
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at the date of this Agreement, would have been required to be set forth or
described in these Schedules.
ARTICLE 9. COVENANTS AND AGREEMENTS OF AMSURG AND ASC
AmSurg and ASC further covenant and agree that from the date hereof
until the Closing, unless otherwise consented to by Seller in writing, they
will fulfill the following covenants and agreements:
9.1. CONFIDENTIALITY.
(a) In the event the transactions contemplated by this Agreement
are not consummated for any reason, AmSurg and ASC promptly will return to
Seller all records and information provided to AmSurg and ASC from Seller, and
AmSurg and ASC will treat all such records and information as confidential.
(b) Except as otherwise required by law, AmSurg will not disclose
at any time to any other person not an employee of AmSurg, ASC or Seller (or a
person otherwise involved in the carrying out of the transactions contemplated
by this Agreement), nor make any public announcement of, the transactions or
terms of the transactions contemplated by this Agreement.
9.2. NOTICE OF ADVERSE CHANGE. AmSurg and ASC each will notify Seller 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 through the
Closing Date 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 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 Corleto, Ackerman & Hearn, counsel to Seller and Doctors, in substantially
the form of Schedule 10.6.
10.7. LEASE. The L.P. and Seller shall have entered into an Assignment and
Assumption Agreement pursuant to which the current lease with C&P Properties #1
is assigned to and assumed by the L.P., and the L.P. and C&P Properties #1
shall have entered into an amendment to such lease, acceptable to AmSurg.
10.8. OFFERING MEMORANDUM. Seller and Doctors shall have received an
offering memorandum relating to the AmSurg Common Stock and the L.P.. Seller
and Doctors each shall have executed and delivered to ASC an offeree
questionnaire in form and substance reasonably satisfactory to ASC and its
counsel.
10.9. SIGNIFICANT PAYOR AGREEMENTS. All of the Significant Payor agreements
shall have been validly assigned to the 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.
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10.10. MEMBER APPROVAL.. All of the members of Seller shall have approved the
transactions contemplated by this Agreement, and Seller shall have furnished
AmSurg with a certificate of the [President] of Seller evidencing such
approval.
10.11. FORM 8594. AmSurg initially will allocate the Initial Purchase Price
using the methodology reflected on Schedule 10.12. In the course of completing
ASC's consolidated federal income tax return, AmSurg shall provide Seller with
an IRS Form 8594.
ARTICLE 11. CONDITIONS TO 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, Berry & Sims PLC, counsel to AmSurg and ASC, in substantially
the form of Exhibit 11.4.
11.5. LEASE. The L.P. and Seller shall have entered into an Assignment and
Assumption Agreement pursuant to which the current lease with C&P Properties #1
is assigned to and assumed by the L.P., and the L.P. and C&P Properties #1
shall have entered into an amendment to such lease, acceptable to Seller.
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; provided, however, that a misrepresentation or breach with respect to
the representations and warranties contained in Section 4.17 hereof shall only
be considered a Loss to the extent it results in costs, damages, liabilities or
expenses in excess of Ten Thousand Dollars ($10,000.00).
(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.
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
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party. The indemnified party shall have the right to participate, at its own
expense, with respect to any such third party claim, demand, action or
proceeding. In connection with any such third party claim, demand, action or
proceeding, AmSurg, ASC, 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 Operating Agreement 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 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 L.P., AmSurg, ASC, 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 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 January 31, 2000;
or
(e) by either AmSurg or Seller if the other makes an assignment
for the benefit of creditors, files a voluntary petition in bankruptcy or seeks
or consents to any reorganization or similar relief under any present or future
bankruptcy act or similar law, or is adjudicated a bankrupt or insolvent, or if
a third party commences any bankruptcy, insolvency, reorganization or similar
proceeding involving the other.
ARTICLE 15. MISCELLANEOUS
15.1. EXPENSES. All fees and expenses incurred by 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.
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15.2. ASSIGNABILITY; PARTIES IN INTEREST.
(a) AmSurg may assign any or all of its rights hereunder to any
entity under the direct or indirect control of ASC, and AmSurg shall advise
Seller of any such assignment and shall designate such party as the assignee
and transferee of the Purchased Assets. Any such assignee shall assume all of
AmSurg's duties, obligations and undertakings hereunder.
(b) Seller and Doctors may not assign, transfer or otherwise
dispose of any of their respective rights hereunder without the prior written
consent of AmSurg.
(c) All the terms and provisions of this Agreement shall be
binding upon, shall inure to the benefit of and shall be enforceable by the
respective heirs, successors, assigns and legal or personal representatives of
the parties hereto.
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:
Pacific Eye Surgery Center
2829 West Burbank Blvd.
Burbank, CA 91505-2300
Attn: Mr. George Rooth
With a copy to:
Corleto, Ackerman & Hearn
15670 Ventura Blvd., Suite 801
Mencino, CA 91436
Attn: James D. Hearn, Esq.
If to AmSurg or ASC:
AmSurg Burbank, 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
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.
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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.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above written.
AMSURG CORP.
By: /s/ Claire M. Gulmi
----------------------------------------
Title: Sr. Vice President
--------------------------------------
AMSURG BURBANK, INC.
By: /s/ Claire M. Gulmi
----------------------------------------
Title: Secretary
--------------------------------------
PACIFIC SURGERY CENTER, LLC
By: /s/ Donald Goldstein, M.D.
----------------------------------------
Title: Medical Director
--------------------------------------
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/ Alan Berg, M.D.
- ----------------------------------------
Alan Berg, M.D.
/s/ Robert Feinfield, M.D.
- ----------------------------------------
Robert Feinfield, M.D.
/s/ Donald Goldstein, M.D.
- ----------------------------------------
Donald Goldstein, M.D.
/s/ Alan Mandelberg, M.D.
- ----------------------------------------
Alan Mandelberg, M.D.
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<PAGE> 15
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.
