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EXHIBIT 10.18
[LOGO]
Acquisition
Management
Services, Inc.
September 18, 1996
PERSONAL & CONFIDENTIAL
Xxxxx X. New
President
AmeriPath, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxx 00000
Dear Xxx:
This is to confirm our understanding (as described below) that Acquisition
Management Services, Inc. ("AMS") has been engaged as an advisor and consultant
to AmeriPath, Inc. (the "Company") to assist the Company by providing certain
advisory services. This Agreement shall be in effect from the date of execution
and may be extended to cover additional services with the written consent of
both parties for such periods as the parties may agree. The terms of this
Engagement Agreement will expire thirty (30) days from the date hereof unless
accepted by the Company in writing by executing and delivering to AMS the
final page of this Agreement. This Agreement will be the entire understanding
of the parties with respect to its subject matter, except for the provisions
contained in the letter from AMS to the Company (dated May 22, 1996) regarding
the amount of compensation and the time frame for completion of assignments.
A. ADVISORY SERVICES
The Company hereby retains AMS to perform human resource consulting,
purchase accounting, due diligence, financial analyses, valuations,
projections, strategic analyses and, in consultation with the
Company's management, negotiation of terms with respect to potential
acquisitions by, or other transactions involving, the Company
(the "Services"). For purposes of this Agreement, "due diligence" with
respect to an acquisition target shall include, but not be limited to,
review of (1) contracts, arrangements or other agreements; (2)
ownership structure; (3) organizational structure, including interviews
of officers of key personnel; (4) facilities; (5) insurance policies
and claims histories; (6) litigation matters; (7) tax returns and
related matters; (8) market conditions; and (9) billing practices. AMS
shall prepare appropriate written reports (for use by the Company's
officers and for presentation to the Company's Board of Directors)
documenting the results of the foregoing. AMS shall also prepare, in
consultation with the Company's management, a Memorandum of
Understanding with respect to each potential acquisition for which AMS
provides Services. AMS shall devote such time and attention to these
matters as shall be reasonably requested by the Company or determined
by AMS, in its reasonable discretion, to be necessary or appropriate
for the diligent provision of
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AmeriPath, Inc.
Page 2
the Services. All Services shall be rendered by AMS in King of
Prussia, PA, unless otherwise determined by AMS and the Company. AMS
will be compensated for the Services in accordance with the schedule
set forth in Exhibit I.
AMS shall provide the Company with the Services as described
above, and as are otherwise reasonably requested by the Company,
provided that AMS shall not be required to undertake duties not
reasonably within the scope of the Services for which it has been
engaged. In performance of its duties, AMS shall provide the Company
with the benefits of its best judgment and efforts, and shall perform
the Services in a prudent and professional manner. Except for the
foregoing sentence, AMS makes no warranties or representations of any
kind, expressed, implied or statutory, regarding the Services,
including without limitation any representation or warranty as to the
value or quality of the Services. AMS shall be obligated to render
advice, upon the request of the Company in good faith, but shall not be
obligated to spend any specific amount of time in doing so.
The Company acknowledges that AMS and/or its affiliates are in
the business of providing services similar to the Services to others.
Nothing herein shall be construed to limit or restrict AMS in
conducting such business with respect to others or in rendering such
advice to others.
The Company acknowledges and agrees that AMS shall be entitled
to rely on information and instructions supplied by the Company, and
that AMS shall not be liable to the Company (and shall be indemnified
and held harmless by the Company from and against any loss, damage or
liability resulting from) for any action taken at the request of the
Company.
B. RELEASE; LIMITATION OF LIABILITY
The Company, on behalf of itself and its officers, directors,
employees, agents, affiliates, successors and assigns (collectively,
the "Company Affiliates"), does hereby remise, release and forever
discharge AMS, and AMS's officers, directors, employees, agents,
affiliates, predecessors, successors and assigns (collectively, the
"AMS Affiliates", and together with AMS, the "AMS Entities"), of and
from all actions, suits, claims and demands in law or equity, that the
Company or any Company Affiliate ever had, now has, or hereafter may
have, by reason of any claims, demands, actions, or causes of action
for injury, death, loss or damage of any kind or nature whatsoever,
which, either directly or indirectly, arises out of or results from,
the provision of, or the failure to provide, the Services prior to the
date hereof other than the fraud, gross negligence or willful
misconduct on the part of AMS or such AMS Entity. The Company
acknowledges and agrees that neither AMS nor any other AMS Entity shall
be liable to the Company or any Company Affiliate for any liability,
loss or damage relating to, or resulting from the provision of, or
failure to provide, the Services, including but not limited to
consequential or special damages relating to loss of profit or goodwill
or other special or consequential damages, whether or not AMS is
notified of the possibility of such damages, other than liability, loss
or damage resulting from the fraud, gross negligence or willful
misconduct of AMS or such AMS Entity.
The provisions of this Section shall survive the termination of
this Agreement.
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AmeriPath, Inc.
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C. INDEMNIFICATION
Recognizing that transactions and projects of the type contemplated by
the Company sometimes result in litigation and that AMS's role in the
transactions is advisory, the Company and its subsidiaries and
affiliates agree to indemnify and hold harmless AMS and the other AMS
Entities (the "Indemnified Parties") from and against any and all
losses, claims, damages and liabilities, joint or several, related to
or arising in any manner out of any transaction, proposal, consulting
activity or any other matter (collectively, the "Matters") contemplated
by the engagement of AMS hereunder, and will promptly reimburse the
Indemnified Parties for all expenses (including fees and expenses of
legal counsel) as incurred in connection with the investigation of,
preparation for or defense of any pending or threatened claim related
to or arising in any manner out of any Matter contemplated by the
engagement of AMS hereunder, or any action or proceeding arising
therefrom (collectively, "Proceedings"), whether or not such
Indemnified Party is a formal party to any such Proceeding.
Notwithstanding the foregoing, the Company shall not be liable in
respect of any losses, claims, damages, liabilities or expenses that a
court of competent jurisdiction or arbitration shall have determined by
final judgment resulted solely from the fraud, gross negligence or
willful misconduct of an Indemnified Party. The Company further agrees
that it will not, without the prior written consent of AMS, settle,
compromise or consent to the entry of any judgment in any pending or
threatened Proceeding in respect of which indemnification may be sought
hereunder (whether or not AMS or any other Indemnified Party is an
actual or potential party to such Proceeding), unless such settlement,
compromise or consent includes an unconditional release of AMS and each
other Indemnified Party hereunder from all liability arising out of
such Proceeding.
The Company agrees that if any indemnification or reimbursement sought
pursuant to this letter were for any reason not available to any
Indemnified Party or insufficient to hold it harmless as and to the
extent contemplated by this letter, then the Company shall contribute
to the amount paid or payable by such Indemnified Party in respect of
losses, claims, damages and liabilities in such proportion as is
appropriate to reflect the relative benefits to the Company and its
stockholders on the one hand, and AMS on the other, in connection with
the Matters to which such indemnification or reimbursement relates or,
if such allocation is not permitted by applicable law, not only such
relative benefits but also the relative faults of such parties as well
as any other equitable considerations. It is hereby agreed that the
relative benefits to the Company and/or its stockholders and to AMS
with respect to AMS's engagement shall be deemed to be in the same
proportion as (i) the total value paid or received or to be paid or
received by the Company and/or its stockholders pursuant to the Matters
(whether or not consummated) for which AMS is engaged to render
financial, consulting, development or other advisory services bears to
(ii) the fees paid to AMS in connection with such engagement. In no
event shall the Indemnified Parties contribute or otherwise be liable
for an amount in excess of the aggregate amount of fees actually
received by AMS pursuant to such engagement (excluding amounts received
by AMS as reimbursement of expenses and other fixed costs of AMS
required to provide services on an ongoing basis).
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The Company further agrees that no Indemnified Party shall have
any liability (whether direct or indirect, in contract or tort or
otherwise) to the Company for or in connection with AMS's engagement
hereunder except for losses, claims, damages, liabilities or expenses
that a court of competent jurisdiction or arbitration shall have
determined by final judgment resulted solely from the fraud, gross
negligence or willful misconduct of such Indemnified Party. The
indemnity, reimbursement and contribution obligations of the Company
shall be in addition to any liability which the Company may otherwise
have and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the Company
or an Indemnified Party.
The indemnity, reimbursement and contribution provisions set
forth herein shall remain operative and in full force and effect
regardless of (i) any withdrawal, termination or consummation of or
failure to initiate or consummate any Matter referred to herein, (ii)
any investigation made by or on behalf of any party hereto or any
person controlling (within the meaning of Section 15 of the Securities
Act of 1933, as amended, or Section 20 of the Securities Exchange Act
of 1934, as amended) any party hereto, (iii) any termination or the
completion or expiration of AMS's engagement and (iv) whether or not
AMS shall, or shall not be called upon to, render any formal or informal
advice in the course of such activities to which AMS provides services
to the Company. The provisions of this section shall survive the
termination of this agreement.
D. TERMINATION
This Agreement may be terminated by either party at any item, for any
reason, by giving ten (10) days prior written notice.
E. CONFIDENTIAL NATURE OF INFORMATION AND ADVICE
AMS agrees to keep confidential all non-public information
provided to it by the Company or ascertained by it in the course of
providing the Services, except as required by law or as contemplated by
the terms of this Agreement. Notwithstanding anything to the contrary,
AMS may disclose non-public information to their agents and advisors
whenever AMS determines that such disclosure is necessary or advisable
to provide the services contemplated hereunder.
For purposes of this section, "non-public information" shall
not include information which prior to or after AMS's receipt thereof
(i) was or becomes publicly known without disclosure by AMS or (ii)
becomes available to AMS as a result of disclosure by a third party
which represents to AMS (upon which representation AMS is reasonable in
its reliance) that it is or was entitled to disclose such information.
F. COUNTERPARTS
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
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G. ENTIRE AGREEMENT AND GOVERNING LAW
This Agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Pennsylvania, without regard to
principles of conflicts of law.
H. AMENDMENT
This Agreement may not be amended or modified except in writing executed
by the Company and AMS.
I. SURVIVAL
Notwithstanding anything to the contrary contained herein, the
provisions concerning release, confidentiality, indemnification,
compensation and the Company's obligations to pay fees and reimburse
expenses contained in the indemnification provisions shall survive the
expiration or termination of this Agreement.
If the foregoing correctly sets forth the terms of our agreement, kindly so
indicate by signing and returning one copy of this letter.
Very truly yours,
ACQUISITION MANAGEMENT SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
President
Accepted and Agreed
this 19th day of September, 1996
AMERIPATH, INC.
By: /s/ Xxxxx X. New
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Xxxxx X. New
President
