<PAGE>
U.S. 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): September 1, 1999
AMEDISYS, INC.
--------------
(Exact Name of Registrant as Specified in Charter)
Delaware
--------
(State or Other Jurisdiction of
Incorporation or Organization)
0-24260 11-3131700
------- ----------
(Commission File Number) (I.R.S. Employer Identification No.)
3029 S. Sherwood Forest Blvd., Ste. 300 Baton Rouge, LA 70816
---------------------------------------------------------------
(Address of principal executive offices including zip code)
(225) 292-2031
--------------
(Registrant's telephone number, including area code)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT
Inapplicable
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Effective September 1, 1999, Amedisys, Inc. (the "Company") by an Asset
Purchase Agreement, sold certain assets, subject to the assumption of certain
liabilities, of its wholly-owned subsidiary, Amedisys Surgery Centers, L.C.
("ASC"), to United Surgical Partners International, Inc. ("USP"). The assets and
liabilities sold related to two free-standing outpatient surgery centers
operated by ASC, Amedisys Surgery Center of Pasadena and Amedisys Surgery Center
of South Houston (the "Surgery Centers"). The assets of the Surgery Centers will
be acquired by two Texas Limited Partnerships organized by USP and its wholly-
owned subsidiaries. The Company and its affiliates had no material relationship
with USP prior to this transaction. In consideration for the assets of the
Surgery Centers, ASC received $11,000,000, calculated using a multiple of
earnings before interest, taxes, depreciation, and amortization (EBITDA). At
closing, $10,562,000 was payable immediately to ASC with a three-month $300,000
note receivable due to ASC payable in monthly installments of $100,000 plus
interest at an effective interest rate of 10%. In addition to cash
considerations, USP agreed to pay off certain creditors of ASC for debts related
to the Surgery Centers of $1,101,083. Subject to certain exceptions, the assets
sold consisted primarily of $60,000 cash; all accounts and notes receivable;
inventory; prepaid items; land; equipment, surgical instruments, furniture,
fixtures, and leasehold improvements; office supplies; records and files;
transferable governmental licenses, permits, and authorizations; trade names,
goodwill, computer software, and operating rights; and rights in, to and under
specified licenses, contracts, leases, and agreements. The liabilities being
assumed by USP include, subject to certain exclusions, the current liabilities
of ASC and the obligations and liabilities under certain leases and contracts
arising on or after September 1, 1999.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Inapplicable
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Inapplicable
ITEM 5. OTHER EVENTS
Inapplicable
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS
Inapplicable
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired.
Inapplicable.
(b) Pro Forma Financial Information.
The pro forma financial information of the Company required
pursuant to Article 11 of Regulation S-X is attached thereto as
Annex A.
(c) Exhibit
No. Page
------- ----
2.1 (i) Asset Purchase Agreement among Amedisys, Inc.,
Amedisys Surgery Centers, L.C. and United Surgical
Partners International, Inc....................... A-1
2.2 (i) Promissory Note................................... A-2
(i) Filed herewith.
2
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ITEM 8. CHANGE IN FISCAL YEAR
Inapplicable
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S
Inapplicable
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 hereunto duly authorized.
AMEDISYS, INC.
/s/ LARRY R. GRAHAM
By:______________________________________
Larry R. Graham
Chief Operating Officer
DATE: September 15, 1999
3
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ANNEX A
AMEDISYS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1999
(In 000's, except per share amounts)
<TABLE>
<CAPTION>
Historical Effect of sale(1) Pro Forma
--------------- --------------- ----------------
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash $ 60 $ 10,081 $ 10,141
Accounts Receivable, Net of Allowance for Doubtful Accounts 20,989 (683) 20,306
Prepaid Expenses 778 (2) 776
Inventory 1,442 (200) 1,242
Other Current Assets 480 300 780
--------------- --------------- ----------------
Total Current Assets 23,749 9,497 33,246
Property, Plant and Equipment, Net 7,497 (1,408) 6,089
Other Assets, Net 25,165 (13) 25,152
--------------- --------------- ----------------
Total Assets $ 56,411 $ 8,077 $ 64,488
=============== =============== ================
LIABILITIES
Current Liabilities:
Notes Payable $ 34,862 $ (421) $ 34,441
Current Portion of Long-Term Debt 3,141 0 3,141
Deferred Revenue 2,119 0 2,119
Accounts Payable 8,088 (311) 7,777
Accrued Expenses:
Payroll and Payroll Taxes 4,118 (65) 4,053
Insurance 0 0 0
Other 6,104 (156) 5,948
--------------- --------------- ----------------
Total Current Liabilities 58,432 (954) 57,478
Long-Term Debt 5,477 (1,109) 4,368
Deferred Revenue 7,062 0 7,062
Other Long-Term Liabilities 825 0 825
--------------- --------------- ----------------
Total Liabilities 71,796 (2,063) 69,733
--------------- --------------- ----------------
Minority Interest 107 0 107
--------------- --------------- ----------------
STOCKHOLDERS' EQUITY
Common Stock 3 0 3
Preferred Stock 1 0 1
Additional paid-in capital 12,152 0 12,152
Treasury Stock (25) 0 (25)
Stock Subscriptions Receivable 0 0 0
Retained Earnings (deficit) (27,623) 10,140 (17,483)
--------------- --------------- ----------------
Total Stockholders' Equity (15,492) 10,140 (5,352)
--------------- --------------- ----------------
Total Liabilities and Stockholders' Equity $ 56,411 $ 8,077 $ 64,488
=============== =============== ================
</TABLE>
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AMEDISYS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(In 000's, except per share amounts)
<TABLE>
<CAPTION>
Historical Effect of sale(2) Pro Forma
-------------- --------------- ----------------
<S> <C> <C> <C>
Income:
Service Revenue $ 57,762 $ (2,686) $ 55,076
Cost of Service Revenue 27,392 (771) 26,621
-------------- --------------- ----------------
Gross Margin 30,370 (1,915) 28,455
-------------- --------------- ----------------
General and Administrative Expenses:
Salaries and benefits 17,674 (301) 17,373
Other 15,682 (457) 15,225
-------------- --------------- ----------------
Total General and Administrative Expenses 33,356 (758) 32,598
-------------- --------------- ----------------
Operating Income (loss) (2,986) (1,157) (4,143)
-------------- --------------- ----------------
Other Income and Expense:
Interest income 38 3 41
Interest expense (1,147) 47 (1,100)
Miscellaneous 146 (1) 145
-------------- --------------- ----------------
Total Other Income and Expense (963) 49 (914)
-------------- --------------- ----------------
Income (loss) before income taxes, minority interest, and
cumulative effect of change in accounting principle (3,949) (1,107) (5,056)
Provision (benefit) for Estimated Income Taxes 0 0 0
-------------- --------------- ----------------
Income (loss) before Minority Interest (3,949) (1,107) (5,056)
Minority Interest in Consolidated Subsidiary (4) 0 (4)
-------------- --------------- ----------------
Net Income (loss) $ (3,953) $ (1,107) $ (5,060)
============== =============== ================
Weighted Average Common Shares Outstanding 3,075 N/A 3,075
Basic Income (loss) per Common Share $ (1.29) $ (0.36) $ (1.65)
</TABLE>
<PAGE>
AMEDISYS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
(In 000's, except per share amounts)
<TABLE>
<CAPTION>
Historical Effect of sale (3) Pro Forma
---------- --------------- ---------
<S> <C> <C> <C>
Income:
Service Revenue $ 38,086 $ (4,299) $ 33,787
Cost of Service Revenue 22,923 (1,470) 21,453
---------- ------------- ---------
Gross Margin 15,163 (2,829) 12,334
---------- ------------- ---------
General and Administrative Expenses:
Salaries and benefits 18,522 (533) 17,989
Other 25,919 (837) 25,082
---------- ------------- ---------
Total General and Administrative Expenses 44,441 (1,370) 43,071
---------- ------------- ---------
Operating Income (loss) (29,278) (1,459) (30,737)
---------- ------------- ---------
Other Income and Expense:
Interest income 46 0 46
Interest expense (1,155) 157 (998)
Miscellaneous (181) 0 (181)
---------- ------------- ---------
Total Other Income and Expense (1,290) 157 (1,133)
---------- ------------- ---------
Income (loss) before income taxes, minority interest, and
cumulative effect of change in accounting principle (30,568) (1,302) (31,870)
Provision (benefit) for Estimated Income Taxes (1,374) (443) (1,817)
---------- ------------- ---------
Income (loss) before Minority Interest (29,194) (860) (30,054)
Minority Interest in Consolidated Subsidiary 9 0 9
---------- ------------- ---------
Net Income (loss) before discontinued operations (29,185) (860) (30,045)
Discontinued Operations
Income from Discontinued Operations 1,137 0 1,137
Gain on disposition, net of income tax 3,177 0 3,177
---------- ------------- ---------
Net Income (loss) $ (24,871) $ (860) $ (25,731)
========== ============= =========
Weighted Average Common Shares Outstanding 3,061 N/A 3,061
Basic Income (loss) per Common Share $ (9.53) $ (0.28) $ (9.81)
</TABLE>
<PAGE>
AMEDISYS, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
A. Basis of Presentation
Effective September 1, 1999, Amedisys, Inc. (the "Company"), by an
Asset Purchase Agreement, sold certain assets, subject to the assumption of
certain liabilities, of its wholly-owned subsidiary, Amedisys Surgery Centers,
L.C. ("ASC"), to United Surgical Partners International, Inc. ("USP"). The
assets and liabilities sold related to two free-standing outpatient surgery
centers operated by ASC, Amedisys Surgery Center of Pasadena and Amedisys
Surgery Center of South Houston (the "Surgery Centers"). The assets of the
Surgery Centers will be acquired by two Texas Limited Partnerships organized by
USP and its wholly-owned subsidiaries.
The accompanying pro forma condensed consolidated balance sheet has been
prepared by applying certain pro forma adjustments to historical financial
information, assuming the sale occurred on January 1, 1999. The pro forma
condensed consolidated statements of operations for the year ended December 31,
1998 and the six-month period ended June 30, 1999 have been prepared based upon
certain pro forma adjustments to historical financial information, assuming the
sale occurred on January 1, 1998 and January 1, 1999, respectively.
The pro forma data is not necessarily indicative of the operating results
or financial position that would have occurred had the transaction described
above been consummated at the dates indicated, nor necessarily indicative of
future operating results or financial position.
Basic net income (loss) per share of common stock is calculated by dividing
net income (loss) applicable to common stock by the weighted average number of
common shares outstanding during the period. Diluted net income (loss) per share
is not presented because stock options and convertible securities outstanding
during the periods presented were not dilutive.
B. Effect of Sale
(1) Reflects the Surgery Centers' financial position as of June 30, 1999 in
the balance sheet in addition to the following adjustments:
a. Increase to Cash of $10,562,000 to reflect the portion of the
purchase price payable upon closing.
b. Increase to Other Current Assets to reflect the $300,000 note
receivable due to ASC from USP.
c. Decrease to both Cash and Notes Payable of $421,000 to reflect
the pay-down on the line of credit which is secured by accounts
receivable.
d. Decrease to cash of $60,000 to reflect the cash sold to USP.
(2) Reflects the Surgery Centers' operating results and direct overhead
operating costs for the six month period ending June 30, 1999 in the
statement of operations.
(3) Reflects the Surgery Centers' operating results and direct overhead
operating costs for the fiscal year ended December 31, 1998 in the
statement of operations.
<PAGE>
ASSET PURCHASE AGREEMENT
among
AMEDISYS, INC.
AMEDISYS SURGERY CENTERS, L.C.
and
UNITED SURGICAL PARTNERS INTERNATIONAL, INC.
August 27, 1999
<PAGE>
TABLE OF CONTENTS PAGE
ARTICLE 1 PURCHASE AND SALE OF ASSETS 1
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF SELLER AND AMEDISYS 6
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF BUYER 15
ARTICLE 4 CERTAIN PRE-CLOSING COVENANTS 17
ARTICLE 5 CONDITIONS TO THE OBLIGATIONS OF BUYER 21
ARTICLE 6 CONDITIONS TO THE OBLIGATIONS OF SELLER 22
ARTICLE 7 CERTAIN POST-CLOSING COVENANTS 23
ARTICLE 8 INDEMNIFICATION 26
ARTICLE 9 MISCELLANEOUS 28
SCHEDULES
1.1.4 Equipment Leases
1.1.5 Contracts
1.1.10 Pasadena Real Property Description
1.5 Other Excluded Liabilities
1.6 Allocation of Purchase Price
2 Exceptions to Representations and Warranties
2.2 Governmental Permits and Consents
2.4 Balance Sheets
2.13 Employees of Seller
2.14 Insurance Policies
EXHIBITS
Exhibit A Bill of Sale and Assumption of Liabilities
Exhibit B Warranty Deed
Exhibit C Promissory Note
<PAGE>
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is made and entered into as of the 27th
day of August, 1999, by and among United Surgical Partners International, Inc.,
a Delaware corporation ("Buyer"), Amedisys, Inc. a Delaware corporation
("Amedisys"), Amedisys Surgery Centers, L.C., a Texas limited liability company
("Seller"), with reference to the following facts:
RECITALS
A. Seller presently owns and operates (1) a freestanding outpatient
surgery center known as the Surgery Center of South Houston (the "South Houston
Center"), located at 12700 North Featherwood Drive, Suite 100, Houston, Texas
77034 (the "South Houston Real Property"), and (2) a freestanding outpatient
surgery center known as the Surgery Center of Pasadena (the "Pasadena Center"),
located at 3534 Vista Drive, Pasadena, Texas 77504 (the "Pasadena Real
Property"). Amedisys owns 100% of the outstanding securities of Seller.
B. The South Houston Center and the Pasadena Center are sometimes
hereinafter collectively referred to as the "Surgery Centers" and, individually,
as a "Surgery Center"; and the South Houston Real Property and the Pasadena Real
Property are sometimes hereinafter collectively referred to as the "Real
Property."
C. Seller desires to sell, transfer and assign to Buyer, and Buyer
desires to purchase from Seller, the assets of the Surgery Centers on the terms
and conditions hereinafter set forth.
D. In order to achieve these purposes, Buyer and its wholly owned
subsidiaries have organized two Texas limited partnerships (the "Partnerships"),
one of which will acquire the assets of the South Houston Center (the "South
Houston Partnership") and the other will acquire the assets of the Pasadena
Center (the "Pasadena Partnership"). Buyer will contribute to the Partnerships
its rights under this Agreement and the purchase price to be paid to Seller so
that the Partnerships can purchase such assets from Seller.
THEREFORE, the parties hereto agree as follows:
AGREEMENT
ARTICLE 1
PURCHASE AND SALE OF ASSETS
1.1 Purchased Assets. Seller agrees to sell to the Partnership
designated by Buyer at the Closing (as defined below), and Buyer agrees to cause
the Partnerships to purchase,
<PAGE>
free and clear of all liens and obligations (except those which Buyer has
expressly agreed in Section 1.4 to assume), on the terms and subject to the
conditions set forth in this Agreement, all of the properties, business and
assets of Seller relating to either or both of the Surgery Centers of every kind
and description, real, personal and mixed, tangible and intangible, wherever
located (except those assets of Seller which are specifically excluded from this
sale by Section 1.2 hereof), as they shall exist at the Closing (collectively,
the "Purchased Assets"). Without limiting the generality of the foregoing, the
Purchased Assets shall include the following assets relating to either or both
of the Surgery Centers:
1.1.1 all equipment, surgical instruments, leasehold improvements,
construction in progress, furniture, fixtures and other fixed assets owned by
Seller relating to either or both of the Surgery Centers (the "Fixed Assets");
1.1.2 all supplies and inventories (including medicines and
consumables) of Seller relating to either or both of the Surgery Centers (the
"Inventory");
1.1.3 all receivables, including without limitation all accounts
receivable arising in the ordinary course of business of a Surgery Center, notes
receivable and insurance proceeds receivable, except as provided in Section
1.2(d) and except that, with respect to accounts receivable arising from the
Medicare, Medicaid or other governmental programs, the Purchased Assets shall
include only the proceeds of such governmental receivables (the "Receivables");
1.1.4 all of the interest of, and the rights and benefits accruing to
Seller as lessee under, all leases or rental agreements covering equipment,
furniture, fixtures and other personal property described in Schedule 1.1.4 (the
"Equipment Leases");
1.1.5 all of the rights and benefits accruing to Seller under all
contracts (other than the Equipment Leases and Seller's rights under its
existing lease of the South Houston Real Property) made by Seller in the
ordinary course of business of a Surgery Center that are listed on Schedule
1.1.5 (the "Contracts");
1.1.6 all of the rights and benefits accruing to Seller as lessee
under the South Houston Lease (as defined in Section 2.7);
1.1.7 all operating data and records, including without limitation
medical records, personnel files, financial, accounting and credit records,
correspondence, budgets and other similar documents and records, whether on
paper or computer stored and whether maintained by Seller or by an independent
contractor on behalf of Seller (the "Records"), except as provided in Section
1.2 (b);
1.1.8 all trade names (including the names "Surgery Center of South
Houston" and "Surgery Center of Pasadena"), goodwill, computer software,
operating rights, telephone and facsimile numbers, other licenses and permits
and other intangible property and rights relating to the business of a Surgery
Center, as and to the extent transferable under applicable laws (the "Intangible
Assets"), and all state or federal certificates of need, licenses,
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<PAGE>
permits or authorizations necessary for the operation of the Surgery Centers and
required for participation of any Surgery Center in the Medicare and Medicaid
programs, to the extent such certificates of need, licenses, permits or
authorizations are transferable (the "Permits");
1.1.9 all prepaid and deferred items, including prepaid rentals,
insurance, taxes, unbilled charges and deposits relating to the operations of
the Surgery Centers (the "Prepaid Items");
1.1.10 $60,000 cash and cash equivalent assets of Seller; and
1.1.11 the land that is described on Schedule 1.10, together with
all buildings and improvements thereon, that are part of the Pasadena Real
Property.
1.2 Excluded Assets. Anything to the contrary in Section 1.1
notwithstanding, the Purchased Assets shall exclude the following (collectively,
the "Excluded Assets"): (a) the rights of Seller and Amedisys under this
Agreement; (b) Seller's articles of organization, regulations, share
certificates, correspondence with legal counsel, securities ledger and any
minutes of proceedings of Seller's board of managers or members; (c) all rights
to receive any refunds relating to federal, state or local taxes paid by Seller;
and (d) all insurance payments for insured liabilities that are not Assumed
Liabilities (as defined below).
1.3 The Purchase Price. As consideration for the Purchased Assets
(the "Purchase Price"), subject to the terms and conditions set forth in this
Agreement, Buyer shall (a) pay directly to the lenders the outstanding principal
and accrued interest on the loans or capital leases due to Merrill Lynch
Business Financial Services, Inc. (which had an aggregate outstanding principal
balance of $843,323 as of June 30, 1999), First Interstate Bank of Texas (which
had an aggregate outstanding principal balance of $164,818 as of June 30, 1999),
DVI Financial Services, Inc. ("DVI") (which had an outstanding principal balance
of $84.777 as of June 30 1999) and GE Capital Corporation (which had an
outstanding principal balance of $8,165 as of June 30, 1999) (collectively, the
"Prepaid Debt"), (b) execute and deliver to Seller Buyer's Promissory Note,
which shall be substantially in the form of Exhibit C attached hereto, in the
outstanding principal amount of $300,000, and (c) cause the Partnerships to pay
at the Closing, by wire transfer of immediately available funds to such
account(s) as Seller may direct, a total of $10,700,000, subject to adjustment
as follows:
1.3.1. Working Capital Adjustment. The Purchase Price shall be
increased (if a positive number) or decreased (if a negative number) by the
amount obtained by subtracting $542,684 from the Combined Working Capital (as
defined below) of the Surgery Centers included in the Purchased Assets as of the
Effective Date. The "Combined Working Capital" shall mean the book value of
Seller's current assets of the type included in the Purchased Assets (including
$60,000 of cash) less current liabilities of the type included in the Assumed
Liabilities (other than the current principal portion of the Prepaid Debt, but
including the interest on the Prepaid Debt paid by Buyer pursuant to Section
1.3(a)) calculated on the accrual basis of accounting in accordance with
generally accepted accounting principles, consistently applied. The parties
acknowledge that $542,684 represents the Combined Working Capital of the Surgery
Centers, calculated pursuant to the Balance Sheets (as defined in Section 2.4)
and assuming the
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accuracy of the representations set forth in Section 2.4. For purposes of
determining the amount of the adjustment to the Purchase Price to be made at the
Closing pursuant to this Section 1.3.1, the parties will estimate the Combined
Working Capital using the most recent available month-end financial information,
which amount shall be used in lieu of the Effective Date Combined Working
Capital. The actual Effective Date Combined Working Capital of the Surgery
Centers shall be calculated following the Closing and the Purchase Price shall
be appropriately adjusted in accordance with Section 7.1 hereof.
1.4 Assumed Liabilities. Buyer agrees to and will at the Closing
cause the Partnerships to assume and agree to pay, discharge and perform when
lawfully due the following (collectively the "Assumed Liabilities"): (a) the
current liabilities of Seller set forth in the Balance Sheets (as defined
below), including such liabilities and other obligations of Seller that are
modified between the Balance Sheet Date and the Effective Date in the ordinary
course of business of the Surgery Centers, but excluding from such current
liabilities (i) any late fees, interest and similar charges on any such
liabilities and obligations that are more than 45 days past due as of the
Effective Date (which late fees, interest and similar charges shall be paid or
reimbursed by Seller at or immediately following the Closing) and (ii) any
amounts due on or with respect to the Prepaid Debt; and (b) the obligations,
duties and liabilities that arise under the South Houston Lease, the Equipment
Leases and the Contracts that arise on or after the Effective Date.
1.5 Excluded Liabilities. Anything herein to the contrary
notwithstanding, neither Buyer nor any Partnership shall assume, pay or be
responsible for any obligation, duty or liability of Seller or Amedisys other
than the Assumed Liabilities, including without limitation the following (the
"Excluded Liabilities");
1.5.1 The obligations of Seller and Amedisys under this
Agreement;
1.5.2 any obligation of Seller for federal, state, local or foreign
income, excise, real estate, personal property or license tax liability
(including interest and penalties) arising from the operations of Seller up to
the Effective Date or arising out of the sale and transfer of the Purchased
Assets pursuant hereto, other than property taxes accounted for in the
calculation of Combined Working Capital;
1.5.3 any obligation for any transfer, sales or other taxes, fees or
levies imposed by any state or other governmental entity on or arising out of
the sale and transfer of the Purchased Assets by Seller pursuant hereto;
1.5.4 any obligation of Seller for expenses incurred in connection
with the sale of the Purchased Assets pursuant hereto, including without
limitation the fees and expenses of their counsel and independent accountants;
1.5.5 any claim or contingent liability arising from the operations
of any Surgery Center or based upon any acts or omissions of Seller or Amedisys
or their respective employees, agents or independent contractors or any other
event or circumstance that has
-4-
<PAGE>
occurred or existed prior to the Effective Date, including without limitation
any malpractice claim, workers' compensation claim or claim of discrimination,
unlawful termination or sexual harassment, and all liabilities or obligations
arising under the Medicare or Medicaid programs or any other governmental or
third party payor program or any claim or contingent liability arising out of
environmental conditions at the Real Property or other environmental matters;
1.5.6 any late fee, interest or similar charge on any trade
payable or other current liability that is more than 45 days past due as of the
Effective Date;
1.5.7 any indebtedness of Seller or Amedisys, including without
limitation the Prepaid Debt;
1.5.8 any intercompany payable owed by Seller to Amedisys or any
affiliate or shareholder of Amedisys;
1.5.9 any obligation or liability of Seller listed on Schedule
1.5; and
1.5.10 any other liability of Seller, known or unknown, fixed or
contingent, the existence of which constitutes or will constitute a breach of
any representation or warranty of Seller or Amedisys contained in or made
pursuant to Article 2 of this Agreement.
1.6 Allocation of the Purchase Price Among the Purchased Assets. The
Purchase Price shall be allocated among each item or class of the Purchased
Assets as specifically set forth in the attached Schedule 1.6. Amedisys, Seller
and Buyer agree that they will prepare and file their federal and any state or
local income tax returns based on such allocation of the Purchase Price.
Amedisys, Seller and Buyer agree that they will prepare and file any notices or
other filings required pursuant to Section 1060 of the Internal Revenue Code of
1986, as amended (the "Code"), and that any such notices or filings will be
prepared based on such allocation of the Purchase Price.
1.7 Closing and Effective Date.
1.7.1 The Closing. The closing of the transactions provided for
herein (the "Closing") will take place at the offices of Buyer at 1:00 p.m.,
C.D.T., August 27, 1999, or at such other date, time or place as Buyer and
Amedisys shall agree. Such time and date are referred to herein as the "Closing
Date".
1.7.2 Effective Date. Regardless of when the Closing occurs it shall
be effective as of 12:01 a.m. on September 1, 1999 (the "Effective Date"), and
Buyer, Amedisys and Seller agree to acknowledge and use said Effective Date for
all purposes, including for accounting and federal and state tax reporting
purposes.
1.8 Disclaimer of Warranties. There are no representations or
warranties regarding the tangible Purchased Assets other than those expressly
set forth in Article 2 of this Agreement. SPECIFICALLY, THERE ARE NO IMPLIED
WARRANTIES, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR
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<PAGE>
A PARTICULAR PURPOSE, WITH RESPECT TO THE EQUIPMENT, INVENTORY OR SUPPLIES, ANY
AND ALL OF WHICH IMPLIED WARRANTIES ARE HEREBY DISCLAIMED BY AMEDISYS AND
SELLER.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLER
AND AMEDISYS
In order to induce Buyer to enter into this Agreement and to
consummate the transactions contemplated hereunder, Seller and Amedisys jointly
and severally make the following representations and warranties, subject to the
qualifications and exceptions set forth in Schedule 2 attached hereto, which
Schedule 2 references the specific sections in this Article 2 that the disclosed
exception relates to:
2.1 Organization, Power and Authority of Seller. Amedisys is a
corporation duly organized and legally existing in good standing under the laws
of its state of incorporation (as described on page 1 of this Agreement).
Seller is a limited liability company duly organized and legally existing in
good standing under the laws of the State of Texas. Amedisys and Seller each
has full power and authority (a) to own or lease its properties and to carry on
its business as it is now being conducted, (b) subject to receipt of the
consents and approvals described in Schedule 2.2 and Section 5.2, to enter into
this Agreement and to sell, convey, transfer, assign and deliver the Purchased
Assets to the Partnership as provided herein and (c) to carry out the other
transactions and agreements contemplated hereby. Without limiting the
generality of the foregoing, Amedisys and Seller have obtained all necessary
approvals from their respective boards of directors, shareholders, managers and
members necessary for the execution, delivery and performance of this Agreement
by Amedisys and Seller.
2.2 Binding Obligation. The execution and delivery of this Agreement
by Seller and Amedisys, and the consummation of the transactions contemplated
hereby, will not: (a) conflict with or violate any provision of the articles of
organization or regulations of Seller or the articles of incorporation or
bylaws of Amedisys, or any law, ordinance or regulation or any decree or order
of any court or administrative or other governmental body which is either
applicable to, binding upon or enforceable against Seller or Amedisys; or (b)
subject to receipt of the consents described in Section 5.2, result in a breach
of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify or cancel, or require any
notice under, any mortgage, contract, agreement, indenture, trust or other
instrument which is either binding upon or enforceable against Seller or
Amedisys or their respective assets and properties, which conflict, violation,
breach or default could have a material adverse effect upon the Purchased Assets
or the business, financial condition, prospects or results of operations of any
Surgery Center (a "Material Adverse Effect"). Except as described in Schedule
2.2, no permit, consent, approval or authorization of, or declaration to or
filing with, any regulatory or other government authority is required in
connection with the execution and delivery of this Agreement by Seller or
Amedisys and the consummation by them of the transactions contemplated hereby.
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2.3 Ownership of Seller. Amedisys owns, both beneficially and of
record, all of the issued and outstanding equity securities in Seller. All of
the issued and outstanding ownership interests of Seller are validly authorized
and issued and are fully paid and non-assessable.
2.4 Financial Statements of Seller. Amedisys has previously
furnished to Buyer the following financial statements of each Surgery Center:
(a) unaudited balance sheet as of December 31, 1998; (b) unaudited balance sheet
as of June 30, 1999 (the "Balance Sheet Date"); (c) unaudited statements of
income and cash flows for the year ended December 31, 1998; and (d) unaudited
statements of income and cash flow for the period from January 1, 1999 through
the Balance Sheet Date. Such financial statements present fairly the financial
position of each Surgery Center at each of the said balance sheet dates and the
results of its operations and cash flows for each of the said periods covered,
and they have been prepared on an accrual basis and are in conformity with
generally accepted accounting principles applied on a consistent basis (except
such interim financial statements are not audited and do not include footnote
disclosures). The unaudited balance sheets of each Surgery Center at the
Balance Sheet Date are attached hereto as Schedule 2.4 and are referred to
herein individually as the "Pasadena Balance Sheet" and the "South Houston
Balance Sheet" and, collectively, as the "Balance Sheets."
2.5 Liabilities of Seller. Seller does not have any liabilities or
obligations, either accrued, absolute, contingent or otherwise, relating to or
affecting either or both of the Surgery Centers except: (a) to the extent
reflected in its Balance Sheet and not heretofore paid or discharged; (b) as
specifically set forth in or incorporated by express reference in any of the
Schedules attached hereto; and (c) trade payables, accrued employee benefits and
other normal liabilities incurred in the ordinary course of business since the
Balance Sheet Date and accounted for in the calculation of Combined Working
Capital. The Prepaid Debt may be paid in full at the Closing without any
prepayment penalty or similar charge.
2.6 Tax Matters. Seller (a) has timely filed all tax returns and
reports required to be filed by it, including without limitation all federal,
state, local and foreign income, franchise and withholding tax returns and
statements, (b) has paid in full or made adequate provision by the establishment
of reserves for all taxes and other charges which have become due, and (c) does
not have any knowledge of any tax deficiency proposed or threatened against it.
There are no tax liens upon any property or assets of Seller. Seller has made
all payments of estimated taxes when due in amounts sufficient to avoid the
imposition of any penalty. All taxes and other assessments and levies which
Seller was required by law to withhold or to collect have been duly withheld and
collected and have been or will be paid over to the proper governmental entity
on or before the due date, unless some or all of said taxes or other assessments
and levies are being disputed in good faith (which disputes are described in
Schedule 2 attached hereto), in which case any undisputed portion will be paid
over as stated above.
2.7 The South Houston Real Property. The South Houston Real Property
is owned by South Green Limited Partnership, a Nevada limited partnership (the
"Landlord"), and is leased by Seller from the Landlord pursuant to that certain
Office Lease Agreement dated July 10, 1995, as amended by an Amendment dated as
of October 1, 1996 (collectively, the "South
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Houston Lease"). Landlord is not affiliated with Amedisys. Except for Seller's
rights under the South Houston Lease, no one has any option or right of first
refusal to purchase, lease or rent the South Houston Real Property or any
portion thereof. In addition, Amedisys and Seller jointly and severally make the
following representations and warranties regarding the South Houston Real
Property:
2.7.1 The South Houston Lease is in full force and effect and
constitutes the valid and binding agreement of the parties thereto. As of the
Closing Date, no party will be in default under the South Houston Lease and no
event or condition shall have occurred or exist which, with the passage of time,
the giving of notice or both, would cause either Seller or (to Amedisys'
knowledge) Landlord to be in default thereunder.
2.7.2 The improvements located on the South Houston Real Property
have been approved by all governmental authorities having jurisdiction. A
permanent certificate of occupancy and all licenses, permits, authorizations and
approvals required by all governmental authorities having jurisdiction have been
issued for such improvements and, as of the Closing, all of the foregoing will
be in full force and effect.
2.7.3 No zoning, building, flood control, fire, safety, toxic
materials, hazardous waste or other law, code, order, regulation or restriction
is violated in any material respect by the continuing maintenance, operation or
use of any of the South Houston Real Property.
2.7.4 There are no material structural defects in any of the
improvements located on the South Houston Real Property. The heating,
electrical, plumbing and drainage systems at or servicing the South Houston Real
Property and all facilities and equipment relating thereto are in good working
condition and repair (subject to normal wear and tear) and, together with the
Purchased Assets, the South Houston Real Property is adequate for the business
of the South Houston Center.
2.7.5 No portion of the South Houston Real Property is subject to or
affected by any special assessment, whether or not such special assessment
constitutes a lien on the South Houston Real Property. Amedisys has provided
Buyer with complete and accurate copies of all property tax statements for the
current and the preceding tax year, and Amedisys has no knowledge of any
proposed increase in the assessed value of the South Houston Real Property for
property tax purposes.
2.7.6 The South Houston Real Property is not located in a state or
federally designated flood hazard area.
2.7.7 The South Houston Real Property (a) has direct access to public
roads or access to public roads by means of a perpetual access easement, such
access being sufficient to satisfy the current and reasonably anticipated normal
transportation requirements of the South Houston Center's business, and (b)
includes adequate parking facilities and is served by all utilities, including
but not limited to water, electricity, natural gas, sewer and telephone, in
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such quantity and quality as are sufficient to satisfy the current normal
utilization levels of the South Houston Center.
2.7.8 Neither Seller nor (to the knowledge of Amedisys) Landlord has
received notice of any condemnation proceeding with respect to any portion of
the Real Property and, to the knowledge of Amedisys, no such proceeding is
contemplated by any governmental authority.
2.8 The Pasadena Real Property. The Pasadena Real Property is
currently owned by Seller. No one has any option or right of first refusal to
purchase, lease or rent the Pasadena Real Property or any portion thereof. In
addition, Seller and Amedisys jointly and severally make the following
representations and warranties regarding the Pasadena Real Property:
2.8.1 Except for the Deed of Trust, Security Agreement, Financing
Statement and Assignment of Rents, dated as of May 19, 1997 (the "First
Mortgage"), in favor of Merrill Lynch Business Financial Services, Inc. (the
"Lender"), Seller has not conveyed any lien, encumbrance, lease, easement or
other interest in the Pasadena Real Property to any third party.
2.8.2 The improvements located on the Pasadena Real Property have
been approved by all government authorities having jurisdiction. A permanent
certificate of occupancy and all licenses, permits, authorizations and approvals
required by all governmental authorities having jurisdiction have been issued
for such improvements and, as of the Closing Date, all of the foregoing will be
in full force and effect.
2.8.3 All utilities required for the operation of the Pasadena Center
enter the Pasadena Real Property through adjoining streets or through adjoining
private land in accordance with valid public or private easements that will
inure to the benefit of the Pasadena Partnership. All of said utilities are
installed and operating, all installation and connection charges have been paid
in full and the right to return of any deposit or contribution in connection
therewith shall inure to the Pasadena Partnership.
2.8.4 No zoning, building, flood control, fire, safety, toxic
materials, hazardous waste or other law, ordinance, code, order, regulation or
restriction is violated in any material respect by the continuing maintenance,
operation or use of any of the Pasadena Real Property. No material default or
breach exists under any of the covenants, conditions, restrictions, rights of
way or easements affecting the Pasadena Real Property or any portion thereof.
2.8.5 There are no material structural defects in any of the
improvements located on the Pasadena Real Property. The heating, electrical,
plumbing and drainage systems at or servicing the Pasadena Real Property and all
facilities and equipment relating thereto are in good working condition and
repair (subject to normal wear and tear) and, together with the other Purchased
Assets, the Pasadena Real Property is adequate for the business of the Pasadena
Center.
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2.8.6 No portion of the Pasadena Real Property is subject to or
affected by any special assessment, whether or not such special assessment
constitutes a lien on the Pasadena Real Property. Amedisys has provided Buyer
with complete and accurate copies of all property tax statements for the current
and the preceding tax year, and Amedisys has no knowledge of any proposed
increase in the assessed value of the Pasadena Real Property for property tax
purposes.
2.8.7 There are adequate means of ingress and egress for vehicular
and pedestrian traffic to and from the Pasadena Real Property and each adjoining
street, road or highway, and all routes of ingress and egress to and from the
Pasadena Real Property, to the extent that they pass through adjoining land, do
so in accordance with valid public or private easements which will insure to the
benefit of the Pasadena Partnership. There are adequate parking facilities to
serve the Pasadena Center without the necessity of building or leasing any
additional facilities or space, and the number of parking spaces that is
available for the Pasadena Center complies with all applicable ordinances,
statutes and regulations.
2.8.8 The Pasadena Real Property is not located in a state or
federally designated flood hazard area.
2.8.9 Seller has not received notice of any condemnation proceeding
with respect to any portion of the Pasadena Real Property and, to the knowledge
of Amedisys, no such proceeding is contemplated by any governmental authority.
2.9 Good Title to and Condition of the Purchased Assets. At the Closing,
Seller will have good title to all of the Purchased Assets (other than the
rights of equipment lessors under the Equipment Leases), free and clear of all
liens, mortgages, pledges, encumbrances or charges of every kind, nature, and
description whatsoever. The Purchased Assets constitute, in the aggregate, all
of the property necessary for the conduct of the businesses of the Surgery
Centers in the manner and at the utilization levels at which such business is
currently being conducted. The Purchased Assets are in good operating condition,
ordinary wear and tear excepted. The Inventory consists of items of a quality
and quantity usable in the normal course of Seller's businesses at values in the
aggregate at least equal to the values at which such items are carried on their
books. Seller has the right to use, free and clear of any royalty or other
payment obligation, and without any claim of infringement, all service marks,
trade names, logos, trade secrets and copyrights used or needed by Seller in the
conduct of its business; and Seller has not received any notice of any conflict
with or violation or infringement of any asserted rights of any other person or
entity with respect to any such trade name or other Intangible Asset used in the
operation of any Surgery Center.
2.10 Permits and Accreditation. Seller possesses all licenses and
other required governmental or official approvals, permits or authorizations,
the failure to possess which would have a Material Adverse Effect, including
without limitation (a) all licensure, including any certificates of need,
required for Seller to operate each Surgery Center as a surgical center in the
State of Texas and (b) all the conditions required for participation in the
Medicare and Medicaid programs, including without limitation compliance with
"life safety programs." All
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such licenses, approvals, permits and authorizations are in full force and
effect, Seller is in compliance with their requirements and, to the best of
Amedisys' knowledge, no proceeding is pending or threatened to revoke or amend
any of them. Each Surgery Center is authorized to receive (and has received)
payments for procedures covered by the Medicare and Medicaid programs. The
Surgery Centers are accredited by either the Joint Commission on Accreditation
of Healthcare Organizations or the Accreditation Association for Ambulatory
Healthcare, Inc. No certificate of need, governmental consent, review or other
process is required in connection with the transfer of the Purchased Assets
provided for herein or in order for the Surgery Centers to continue their
respective businesses following the consummation of the transactions
contemplated hereby.
2.11 Relationships with its Managed Care Customers. Amedisys does
not know of any written or oral communication, fact, event or action which
exists or has occurred within 90 days prior to the date of this Agreement which
would tend to indicate that any current party with whom Seller has a managed
care contract and which accounted for over 5% of the total net revenues of a
Surgery Center for the year ended December 31, 1998 or the six month period
ended on the Balance Sheet Date will terminate its business relationship with
such Surgery Center.
2.12 The Equipment Leases and Contracts. Schedules 1.1.4 and 1.1.5
attached hereto set forth (a) a true and complete list of each lease of personal
property used at a Surgery Center to which Seller is a party or by which it is
bound, and (b) any other agreement, contract or commitment relating to either or
both of the Surgery Centers to which Seller is a party or by which it is bound
(other than the South Houston Lease and any insurance policies), including all
documents relating to the Prepaid Debt. Amedisys has delivered to Buyer or its
counsel true and complete copies of the documents and instruments described in
Schedule 1.1.4 or 1.1.5 and all of the agreements, contracts, leases and
instruments listed therein are valid and binding, and neither Seller nor (to the
knowledge of Amedisys) any other party thereto has breached any provision of, or
is in default of the terms of, and there are no facts or circumstances which
would reasonably indicate that Seller will or may be in such breach or default,
which invalidity, breach or default could have a Material Adverse Effect.
Seller is not bound by any noncompetition covenant or other agreement that, upon
completion of the transactions contemplated hereby, will restrict Buyer or any
Partnership from carrying on its business anywhere in the world. To the
knowledge of Amedisys, neither Seller, Amedisys or any Affiliate (as hereinafter
defined) of Seller or Amedisys, any manager, officer, director or employee of
Seller or Amedisys nor any member of the medical staff of any Surgery Center,
has any direct or indirect interest in any customer or supplier of any Surgery
Center, in any person from whom or to whom Seller leases real or personal
property used by a Surgery Center or in any other person with whom Seller is
doing business in connection with a Surgery Center. As used in this Agreement,
the term "Affiliate" means, with respect to a specified person, such person's
spouse and minor children (and any trust that benefits any such person and any
entity in which such person has a financial interest) and, with respect to an
entity, any other entity or person which directly, or indirectly through one or
more intermediaries, controls or is controlled by, or is under common control
with, the entity specified. No Affiliate of Amedisys is a party to any contract
or lease identified as Schedule 1.1.4 or 1.1.5.
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2.13 Compensation and Benefits. Schedule 2.13 attached hereto sets
forth a true and complete list of (a) the name and current annual salary of
each employee and consultant who provides services to any Surgery Center and
whose current annual compensation is in excess of $25,000, (b) the profit
sharing, bonus or any other form of compensation (other than salary) paid or
payable by Seller to or for the benefit of each such person for Seller's most
recent fiscal year and (c) any written or oral employment or other agreement of
Seller with any of its officers, employees or consultants who provides services
to any Surgery Center. Amedisys has previously furnished Buyer with a true and
complete copy (or a written description, if oral) of each agreement, contract or
commitment that is listed in Schedule 2.13. There has not been any default in
any obligation to be performed by Seller under any such instrument which could
have a Material Adverse Effect.
2.14 Insurance Policies. Seller carries insurance, including without
limitation malpractice insurance with coverage limits of at least $1,000,000 per
occurrence and $3,000,000 in the aggregate, with reputable insurers, covering
all of its assets, properties and business. Attached as Schedule 2.14 is a
brief description of all outstanding insurance policies of Seller that are
currently in effect, including coverage limits and deductibles applicable
thereto. All premiums which have become due under such policies of insurance
have been paid in full, all of such policies are now in full force and effect
and Seller has not received notice from any insurer, agent or broker of the
cancellation of any of such policy or bond or any denial of any claim made by
Seller or other notice denying or disputing any coverage for any such claim or
the amount of any claim. Seller has no claim against any of its insurers under
any of such policies pending or anticipated and there has been no occurrence of
any kind which would give rise to any such claim.
2.15 Litigation Involving Seller. There are no actions, suits,
claims, governmental investigations or arbitration proceedings pending or, to
the knowledge of Amedisys, threatened against or affecting Seller or any of the
Purchased Assets and, to the knowledge of Amedisys, there is no basis for any of
the foregoing. There are no outstanding orders, decrees or stipulations issued
by any federal, state, local or foreign judicial or administrative authority in
any proceeding to which Seller is or was a party. Schedule 2 contains a
complete and accurate description of the status of any matter covered thereby
that references this Section 2.15, and Seller carries insurance that will cover
the costs, expenses and damages of each of the matters described therein (which
insurance coverage shall continue in effect as to such identified matters
following the Closing). Seller acknowledges that Buyer is not assuming any
liability or responsibility with respect to any matter described in Schedule 2
that references this Section 2.15. No employee or former employee of Seller has
made any claim of sexual harassment, discrimination, wrongful termination or any
violation of OSHA, and Seller has not received any notice that the EEOC or any
state agency has issued a "right to sue" letter with respect to any employee or
former employee of Seller. Neither the U.S. Department Health and Human Service
nor any state agency has conducted or has given Seller or Amedisys any notice
that it intends to conduct any audit or other review of any Surgery Center's
participation in the Medicare or the Medicaid program or any other governmental
program and, to the knowledge of Amedisys, no such audit or review would result
in any material liability by Seller for any reimbursement, penalty interest with
respect to payments received by Seller thereunder.
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Amedisys does not know of any reason why the Surgery Centers will not or may not
be able to continue their respective businesses, as presently conducted,
following the Closing.
2.16 The Records. The Records are accurate and complete in all
material respects and there are no material matters as to which appropriate
entries have not been made in the Records.
2.17 No Material Adverse Change. Since the Balance Sheet Date, there
has not been (a) any change in the business, properties or financial condition
of any Surgery Center, other than changes occurring in the ordinary course of
business which in the aggregate have not had a Material Adverse Effect, or (b)
to the best of knowledge of Amedisys, any threatened or prospective event or
condition of any character whatsoever which could have a Material Adverse
Effect.
2.18 Absence of Certain Acts or Events. Except as approved in
writing by Buyer, since the Balance Sheet Date Seller has not: (a) paid any
bonus or increased the rate of compensation of any of its employees who provide
services to any Surgery Center (other than previously scheduled bonuses and
annual increases in accordance with Seller's past practices); (b) sold,
transferred or encumbered any Surgery Center assets other than in the ordinary
course of business; (c) obligated itself to make capital expenditures relating
to a Surgery Center where the unpaid balance as of the Effective Date will be
more than $10,000; (d) incurred any material obligations or liabilities or
entered into any material transaction relating to a Surgery Center, except for
this Agreement and the transactions contemplated hereby; or (e) suffered any
theft, damage, destruction or casualty loss in excess of $10,000.
2.19 Compliance with Laws. Seller is in compliance with all laws,
regulations and orders presently applicable to the Surgery Centers or the
Purchased Assets. Seller has not received notification of any asserted past or
present failure to comply with any laws and, to the knowledge of Amedisys, no
proceeding with respect to any such violation is contemplated. Neither Seller
nor any of its employees or agents has made or agreed to make any payment in
connection with the business of Seller that is prohibited by law.
2.20 Environmental Matters. Seller (a) has not conducted or
authorized the generation, transportation, storage, treatment or disposal on or
at any Surgery Center of any solid, liquid, hazardous, toxic or dangerous
wastes, except in compliance with the Environmental Laws (as defined below), (b)
has not received notice or has any knowledge that any governmental authority or
any employee or agency thereof has determined or threatens to determine that
there is any violation of Environmental Laws at or caused by any Surgery Center
or Real Property, and (c) has not had any communication or agreement from or
with any governmental authority or agency having jurisdiction over any Surgery
Center or Real Property or any private entity (including without limitation the
Landlord or any prior owners of any Real Property) relating any actual or
alleged violation of the Environmental Laws. For the purposes of this Section
2.20, the "Environmental Laws" shall mean the Comprehensive Environmental
Response, Compensation and Liability Act, as amend, 42 U.S.C. Sec. 9601 et seq.,
the Emergency Planning and Community Right-to-Know Act, as amended, 42 U.S.C.
Sec. 11001 et
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seq., the Medical Waste Tracking Act of 1988, 42 U.S.C. Sec. 6992 et seq., and
the National Institute for Occupational Self-Safety and Health Infectious Waste
Disposal Guidelines, Publication No. 88-119 of the U.S. Department of Health and
Human Services, and any other federal, state or local environmental laws, water
quality standards, ordinances or regulations that may now impose standards of
conduct or liability concerning solid, liquid, hazardous, toxic or dangerous
wastes, substances or materials.
2.21 Labor Relations. Seller is not a party to or bound by any
collective bargaining agreement or any other agreement with a labor union, and
there has been no effort by any labor union during the 24 months prior to the
date hereof to organize any employees of any Surgery Center into one or more
collective bargaining units. To the knowledge of Amedisys, neither Seller or
any agent, representative or employee of Seller has been accused of committing
any unfair labor practice. There has been no strike, walkout or work stoppage
involving any of the employees of Seller during the 24 months prior to the date
hereof. To the knowledge of Amedisys, no key employee or group of employees has
any plans to terminate his, her or their employment with Seller.
2.22 Pension, Profit Sharing and Retirement Plans. Except as
described Schedule 2, Seller does not now maintain and has never maintained any
qualified or unqualified pension, profit sharing or retirement plan. Seller
does not participate in, nor has it ever participated in, any multi-employer
pension or retirement plan. Neither Buyer nor any Partnership will incur any
obligation or liability under or relating to any such plan as a result of the
transactions contemplated by this Agreement, or otherwise.
2.23 Receivables. Amedisys has previously delivered to Buyer lists
(including agings) of all Receivables of Seller as of December 31, 1998 and as
of the Balance Sheet Date. All of the Receivables either listed thereon or set
forth or reflected in the Balance Sheets were, as of the dates as of which the
information is given therein, and as of the Closing Date all of the Receivables
will be, valid accounts receivable which have arisen from bona fide transactions
in the ordinary course of Seller's businesses. Although Amedisys knows of no
reason why such Receivables will not be collected on a timely basis, no
representation or warranty is made that such accounts will be collected.
2.24 Medical Staff Matters. Amedisys has heretofore delivered to
Buyer true and complete copies of the bylaws and the rules and regulations of
the medical staff of each Surgery Center. With regard to the medical staffs of
the Surgery Centers, there are no pending or, to the best knowledge of Amedisys,
threatened disputes with applicants, staff members or health professional
affiliates, and all appeal periods in respect of any medical staff member or
applicant against whom an adverse action has been taken have expired. Amedisys
has provided Buyer with a written description of all adverse actions taken
against medical staff members or applicants within the past two years.
2.25 No Finders or Brokers. As a result of any act or failure to act
by Seller, Amedisys or any of their affiliates, no person or entity has, or as
a result of the transactions contemplated hereby will have, any right, interest
or claim against or upon Buyer or any of its
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affiliates or any Partnership for any commission, fee or other compensation as a
finder, broker or in any similar capacity.
2.26 Accuracy of Information. No representation, statement or
information made or furnished by Amedisys or Seller to Buyer, including those
contained in this Agreement and the various Schedules attached hereto prepared
by or relating to Seller and the other information and statements referred to
herein and previously furnished to Buyer pursuant hereto, contains or shall
contain any untrue statement of a material fact or omits or shall omit any
material fact necessary to make the information contained therein not
misleading.
As used in this Agreement, "to the knowledge of Amedisys," "known to
Amedisys" and similar phrases shall mean all matters in any documents or files
in the possession of Amedisys or Seller and the actual knowledge after due
inquiry of the managers, officers and directors of Seller and Amedisys and of
the Administrator of each Surgery Center.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER
In order to induce Seller and Amedisys to enter into this Agreement
and to consummate the transactions contemplated hereby, Buyer makes the
following representations and warranties:
3.1 Organization, Power and Authority of Buyer; Due Authorization.
Buyer is a corporation duly organized and legally existing in good standing
under the laws of the State of Delaware, with full corporate power and authority
to enter into this Agreement and to carry out the transactions and agreements
contemplated hereby. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action of Buyer.
3.2 Binding Obligation; Noncontravention. This Agreement has been
duly executed and delivered by Buyer and is a valid and binding obligation of
Buyer, enforceable in accordance with its terms. Neither the execution and
delivery of this Agreement by Buyer nor the consummation of the transactions
contemplated hereby will: (a) conflict with or violate any provision of the
certificate of incorporation or bylaws of Buyer or of any law, ordinance,
regulation or decree or order of any court or administrative or other
governmental body which is either applicable to, binding upon or enforceable
against Buyer; or (b) result in a breach of, constitute a default under, result
in the acceleration of, create in any party the right to accelerate, terminate,
modify or cancel, or require any notice under, any mortgage, contract,
agreement, indenture or other instrument which is either binding upon or
enforceable against Buyer, which conflict, violation, breach or default could
have a material adverse effect upon the business, financial condition, prospects
or results of operations of Buyer. No permit, consent, approval or
authorization of, or declaration to or filing with, any regulatory or other
government authority is required in connection with the execution and delivery
of this Agreement by Buyer and the consummation of the transactions contemplated
hereby, except as required by Section 5.2.
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3.3 No Finders or Brokers. As a result of any act or failure to act
by Buyer, no person or entity has, or as a result of the transactions
contemplated hereby will have, any right, interest or claim against or upon
Seller or Amedisys for any commission, fee or other compensation as a finder,
broker or any similar capacity.
3.4 Litigation. There are no actions, suits, claims, governmental
investigations or arbitration proceedings pending or, to the knowledge of Buyer,
threatened against or affecting Buyer in connection with or relating to the
transactions contemplated by this Agreement and, to the knowledge of Buyer,
there is no basis for any of the foregoing.
3.5 Accuracy of Information. No representation, statement or
information made or furnished by Buyer to Amedisys or Seller, including those
contained in this Agreement and the various Schedules attached hereto prepared
by or relating to Buyer and the other information and statements referred to
herein and previously furnished by Buyer to Amedisys or Seller pursuant hereto,
contained or shall contain any untrue statement of a material fact or omits or
shall omit any material fact necessary to make the information contained therein
not misleading.
3.6 Adverse Facts and Circumstances. Buyer is experienced in owning,
operating and managing ambulatory surgical centers. Buyer has consulted with
its legal and financial consultants regarding governmental legislation, rules
and regulations governing or otherwise pertaining to ambulatory surgical
centers. Except as specifically set forth herein, neither Amedisys nor Seller,
nor representatives of either, has made any representation or warranty to Buyer
regarding the future performance or prospects of the Surgery Centers. Buyer
acknowledges that changes to governmental legislation, rules and/or regulations
may result in a material adverse change to the Surgery Centers as compared to
the operation and performance of the Surgery Centers prior to such changes.
Nothing in this Section 3.6 shall affect Buyer's right to rely upon the
representations and warranties made by Seller and Amedisys in or pursuant to
this Agreement.
3.7 Acknowledgement Regarding Year 2000 Compliance. Buyer
acknowledges that (a) all Year 2000 Compliance efforts of Amedisys and/or Seller
with respect to the Surgery Centers will terminate as of the Closing Date and
(b) notwithstanding anything to the contrary contained herein, Amedisys and
Seller make no representation or warranty regarding Year 2000 Compliance with
respect to any of the Purchased Assets. As used herein, the term "Year 2000
Compliance" includes the ability to perform any of the following functions: (i)
to consistently handle date information before, at and after January 1, 2000,
including accepting date input, providing date output and performing
calculations on dates or portions of dates; (ii) to function accurately without
interruption (or disruption of other software or systems) before, at and after
January 1, 2000, without any change in operations associated with the advent of
the new century; (iii) to respond to two-digit date input in a way that resolves
any ambiguity as to century; and (iv) to store and provide output of date
information in ways that are unambiguous as to century.
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ARTICLE 4
CERTAIN PRE-CLOSING COVENANTS
4.1 Best Efforts. Each of the parties hereto will use commercially
reasonable efforts to cause to be satisfied, as soon as practicable and prior to
the Closing Date, all of the conditions to the obligations of the other parties
to close the purchase and sale of the Purchased Assets pursuant to this
Agreement, including without limitation obtaining all governmental consents and
licenses, if any, that are required in order for the Partnerships to own and
operate the Surgery Centers at and after the closing
4.2 Conduct of Business Pending the Closing. From and after the
execution and delivery of this Agreement and until the Closing Date, except as
expressly contemplated by this Agreement or with the prior written consent of
Buyer:
4.2.1 Seller will conduct the business and operations of the Surgery
Centers in the manner in which the same have heretofore been conducted;
4.2.2 Seller will maintain all of the properties of the Surgery
Centers in customary repair, order and condition, reasonable wear and tear
excepted, and maintain insurance of such types and in such amounts upon all of
its properties and with respect to the conduct of its business as are in effect
on the date of this Agreement; and
4.2.3 Seller will not (a) pay any bonus or increase the rate of
compensation of any Surgery Center employee (other than the bonus and raise due
to Lori Yarbrough described in Schedule 2.2, with reference to Section 2.18) or
enter into any new employment agreement or amend any existing employment
agreement with any Surgery Center employee, (b) sell, lease, transfer or assign
any Surgery Center assets other than in the ordinary course of business, (c)
make or obligate itself to make capital expenditures relating to the Surgery
Centers, the unpaid balance on which aggregates more than $10,000 as of the
Effective Date, or (d) incur any material obligations or liabilities or enter
into any material transaction relating to the Surgery Centers.
4.3 Access to Seller's Facilities, Properties and Records. From and
after the execution and delivery of this Agreement, Seller will afford to the
representatives of Buyer access, during normal business hours and upon
reasonable notice, to Seller's premises, to the Surgery Center employees
(including the Administrators of the Surgery Centers) and to the members of the
medical staffs of the Surgery Centers, all in order to enable Buyer to inspect
and evaluate the Purchased Assets and the Surgery Centers. Amedisys shall cause
its employees, Melany R. Pierson and Lori Yarbrough, to assist Buyer in
arranging meetings with members of the medical staffs; Buyer will provide
sufficient notice and the opportunity for either Ms. Pierson or Ms. Yarbrough to
attend any such meetings with medical staff members, and Buyer will submit to
either Ms. Pierson or Ms. Yarbrough any proposed correspondence to a medical
staff member for approval prior to such correspondence being sent. Amedisys
will furnish to Buyer's representatives during such period all such information
relating to the foregoing investigation as they may reasonably request;
provided, however, that any such investigation by Buyer (a) shall
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be conducted in a manner that does not unduly interfere with the business of the
Surgery Centers and (b) shall not affect the right of Buyer to rely on the
representations and warranties made by Seller and Amedisys in or pursuant to
this Agreement. Buyer will hold in confidence all documents and information
concerning Seller so furnished and, if the sale of the Purchased Assets pursuant
hereto shall not be consummated, such confidence shall be maintained and Buyer
will not use or disclose to any person any such document or information (except
to the extent that such information can be shown to be previously available to
Buyer, publicly available or disclosed to Buyer by a person who is not obligated
to maintain the confidentiality of such information).
4.4 No Disclosure. Without the prior written consent of Buyer and
Amedisys, none of the parties hereto will, prior to the Closing Date, disclose
the existence of any term or condition of this Agreement to any person or
entity, except that such disclosure may be made by a party (a) to any person in
a business relationship with such party to whom such disclosure is necessary in
order to satisfy each of the conditions to the consummation of the transactions
provided for in this Agreement, and (b) to the extent such party believes in
good faith that such disclosure is required by law (in which case such party
will consult with Buyer and Amedisys prior to making such disclosure).
4.5 No Other Discussions. Neither Seller nor Amedisys will, prior to
the Closing Date, enter into discussions, provide information regarding any
Surgery Center or negotiate with or entertain or accept the unsolicited offer of
any other party concerning or in connection with a potential sale of all or any
part of the assets or ownership interests of Seller to, or the merger or
consolidation of Seller with, any person or entity other than Buyer. If any
person or entity requests that Amedisys or Seller breach this Section 4.5,
Amedisys shall immediately notify Buyer of such request or requirement.
4.6 Casualty. If any of the Purchased Assets are damaged, lost or
destroyed (whether by fire, theft, vandalism or other cause or casualty) in
whole or in part prior to Closing, and the fair market value of such damage or
destruction is less than $150,000, Buyer may, at its option, either (a) reduce
the Purchase Price by the fair market value of the Purchased Assets destroyed,
such value to be determined as of the date immediately prior to such destruction
or, as the case may be, by the estimated cost to restore the damaged Purchased
Assets, or (b) require Amedisys upon Closing to transfer the proceeds (or the
right to the proceeds) of applicable insurance to Buyer, and Buyer may restore
such Purchased Assets. If any part of the Purchased Assets are so damaged, lost
or destroyed in whole or in part prior to Closing, and the fair market value is
greater than $150,000, Buyer may, at its option, either (i) require Amedisys
upon Closing to transfer the proceeds (or the right to the proceeds) of
applicable insurance to Buyer, and Buyer may restore such Purchased Assets, (ii)
terminate this Agreement in its entirety or (iii) reduce the Purchase Price by
the fair market value of the Purchased Assets destroyed, such value to be
determined as of the date immediately prior to such destruction or, as the case
may be, by the estimated cost to restore the damaged Purchased Assets.
4.7 Costs of Agreement. Subject to Sections 4.11.6 and 7.8, each of
the parties hereto agrees to bear all of its own expenses incurred in preparing
or complying with this
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Agreement, including without limitation all legal and accounting expenses and
fees. All such expenses incurred and to be paid by Seller shall be paid out of
the Purchase Price.
4.8 Interim Operating Reports. Amedisys shall cause the management
personnel of the Surgery Centers to notify Buyer in writing of any material
adverse change in the financial position or earnings of any Surgery Center, any
unexpected emergency or other unanticipated change in the business of any
Surgery Center, any governmental complaints, investigations or hearings or
adjudicatory proceedings (or communications indicating that the same may be
contemplated) or any litigation, arbitration or other such matter that has been
filed or threatened against Seller. As soon as available, Amedisys shall
provide Buyer with an unaudited balance sheet and income statement of each
Surgery Center which reflects the operations of such Surgery Center for each
calendar month after the Balance Sheet Date and prior to the Effective Date,
which interim financial statements shall be prepared in a manner consistent with
the policies and practices heretofore used by Amedisys in the preparation of its
interim financial statements.
4.9 Employee Matters. Seller acknowledges that Buyer has made no
commitment to hire any employees of Seller on or after the Closing and, except
for any obligations to employees included in the Assumed Liabilities, Seller
shall be responsible for any liabilities to such employees. Seller will assist
Buyer in any attempts by Buyer to employ the current employees of the Surgery
Centers, as reasonably requested by Buyer, and to transition such employees to
the welfare and benefit programs offered by Buyer to its employees. Buyer will
notify Amedisys at least one week prior to the Closing of any such current
employees that will not be hired by Buyer.
4.10 Tail Insurance. Amedisys will obtain "tail" insurance, in form
and substance acceptable to Buyer, to insure against liabilities of the Surgery
Centers relating to all periods prior to the Closing Date to the extent
reasonably required to insure Amedisys and Seller against liability for their
prior acts, the cost thereof to be paid for by Seller. The minimum coverage
under such "tail" insurance shall be at least equivalent to the coverage
historically provided to the Surgery Centers. If such tail insurance has not
been obtained as of the Closing Date, Seller will maintain its existing
professional liability insurance in place until such tail insurance is obtained.
4.11 Title Commitment and Survey.
4.11.1 Delivery of Title Commitment. Prior to the Closing, Amedisys
shall deliver or cause to be delivered to Buyer (a) a current commitment for
ALTA Owner's Policy of Title Insurance for the Pasadena Real Property (the
"Title Commitment") issued by Stewart Title Insurance Company (the "Title
Company"), whereby the Title Company commits to issue an ALTA Owner's Policy of
Title Insurance written in accordance with this Agreement; and (b) all copies of
all instruments shown as deceptions on the Title Commitment.
4.11.2 Terms of Title Commitment. The Title Commitment shall: (a)
describe the Pasadena Real Property and such legal description, unless modified
by the survey provided for in Section 4.11.3 below, shall be incorporated into
this Agreement as Schedule
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1.1.10 and shall be used in all closing documents; (b) list the Pasadena
Partnership as the prospective named insured; and (c) show as the policy amount
the portion of the Purchase Price allocated to the Pasadena Real Property in
Schedule 1.6 hereto. With regard to the standard printed exceptions and other
common exceptions generally included in title commitments: (i) the exception for
restrictive covenants shall read either "None of record" or "None of record
except..."; (ii) the exception for area and boundaries shall be deleted except
for "Shortages in Area"; (iii) the exception for ad valorem taxes shall reflect
only taxes for the current year and shall read "not yet due and payable"; and
(iv) the exception for "rights of parties in possession" shall be deleted.
4.11.3 Survey. Prior to the Closing, Amedisys shall deliver or cause
to be delivered to Buyer and the Title Company a current stake survey for the
Pasadena Real Property, prepared by a licensed engineer or surveyor that is
mutually approved by Buyer and Amedisys, which shall: (a) include a legal
description of the subject land; (b) accurately show all improvements,
encroachments, uses and encumbrances listed on the applicable Title Commitment
(identifying each by volume and page reference, if applicable); and (c) contain
a certificate verifying that the survey was made on the ground, that the survey
is correct, that there are no improvements, encroachments or uses except as
shown on the survey plat and that the area represented for the subject land has
been certified by the survey as being correct.
4.11.4 Phase One Report. Prior to the Closing, Amedisys shall
deliver or cause to be delivered to Buyer a "phase one" environmental report
regarding the Pasadena Real Property, prepared by an engineering firm that is
mutually approved by Buyer and Amedisys, which shows no indication of Hazardous
Materials on or under the Pasadena Real Property.
4.11.5 Review and Acceptance of Exceptions. Buyer shall have the
right to review and approve the Title Commitment and survey. Any title
encumbrances set forth in such documents to which Buyer does not object prior to
the Closing shall be deemed to be accepted by Buyer, except that in any event
the First Mortgage must be removed. With regard to items to which Buyer
objects, Amedisys shall have 10 days from notice of such objections within which
to cure same. Amedisys shall use commercially reasonable efforts to cure such
objections. If Amedisys fails to cure any such objection within said 10 day
period, Buyer either may (i) terminate this Agreement with respect to all of the
Purchased Assets, and thereafter the parties hereto shall be relieved of any
further obligation and, except for the provisions of Sections 4.3 and 4.11.6,
this Agreement null and void and of no further force or effect, or (ii) waive
any one or more of such exceptions and close this transaction and take an
Owner's Policy of Title Insurance subject to such waived non-approved
exceptions.
4.11.6 Expenses. Buyer and Amedisys shall each pay 50% of all costs,
fees and disbursements of or relating to obtaining the Title Commitment, the
survey and the environmental report required this Section 4.11 and the title
insurance policy required by Section 5.6. Buyer and Amedisys shall obtain
estimates of these costs prior to incurring the costs.
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ARTICLE 5
CONDITIONS TO THE OBLIGATIONS OF BUYER
The obligation of Buyer to cause the Partnerships to purchase the
Purchased Assets shall be subject to the fulfillment at or prior to the Closing
Date of each of the following conditions:
5.1 Accuracy of Representations and Warranties and Compliance with
Obligations. The representations and warranties of Seller and Amedisys
contained in this Agreement shall be true and correct in all material respects
on and as of the Closing Date, with the same force and effect as though made at
and as of that time. Seller and Amedisys shall have performed and complied with
all of their obligations required by this Agreement to be performed or complied
with at or prior to the Closing Date. Amedisys shall have delivered to Buyer a
certificate, dated as of the Closing Date and signed by a duly authorized
officer or officers of Seller and Amedisys, certifying (a) that such
representations and warranties are true and correct and that all such
obligations have been performed and complied with and (b) as to all resolutions
of the members and managers of Seller and of the board of directors of Amedisys
relating to this Agreement and the transactions contemplated hereby.
5.2 Receipt of Necessary Consents and Governmental Permits. All
necessary consents or approvals of third parties to each of the transactions
contemplated hereby, the absence of which would materially affect Buyer's rights
hereunder, shall have been obtained and shown by written evidence reasonably
satisfactory to Buyer, including without limitation (a) the consent of Landlord
with respect to the South Houston Partnership's assumption of the South Houston
Lease and (b) evidence reasonably satisfactory to Buyer that all of the assets
that are covered by the equipment leases with DVI referred to in Section 1.3(a)
have been transferred to Seller free and clear of all liens, claims and
encumbrances. The Partnerships shall also have obtained all licenses,
certificates, permits and rulings of, and made all notices to, all governmental
authorities (and any waiting periods shall have expired in connection therewith)
that may be required in connection with the acquisition of the Purchased Assets
and the continuation of the operation of the businesses of the Surgery Centers
by the Partnerships following the Closing.
5.3 No Adverse Litigation. There shall not be pending or threatened
any action or proceeding by or before any court or other governmental body which
shall seek to restrain, prohibit or invalidate the sale of the Purchased Assets
to the Partnerships or any other transaction contemplated hereby, or which might
affect the right of Buyer to own the Purchased Assets or to control the
Partnership.
5.4 Material Changes. No Surgery Center shall have suffered any
change, loss or damage since the Balance Sheet Date which materially and
adversely affects or impairs the operations or prospects of such Surgery Center.
5.5 Deed and Bill of Sale. Seller shall have executed and delivered
to Buyer Bills of Sale and Assumptions of Liabilities transferring title to the
Purchased Assets to the
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respective Partnerships, which Bills of Sale and Assumptions of Liabilities
shall be substantially in the form attached hereto as Exhibit A. Seller shall
also have executed and delivered a Warranty Deed to the Partnership, which
Warranty Deed shall be in the form attached hereto as Exhibit B.
5.6 Title Insurance. The Pasadena Partnership shall have received an
ALTA Owner's Policy of Title Insurance covering the Pasadena Real Property
issued by the Title Company in accordance with the terms of Section 4.11 above
and containing no exceptions other than the exceptions accepted by Buyer (or as
to which Buyer has waived acceptance) pursuant to Section 4.11.
5.7 Good Standing Certificate. Seller shall have delivered to Buyer
good standing certificates or certificates of existence issued by the Secretary
of State of the State of Texas (as to Seller) and of the State of Delaware (as
to Amedisys), which are dated no more than 20 business days prior to the Closing
Date and which reflect the good standing or valid existence of Seller and
Amedisys.
5.8 Incumbency Certificate. Amedisys shall have delivered a
certificate of incumbency of each manager and officer of Seller or Amedisys who
executes documents, instruments and agreements on behalf of Seller or Amedisys
pursuant hereto.
5.9 Tail Insurance Coverage. Amedisys shall have obtained (at its
expense) "tail" or "prior acts" malpractice insurance coverage for any potential
claims for pre-Closing Date business conducted by Seller or shall have continued
its current professional liability insurance, as described in Section 4.10.
5.10 Satisfactory Completion of Due Diligence. Buyer shall have
completed its due diligence investigation of the prospects, business, assets,
contracts, rights, liabilities and obligations of the Surgery Centers, including
financial, marketing, medical staff, employee, legal, regulatory and
environmental matters to its satisfaction. Buyer shall be under no obligation
to continue with its due diligence investigation or to consummate the Closing
if, at any time, the results of its due diligence investigation are not
satisfactory to Buyer for any reason in its sole discretion.
5.11 Board Approval. This Agreement and the transactions provided
for herein shall have been approved by the board of directors of Buyer.
ARTICLE 6
CONDITIONS TO THE OBLIGATIONS OF SELLER
The obligation of Seller to sell the Purchased Assets shall be subject
to the fulfillment at or prior to the Closing Date of each of the following
conditions:
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6.1 Accuracy of Representations and Warranties and Compliance with
Obligations. The representations and warranties of Buyer contained in this
Agreement shall be true and correct in all material respects at and as of the
Closing Date, with the same force and effect as though made at and as of that
time. Buyer shall have performed and complied with all of its obligations
required by this Agreement to be performed or complied with at or prior to the
Closing Date. Buyer shall have delivered to Amedisys a certificate, dated as of
the Closing Date and signed by a duly authorized officer of Buyer, certifying
that such representations and warranties are true and correct and that all such
obligations have been performed and complied with.
6.2 No Adverse Litigation. There shall not be pending or threatened
any action or proceeding by or before any court or other governmental body which
shall seek to restrain, prohibit or invalidate the sale of the Purchased Assets
to Buyer or any other transaction contemplated hereby.
6.3 Payment of Purchase Price. Buyer shall have paid the Purchase
Price, including the execution and delivery of a Promissory Note in the form of
Exhibit C, as provided in Section 1.3, and each Partnership shall have executed
and delivered to Seller a Bill of Sale and Assumption of Liabilities as
described in Section 5.5.
6.4 Good Standing Certificate. Buyer shall have delivered a good
standing certificate or certificate of existence issued by the Secretary of
State of the State of Delaware which is dated no more than 20 business days
prior to the Closing Date and which reflects the good standing or valid
existence of Buyer.
6.5 Incumbency Certificate. Buyer shall have delivered a certificate
of incumbency of all officers of Buyer who are executing documents or
instruments and agreements on behalf of Buyer pursuant hereto.
ARTICLE 7
CERTAIN POST-CLOSING COVENANTS
7.1 Post-Closing Accounting. Within 45 days after the Closing Date,
Buyer shall prepare and submit to Amedisys an unaudited balance sheet and any
other appropriate statements (collectively, the "Working Capital Statement")
necessary to establish the Combined Working Capital of the Surgery Centers at
the Effective Date. Such Working Capital Statement shall be deemed accepted by
Amedisys unless Amedisys provides Buyer with written notice of any objections
(including a description of such objections) within 30 days after Amedisys'
receipt of the Working Capital Statement. If such written notice of any
objection is given to Buyer, then Amedisys and Buyer shall use their best
efforts to resolve such disagreement. If they are unable to resolve such
disagreement within 30 days after such written notice of objection is given, the
dispute shall be submitted to KPMG Peat Marwick LLP acting as an expert and not
as an arbitrator, for final determination, which shall be binding on the parties
hereto, within 30 days after such matter is submitted to such firm. The fees
charged by KPMG Peat Marwick LLP in
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connection with such determination, which shall be billed separately and
independently from any other services provided by such firm, shall be paid 50%
by Buyer and 50% by Amedisys; provided, however, that if such firm's final
determination of the Effective Date Combined Working Capital is within $25,000
of the calculation submitted by either Buyer or Amedisys (but not within $25,000
of the estimate submitted by both Buyer and Amedisys), then the party whose
calculation was more than $25,000 from such final determination shall pay all
such fees. If the final Working Capital Statement indicates that the actual
Purchase Price payable at the Closing is more than the amount paid at the
Closing in accordance with Section 1.3.1, Buyer shall pay to Seller the amount
of such increase in the Purchase Price within 10 days of such final
determination. If, however, the final Working Capital Statement indicates that
such actual Purchase Price is less than the amount so paid at the Closing, the
amount of such shortfall shall be paid to Buyer by Amedisys within 10 days of
such final determination.
7.2 Execution of Further Documents. From and after the Closing, upon
the reasonable request of Buyer, Seller and Amedisys shall execute, acknowledge
and deliver all such further assignments, conveyances, powers of attorney and
other assurances as may be required to transfer to and vest in Buyer and the
Partnerships, and to protect their respective right, title and interest in, the
Purchased Assets and all of their rights, title and interests in any of the
leases and contracts set forth on Schedules 1.1.4 and 1.1.5 for which consents
to the assignment are to be obtained subsequent to the Closing.
7.3 Guaranty of Financial Obligations. The parties hereto
acknowledge and agree that Buyer intends to assign its rights and obligations
hereunder to the Partnerships. Notwithstanding such assignment, Buyer shall
remain responsible for all obligations of Buyer and the Partnerships set forth
in this Agreement, other than the obligations of the South Houston Partnership
under the South Houston Lease (which shall be the sole obligations of the South
Houston Partnership). Likewise, Amedisys shall be responsible for all
obligations of Seller set forth in this Agreement. This Section 7.3 shall
survive the Closing.
7.4 Termination of Employee Participation in 401(k) Plan. Amedisys
agrees that, to the extent allowed by applicable laws and regulations, as soon
as practicable following the Closing, at Amedisys' expense, it will take all
steps and make all filings necessary or appropriate in order to terminate the
participation of the Surgery Centers' former employees in the 401(k) Plan
referred to in Schedule 2 (referencing Section 2.22) (the "Plan"), and Seller
and Amedisys shall take any and all corporate action necessary to authorize and
direct the administrator of the Plan to take such actions. Amedisys shall be
solely responsible for any unfunded or underfunded obligations of Seller to the
Plan or any beneficiary thereof. Buyer agrees to use its commercially
reasonable efforts to facilitate the rollover of any and all funds and accounts
held for the beneficiaries of the Plan who voluntarily elect to make such
rollovers into one or more of the pension and/or profit sharing plans maintained
by Buyer or its affiliates, as and to the extent such rollovers are permissible
under applicable laws and regulations and the terms of Buyer's plans.
7.5 Delivery of Collections Received by Seller After Closing. From
and after the Closing, Buyer shall have the right and authority to collect, for
the account of the
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Partnerships, all Receivables and other items that are intended to be
transferred to the Partnership as part of the Purchased Assets as provided in
this Agreement (including without limitation any portion of the Receivables that
are proceeds of accounts receivable outstanding at the Effective Date under the
Medicare, Medicaid or other governmental program), and to endorse with the name
of Seller any checks or drafts received on account of any such Receivables or
other items of the Purchased Assets. Amedisys and Seller each agrees that it
will transfer or deliver to Buyer (for the account of the respective
Partnerships), promptly after the receipt thereof, any cash or other property
which Seller or Amedisys receives after the Closing Date in respect of any
claims, contracts, licenses, leases, commitments, sales orders, purchase orders,
Receivables of any character or any other items transferred or intended to be
transferred to a Partnership as part of the Purchased Assets under this
Agreement.
7.6 Buyer Appointed Attorney for Seller. Effective at the Closing
Date, Seller hereby constitutes and appoints Buyer, its successors and assigns,
the true and lawful attorney of Seller, in the name of either Buyer or Seller
(as Buyer shall determine in its sole discretion) but for the benefit and at the
expense of the Partnerships (except as otherwise herein provided): (a) to
institute and prosecute all proceedings which Buyer may deem proper in order to
collect, assert or enforce any claim, right or title of any kind in or to the
Purchased Assets as provided for in this Agreement; (b) to defend or compromise
any and all actions, suits or proceedings in respect of any of the Purchased
Assets, and to do all such acts and things in relation thereto as Buyer shall
deem advisable; and (c) to take all action which Buyer may reasonably deem
proper in order to provide for the Partnership the benefits of any of the
Purchased Assets where any required consent of another party to the sale or
assignment thereof to the Partnership pursuant to this Agreement shall not have
been obtained. Seller acknowledges that the foregoing powers are coupled with
an interest and shall be irrevocable. Buyer shall be entitled to retain for the
account of the Partnerships any amounts collected pursuant to the foregoing
powers, including any amounts payable as interest in respect thereof.
7.7 Record Retention. After the Closing (at reasonable times and on
reasonable notice), Buyer shall permit Amedisys (a) to have access to the
Records for purposes of preparing its tax returns, or as needed to defend
Amedisys or Seller in any judicial or administrative actions and (b) to make
copies of such Records at Amedisys' cost and expense. Buyer shall retain the
Records in accordance with its internal record retention policy, which policy
shall be consistent with applicable industry standards.
7.8 Sales Taxes and Other Governmental Charges. Amedisys shall be
responsible for all sales taxes, documentary stamps, transfer taxes, recording
fees and similar governmental charges incurred by any party or a Partnership in
connection with the transactions contemplated by this Agreement. The parties do
not anticipate any significant taxes, fees or charges of this type.
7.9 Transition Services. In consideration of the covenants and
agreements of (and without additional charge to) Buyer, Amedisys and Seller
shall provide the following services to Buyer and the Partnerships during a
transition period following the Closing Date, which shall in no event exceed
nine months:
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7.9.1 Until such time as Buyer has implemented its proposed new
accounts payable system, Amedisys and Seller shall continue to handle the
accounts payable for the Surgery Centers using the existing accounts payable
system, provided that neither Amedisys nor Seller shall have any obligation to
pay any account payable unless funds for such payment are provided to Seller or
Amedisys by Buyer or a Partnership.
7.9.2 Amedisys and Seller shall provide Buyer with any information in
their possession relating to the Surgery Centers that is reasonably requested by
Buyer in connection with the transition to Buyer's proposed new accounts payable
system.
7.9.3 The Amedisys and Seller management personnel previously
involved in the operations of and/or accounting for the Surgery Centers shall
provide such consulting and similar services as may be reasonably requested by
Buyer in connection with the transition of management and control of the Surgery
Centers from Seller to the Partnerships.
ARTICLE 8
INDEMNIFICATION
8.1 Agreement by Seller and Amedisys to Indemnify. Seller and
Amedisys each agrees that it will indemnify and hold Buyer and the Partnerships
harmless in respect of all "Indemnifiable Damages" (as hereinafter defined).
For this purpose, Indemnifiable Damages shall mean any and all expenses, losses,
costs, deficiencies, liabilities and damages (including related attorneys' fees
and expenses) incurred or suffered by Buyer or a Partnership (a) resulting from
any material breach of any representation or warranty made by Seller or Amedisys
in this Agreement, (b) resulting from any material breach in the performance of
any of the covenants or agreements made by Seller or Amedisys in this Agreement
or (c) arising from any liability or obligation of Seller or Amedisys that is
not an Assumed Liability. Without limiting the generality of the foregoing,
with respect to the measurement of Indemnifiable Damages, Buyer shall have the
right to be put in the same financial position as it would have been in had each
of the representations and warranties of Seller and Amedisys been true and
correct and had each of the covenants of Seller and Amedisys been performed in
full. The foregoing obligation to indemnify Buyer and the Partnerships shall be
subject to each of the following limitations, principles and qualifications:
8.1.1 Each of the representations and warranties made by Seller and
Amedisys in this Agreement or pursuant hereto shall survive for a period of
three years after the Closing Date, notwithstanding any investigation at any
time made by or on behalf of Buyer, and thereafter all such representations and
warranties shall be extinguished; provided, however, that the representations
and warranties made by Seller and Amedisys in Sections 2.1, 2.2, 2.20, 2.22 and
2.25 shall in each case survive forever and those made in Section 2.6 shall in
each case survive until 30 days after the date on which the applicable period of
limitation on assessment or refund of tax has expired. No claim for the
recovery of Indemnifiable Damages based upon a material breach of any such
representations and warranties may be asserted by Buyer after such
representations and warranties shall be thus extinguished; provided, however,
that claims first
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asserted in writing within the applicable period (whether or not the amount of
any such claim has become ascertainable within such period) shall not thereafter
be barred. This Section 8.1.1 shall not apply to the indemnity obligations of
Seller and Amedisys under Section 8.1(c).
8.1.2 Buyer agrees to use its best efforts to give prompt written
notice to Amedisys of each claim for Indemnifiable Damages which it believes it
has suffered; provided, however, that no delay in the giving of such notice
shall affect the rights of Buyer to recover Indemnifiable Damages hereunder.
Upon receipt of such notice, Amedisys shall have the right to assume the
defense of any such claim through counsel selected by the indemnifying party and
approved by Buyer (which approval shall not be unreasonably withheld), and the
assertion of such right shall constitute an acknowledgment by the indemnifying
party that such claim is an indemnifiable claim for which such indemnifying
party is responsible under this Section 8.1. If Amedisys does not assume any
such defense, Seller and Amedisys shall be liable for all costs and expenses of
defending such claim (if it is a valid claim for Indemnifiable Damages),
including reasonable fees and disbursements of counsel. In the event, after
having first provided Amedisys an opportunity to fulfill its obligations to
Buyer hereunder, Buyer then brings an action against Seller or Amedisys upon any
claim under this Section, Seller and Amedisys shall be jointly and severally
liable to Buyer for Buyer's reasonable fees and disbursements of counsel in
connection therewith if Buyer prevails in the action.
8.1.3 If the Closing occurs, the parties hereto acknowledge and agree
that Buyer's sole and exclusive remedy for any misrepresentation, breach of
warranty or covenant made under this Agreement or otherwise for any claim of
liability in connection with the transactions contemplated by this Agreement
shall be the indemnification set forth in this Section 8.1.
8.1.4 Notwithstanding anything to the contrary in the foregoing
provisions of this Section 8.1, (a) Buyer shall have no claim for Indemnifiable
Damages under Section 8.1(a) until the aggregate amount of such Indemnifiable
Damages equals or exceeds $25,000, in which event the claim for such
Indemnifiable Damages shall be for the full amount thereof (including the
initial $25,000) and (b) the maximum aggregate liability of Amedisys and Seller
for Indemnifiable Damages shall be an amount equal to the Purchase Price.
8.2 Agreement by Buyer to Indemnify. Buyer agrees that it will
indemnify and hold Seller and Amedisys harmless in respect of all Indemnifiable
Damages (as hereinafter defined). For this purpose, Indemnifiable Damages shall
mean any and all expenses, losses, costs, deficiencies, liabilities and damages
(including related attorneys' fees and expenses) incurred or suffered by Seller
or Amedisys (a) resulting from any material breach of any representation or
warranty made by Buyer in this Agreement, (b) resulting from any material breach
in the performance of any of the covenants or agreements made by Buyer in this
Agreement or (c) arising from the Assumed Liabilities (other than the South
Houston Lease, which shall be the sole responsibility of the South Houston
Partnership). Without limiting the generality of the foregoing, with respect to
the measurement of Indemnifiable Damages, Seller and Amedisys shall have the
right to be put in the same financial position as they would have been in had
each of the representations and warranties of Buyer been true and correct and
had
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each of the covenants of Buyer been performed in full. The foregoing obligation
to indemnify Seller and Amedisys shall be subject to each of the following
limitations, principles and qualifications:
8.2.1 Each of the representations and warranties made by Buyer in
this Agreement or pursuant hereto shall survive for a period of three years
after the Closing Date, notwithstanding any investigation at any time made by or
on behalf of Seller or Amedisys, and thereafter all such representations and
warranties shall be extinguished; provided, however, that the representations
and warranties made by Buyer in Sections 3.1, 3.2 and 3.3 shall in each case
survive forever. No claim for the recovery of Indemnifiable Damages based upon
a material breach of any such representations and warranties may be asserted by
Seller or Amedisys after such representations and warranties shall be thus
extinguished; provided, however, that claims first asserted in writing within
the applicable period (whether or not the amount of any such claim has become
ascertainable within such period) shall not thereafter be barred. This Section
8.2.1 shall not apply to the indemnity obligations of Buyer under Section
8.2(c).
8.2.2 Seller and Amedisys each agrees to use their best efforts to
give prompt written notice to Buyer of each claim for Indemnifiable Damages
which they believe they have suffered; provided, however, that no delay in the
giving of such notice shall affect the rights of Seller or Amedisys to recover
Indemnifiable Damages hereunder. Upon receipt of such notice, Buyer shall have
the right to assume the defense of any such claim through counsel selected by
Buyer and approved by Amedisys (which approval shall not be unreasonably
withheld), and the assertion of such right shall constitute an acknowledgment by
Buyer that such claim is an indemnifiable claim for which Buyer is responsible
under this Section 8.2. If Buyer does not assume any such defense, it shall be
liable for all costs and expenses of defending such claim (if it is a valid
claim for Indemnifiable Damages), including reasonable fees and disbursements of
counsel. In the event, after having first provided Buyer an opportunity to
fulfill its obligations to Seller and Amedisys hereunder, Seller or Amedisys
then brings an action against Buyer upon any claim under this Section, Buyer
shall be liable to Seller and Amedisys for their reasonable fees and
disbursements of counsel in connection therewith if Seller or Amedisys prevails
in the action.
ARTICLE 9
MISCELLANEOUS
9.1 Amendment and Modification. The parties hereto may amend, modify
and supplement this Agreement in such manner as may be agreed upon by them in
writing.
9.2 Assignment by Buyer. Amedisys and Seller acknowledge and agree
that Buyer shall have the right to assign and delegate any of its rights and
obligations under this Agreement to the Partnerships without their prior
consent. No such assignment or delegation by Buyer to a Partnership shall limit
or release Buyer with respect to its obligations under this Agreement, which
shall remain in full force and effect notwithstanding such assignment or
delegation.
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9.3 Termination.
9.3.1 Anything to the contrary herein notwithstanding, this Agreement
may be terminated prior to the Closing and the transactions contemplated hereby
may be abandoned:
9.3.1.1 by the mutual written consent of all of the parties
hereto;
9.3.1.2 by action of the board of directors of Buyer or Amedisys
if a federal or state court of competent jurisdiction or federal or state
governmental, regulatory or administrative agency or commission shall have
issued an order, decree or ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the transactions
contemplated this Agreement, and such order, decree, ruling or other action
shall have become final and nonappealable; provided that the party seeking
to terminate this Agreement pursuant to this Section 9.3.1.2 shall have
used all reasonable efforts to remove such injunction, order or decree;
9.3.1.3 by action of the board of directors of Amedisys if (a)
there has been a material breach by Buyer of any representation or warranty
contained in this Agreement which has or is likely to have a material
adverse effect upon Amedisys or (b) there has been a material breach of any
of the covenants or agreements set forth in this Agreement on the part of
Buyer, which breach is not curable or, if curable, is not cured within five
days after written notice of such breach is given by Amedisys to Buyer;
9.3.1.4 by the board of directors of Buyer if (a) there has been
a material breach by Amedisys or Seller of any of their representations or
warranties contained in this Agreement which has or is reasonably likely to
have a material adverse effect upon Buyer or a Partnership or (b) there has
been a material breach of any of the covenants or agreements set forth in
this Agreement on the part of Amedisys or Seller, which breach is not
curable, or if curable, is not cured within five days after written notice
of such breach is given by Buyer to Amedisys; and
9.3.1.5. by any party hereto if the Closing has not taken place,
through no fault or breach by such party, by September 3, 1999.
9.3.2. In the event of termination of this Agreement and the
abandonment of the transactions contemplated hereby pursuant to this Section
9.3, all obligations of the parties hereto shall terminate; provided, however,
that in the event this Agreement is terminated pursuant to subsection 9.3.1.3 or
9.3.1.4 above, the non-breaching party shall have the right to pursue all rights
and remedies resulting from the breach.
9.3.3 Except as otherwise provided herein, the risk of any loss to
the assets and properties of Seller and all liability with respect to injury and
damage occurring in connection therewith shall be the sole responsibility of
Seller until the time of the Closing.
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9.4 Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors, assigns,
heirs and legal representatives. All of the terms, provisions, covenants,
representations, warranties and conditions of this Agreement shall survive the
Closing and shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto and their respective successors and assigns. The failure
of any party at any time or times to require performance of any provision hereof
shall in no manner affect the right to enforce the same. No waiver by any party
of any condition, or of the breach of any term, provision, covenant,
representation or warranty contained in this Agreement, whether by conduct or
otherwise, in any one or more instances, shall be deemed to be or construed as a
further or continuing waiver of any such condition or breach or a waiver of any
other condition or of the breach of any other term, provision, covenant,
representation or warranty. This Agreement is for the sole benefit of the
undersigned parties hereto and is not for the benefit of any third party.
9.5 Entire Agreement. This Agreement and the Exhibits and Schedules
attached hereto contain the entire agreement of the parties hereto with respect
to the purchase of the Purchased Assets and the other transactions contemplated
herein and supersede all prior verbal or written understandings and agreements
of the parties with respect to the subject matter hereof, including without
limitation the Term Sheet executed on July 2, 1999 by Buyer and Amedisys. Any
reference herein to this Agreement shall be deemed to include the Schedules and
Exhibits attached hereto.
9.6 Headings. The descriptive headings in this Agreement are inserted
for convenience only and do not constitute a part of this Agreement.
9.7 Execution in Counterpart. Separate copies of this Agreement may
be signed by the parties hereto, with the same effect as though all of the
parties had signed one copy of this Agreement. Signatures received by
facsimile shall be accepted as original signatures.
9.8 Notices. Any notice, request, information or other document to
be given hereunder shall be in writing and shall be deemed duly given three
business days after it is sent by registered or certified mail, postage prepaid,
to the intended recipient, addressed as follows:
If to Seller or Amedisys:
c/o Amedisys, Inc.
3029 South Sherwood Forest Blvd., Suite 300
Baton Rouge, Louisiana 70816
Attention: Larry Graham, Chief Operating Officer
FAX No.: (225) 292-8163
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If to Buyer:
United Surgical Partners International, Inc.
17103 Preston Road, Suite 200 North
Dallas, Texas 75248
Attention: Donald E. Steen
FAX No.: (972) 267-0084
with a copy to:
Robert D. Mosher
Nossaman, Guthner, Knox & Elliott, LLP
445 South Figueroa Street, 31st Floor
Los Angeles, California 90071-1602
FAX No.: (213) 612-7801
Any party may send any notice, request, information or other document to be
given hereunder using any other means (including personal delivery, courier,
messenger service, facsimile transmission (to the facsimile numbers set forth
above), telex or ordinary mail), but no such notice, request, information or
other document shall be deemed duly given unless and until it is actually
received by the party for whom it is intended. Any party may change the address
or facsimile number to which notices hereunder are to be sent to it by giving
written notice of such change of address in the manner herein provided for
giving notice.
9.9 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas applicable to contracts made
and to be performed therein.
9.10 Interpretation of Agreement. The parties hereto acknowledge and
agree that this Agreement has been negotiated at arm's length and between
parties equally sophisticated and knowledgeable in the matters dealt with in
this Agreement. Accordingly, any rule of law or legal decision that would
require interpretation of any ambiguities in this Agreement against the party
that has drafted it is not applicable and is waived. The provisions of this
Agreement shall be interpreted in a reasonable manner to effect the intent of
the parties as set forth in this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Asset Purchase
Agreement to be duly executed as of the day and year first above written.
UNITED SURGICAL
PARTNERS INTERNATIONAL, INC.
By /s/ Michael W. Crews
-----------------------------
Michael W. Crews
Vice President
AMEDISYS, INC.
By /s/ Larry R. Graham
-------------------------------
Name Larry R. Graham
-----------------------------
Title COO
----------------------------
AMEDISYS SURGERY CENTERS, L.C.
By /s/ Larry R. Graham
-------------------------------
Name Larry R. Graham
-----------------------------
Title Vice President
----------------------------
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Exhibit 2.2(i)
PROMISSORY NOTE
$300,000 September 1, 1999
Dallas, Texas
FOR VALUE RECEIVED, the undersigned, United Surgical Partners
International, Inc., a Delaware corporation ("Maker"), hereby promises to pay
to the order of Amedisys Surgery Centers, L.C., a Texas limited liability
company ("Holder"), at 3029 South Sherwood Forest Blvd., Suite 300, Baton Rouge,
Louisiana 70816, or such other place as Holder may from time to time designate,
the principal sum of $300,000, together with interest on all principal amounts
outstanding from time to time at a rate of 10% per annum (determined on the
basis of a 365 day year). The principal of this Promissory Note ("Note") shall
be due and payable in three equal installments of $100,000 each on October 1,
1999, November 1, 1999 and December 1, 1999; all accrued but unpaid interest
shall be due and payable concurrently with each such principal payment.
All payments of principal and interest on this Note are payable in
lawful money of the United States of America. Each payment shall be credited
first on interest then due and the remainder (if any) on principal, and interest
shall thereupon cease upon the principal so credited. Maker may prepay the
principal sum of this Note in full at any time prior to maturity by paying the
principal sum and all interest accrued thereon to the date of payment.
Upon default of any of Maker's obligations hereunder, which default
continues without being cured for three days after the due date, Holder shall
have the right, at its sole option and without notice or demand (and in addition
to any other rights otherwise available to Holder under any applicable law), to
declare the unpaid balance of principal and accrued interest at once due and
payable, whereupon the outstanding principal balance of this Note shall bear
interest at 12% per annum or the maximum rate permitted by applicable law,
whichever is less, until such principal is paid in full.
If, after default, this Note is placed in the hands of an attorney for
collection, or is collected in whole or in part through judicial or non-judicial
proceedings, Maker shall pay, in addition to the sums referred to above,
reasonable attorneys' fees and all other reasonable costs incurred by Holder in
connection with the collection of the unpaid amounts due hereunder.
Holder does not intend to contract for, charge or receive any interest
or other charge which is usurious, and by execution of this Note, Maker
acknowledges that Holder has no such intent. All agreements between Maker and
Holder, whether now existing or hereafter arising and whether written or oral,
are hereby expressly limited so that in no event, whether by reason of
acceleration of the maturity hereof, or otherwise, shall the amount paid or
agreed to be paid to Holder for the use, forbearance or detention of the money
to be loaned hereunder or
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otherwise or for the payment or performance of any covenant or obligation
contained herein or in any other document evidencing, securing or pertaining to
the indebtedness evidenced hereby, exceed the maximum amount permissible under
applicable law. If from any circumstance whatsoever fulfillment of any provision
hereof or other documents, at the time performance of such provision shall be
due, shall exceed the maximum amount prescribed by law, then, ipso facto, the
obligations to be fulfilled shall be reduced to the limit of such validity, and
if from any such circumstance Holder shall ever receive as interest or otherwise
an amount which would exceed the highest lawful rate, such amount which would be
excessive interest shall be applied to reduce the principal amount owing
hereunder or on account of any other principal indebtedness of Maker to Holder
and not to the payment of interest, or if such excessive interest exceeds the
unpaid balance of principal hereof and such other indebtedness, such excess
shall be refunded to Maker. All sums paid or agreed to be paid to Holder for the
use, forbearance or detention of the indebtedness of Maker to Holder shall, to
the extent permitted by applicable law, be amortized, prorated, allocated and
spread throughout the full term of such indebtedness until payment in full so
that the actual rate of interest on account of such indebtedness does not exceed
the maximum permitted by applicable law.
This Note shall be governed by and construed in accordance with Texas
law and applicable federal law. The terms, provisions, covenants and conditions
hereof shall be binding upon Maker and its successors and assigns and shall
inure to the benefit of Holder and its successors and assigns. If any one or
more of the provisions of this Note, or the applicability of any such provision
to a specific situation, shall be held invalid or unenforceable, such provision
shall be modified to the minimum extent necessary to make it or its application
valid and enforceable, and the validity and enforceability of all other
provisions of this Note and all other applications of any such provision shall
not be affected thereby.
IN WITNESS WHEREOF, Maker has duly executed this Promissory Note as of
the date first above written.
UNITED SURGICAL PARTNERS
INTERNATIONAL, INC.
By /s/ James K. Lines
--------------------------------
Name James K. Lines
--------------------------------
Title Executive Vice President
--------------------------------
2
