1
EXHIBIT 10.12
EXECUTED DOCUMENT
________________________________________________________________________________
STOCK PURCHASE AGREEMENT
BY AND AMONG
AMERIPATH, INC.,
▇▇▇▇▇▇▇ AND ASSOCIATES PATHOLOGY, P.A.
AND
THE SHAREHOLDERS OF ▇▇▇▇▇▇▇ AND ASSOCIATES PATHOLOGY, P.A.
DATED AS OF MAY 23, 1996
________________________________________________________________________________
2
TABLE OF CONTENTS
PAGE NO.
ARTICLE I
PURCHASE OF CAPITAL STOCK
-------------------------
1.1 Purchase and Sale of Class A Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Purchase and Sale of Class B Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 The Contingent Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND DAP
-----------------------------------------------------
2.1 Corporate Organization, Qualification, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.2 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.3 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.4 Corporate Record Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.5 Title to Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.6 Options and Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.7 Authorization, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.8 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.9 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.10 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.11 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.12 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.13 True and Complete Copies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.14 Title and Related Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.15 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.16 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.17 Compliance with Material Laws and Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.18 ERISA and Related Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.19 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.21 Dealings with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.22 Banking Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.23 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.24 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.25 Investment Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.26 Accounts Receivable; Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.27 Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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2.28 Improper and Other Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.29 Fraud and Abuse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.30 Third-Party Payors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.31 Compliance with Medicare and Medicaid Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.32 Rate Limitations and Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.33 Participation in Audits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.34 Reimbursement Documentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.35 Patient Referrals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.36 Financial Condition at Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.37 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
-----------------------------------------------
3.1 Corporate Organization, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.2 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.3 Authorization, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.4 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.5 Governmental Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.6 Issuance of AmeriPath Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.7 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.8 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.9 Compliance with Material Laws and Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.10 Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE IV
COVENANTS OF DAP AND THE CLASS A SHAREHOLDERS
---------------------------------------------
4.1 Regular Course of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.2 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.3 Capital Changes; Pledges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.4 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.5 Capital and Other Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.6 Cash and Cash Equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.7 Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.8 Other Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.9 Amendments to Charter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.10 Interim Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.11 Full Access and Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.12 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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4.13 Breach of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.14 Fulfillment of Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.15 Purchase Price as Consideration for 100% Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE V
COVENANTS OF THE PURCHASER
--------------------------
5.1 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.2 Full Access and Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE VI
OTHER AGREEMENTS
----------------
6.1 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.2 Agreement to Defend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.3 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.4 No Solicitation or Negotiation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.5 Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.6 No Termination of Sellers' Obligations by Subsequent Incapacity, Etc. . . . . . . . . . . . . . . . . . . . 35
6.7 Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.8 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.9 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.10 DAP Stockholders' Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.11 AmeriPath's Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.12 Deliveries After Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.13 Non-Competition Covenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.14 Non-disclosure; Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.15 Rule 144 Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.16 Post-Closing Merger of Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER
----------------------------------------------
7.1 Representations and Warranties; Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.2 No Injunction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.3 HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.4 Third Party Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.5 Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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7.6 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
7.7 Stock Options and Grant Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
7.8 Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
7.9 Opinion of Seller's Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
7.10 Delivery of DAP Share Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
7.11 Shareholders' Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.12 Creditor Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.13 DAP Charter Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.14 Subordination Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF THE SELLERS
--------------------------------------------
8.1 Representations and Warranties; Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8.2 No Injunction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
8.3 Purchase Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
8.4 Stock Options and Grant Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
8.5 HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
8.6 Third Party Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
8.7 Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
8.8 Employment Agreements; Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
8.9 Opinion of Purchaser's Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.10 Approval of AmeriPath Preferred Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE IX
CLOSING
-------
9.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
9.2 Closing Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE X
TERMINATION AND ABANDONMENT
---------------------------
10.1 Methods of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
10.2 Procedure Upon Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ▇▇
- ▇▇ -
▇
▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇; INDEMNIFICATION
-------------------------
11.1 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
11.2 Indemnification by the Class A Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
11.3 Indemnification by the Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
11.4 Third-Party Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
11.5 Deductible . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
11.6 Maximum Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE XII
MISCELLANEOUS PROVISIONS
------------------------
12.1 Amendment and Modification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
12.2 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
12.3 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
12.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
12.5 Waiver of Compliance; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
12.6 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
12.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
12.8 Consent to Jurisdiction; Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
12.9 Injunctive Relief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
12.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
12.11 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
12.12 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
12.13 Delays or Omissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
12.14 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
12.15 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
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SCHEDULES
1.1 Class A Shareholders; Ownership of Class A Stock; Pro
Rata Consideration
1.2 Class B Shareholders; Ownership of Class B Stock; Pro
Rata Consideration
2.1 Jurisdictions of Qualification
2.2 Investments and Other Interests
2.3 Capital Stock
2.8 Violations
2.9 Liabilities Covered by Insurance
2.12 Contracts
2.14 Real and Personal Property
2.15 Litigation and Claims
2.17(a) Permits and Licenses
2.17(b) Jurisdictions Licensed to Provide Health Care
2.18 ERISA, Benefit Plans and Other Matters
2.19 Intellectual Property and Software
2.20 Environmental Matters
2.21 Affiliated Transactions
2.22 Banking Arrangements
2.23 Insurance
2.24 Consents
2.28 Other Payments
2.30 Third-Party Payors
2.32 Rate Limitations and Rates
3.2 AmeriPath Subsidiaries
6.5 AmeriPath Stock Option Grants
7.4 Material Contracts and Leases
7.5 Regulatory Approvals Required
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EXHIBITS
1.1 Form of 7% Non-Negotiable Contingent Subordinated Promissory
Note to be issued to Class A Shareholders
1.2 Form of 7% Non-Negotiable Contingent Subordinated Promissory
Note to be issued to Class B Shareholders
1.3 Subordination Agreement and Signature Pages
2.1 DAP's Articles of Incorporation, as amended, and By-laws
2.9 DAP Financial Statements
2.27 Broker's Fee Agreement
3.7 AmeriPath Financial Statements
6.5 Form of AmeriPath Non-Qualified Stock Option Agreement
6.7(a) Form of Employment Agreement for Most Class A Shareholders
6.7(b) Form of Employment Agreement for Drs. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇
6.7(c) Form of Employment Agreement for Physician Class B
Shareholders
6.7(d) Form of Employment Agreement for Dr. ▇▇▇▇▇ ▇▇▇▇▇▇ and
other Physician Non-Sellers
6.7(e) Form of Employment Agreement for ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
7.9 Sellers' Opinion of Counsel
7.11 AmeriPath Shareholders' Agreement and Signature Pages
8.8 AmeriPath Guaranty of Employment Agreements
8.9 AmeriPath's Opinion of Counsel
8.10 AmeriPath Preferred Shareholder Approval Certificate
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (the " Agreement"), dated as of May 23, 1996,
by and among AMERIPATH, INC., a Delaware corporation ("AmeriPath" or the
"Purchaser"), ▇▇▇▇▇▇▇ AND ASSOCIATES PATHOLOGY, P.A., a Florida professional
service corporation ("DAP"), the persons listed on Schedule 1.1 attached hereto,
collectively constituting the holders of all of the issued and outstanding
shares of Class A Voting Common Stock, par value $1.00 per share (the "Class A
Stock"), of DAP (each, a "Class A Shareholder" and, collectively, the "Class A
Shareholders"), and the persons listed on Schedule 1.2 attached hereto (the
"Class B Persons"), collectively constituting the persons who are expected to,
immediately prior to the closing of the transactions contemplated by this
Agreement, hold all of the issued and outstanding shares of Class B Non-Voting
Common Stock, par value $1.00 per share (the "Class B Stock"), of DAP. Each of
the Class B Persons who, at Closing, both (i) sell and deliver shares of Class B
Stock to the Purchaser, and (ii) execute and deliver to the Purchaser an
Employment Agreement in the form of Exhibit 6.7(a) attached hereto, is referred
to herein as a "Class B Shareholder" (collectively, the "Class B Shareholders").
The Class A Shareholders and the Class B Shareholders are collectively referred
to herein as the "Sellers" (each, a "Seller").
The Sellers together own all of the issued and outstanding shares of
capital stock of DAP. DAP, although presently organized as a professional
service corporation under Chapter 621 of the Florida Statutes, will, immediately
prior to the closing of the transactions contemplated by this Agreement, upon
the terms and subject to the conditions set forth herein, convert itself to a
regular business corporation organized under Chapter 607 of the Florida
Statutes. AmeriPath desires to purchase and acquire from the Sellers, and the
Sellers desire to sell, transfer and deliver to AmeriPath, all of the issued and
outstanding shares of capital stock of DAP, upon the terms and subject to the
conditions set forth herein. Upon the closing of the transactions contemplated
by this Agreement, (i) DAP shall be and become a wholly-owned subsidiary of
AmeriPath, and (ii) such wholly-owned subsidiary shall be merged with and into
another wholly-owned subsidiary of AmeriPath ("AmeriPath Florida"), with
AmeriPath Florida surviving such merger.
NOW, THEREFORE, for and in consideration of the mutual benefits to be
derived hereby and the premises, representations, warranties, covenants and
agreements herein contained, AmeriPath, the Sellers and DAP hereby agree,
intending to be legally bound, as follows:
ARTICLE I
PURCHASE OF CAPITAL STOCK
1.1 Purchase and Sale of Class A Stock. (a) Subject to the terms
and conditions of this Agreement, each Class A Shareholder agrees to sell,
transfer and deliver to the Purchaser,
10
and the Purchaser agrees to purchase, acquire and accept delivery from
each Class A Shareholder, all of the issued and outstanding shares of Class A
Stock owned or held by such Class A Shareholder, which number of shares of
Class A Stock to be sold and purchased hereunder is set forth opposite such
Class A Shareholder's name on Schedule 1.1 attached hereto (collectively, the
"DAP Class A Shares").
(b) Upon the sale, transfer and delivery to the
Purchaser by the Class A Shareholders of the DAP Class A
Shares at the Closing (as such term is defined in Section 9.1
hereof), and in consideration therefor, AmeriPath shall
deliver to the Class A Shareholders the following
consideration in the aggregate (which aggregate consideration
shall be divided among the Class A Shareholders, pro rata in
proportion to their ownership of the DAP Class A Shares, in
the amounts and as indicated on Schedule 1.1 attached hereto):
(i) FOURTEEN MILLION SEVEN HUNDRED TWENTY FIVE
THOUSAND DOLLARS ($14,725,000.00) by certified or cashier's
check or by wire transfer;
(ii) Certificates evidencing 570,011 shares of
Common Stock, par value $.01 per share, of AmeriPath (the
"AmeriPath Stock"); and
(iii) Thirteen (13) 7% Non-Negotiable Contingent
Subordinated Promissory Notes, due on December 31, 2000, each
in the form attached hereto as Exhibit 1.1 (the "Class A
Contingent Notes"), which 13 Class A Contingent Notes shall
together be in the aggregate maximum principal amount of
$7,600,000.00, the issuance and certain terms and conditions
of which Class A Contingent Notes are described in Section 1.3
below.
1.2 Purchase and Sale of Class B Stock. (a) Subject to the
terms and conditions of this Agreement, each Class B Person agrees to sell,
transfer and deliver to the Purchaser, and the Purchaser agrees to purchase,
acquire and accept delivery from each Class B Person, all of the issued and
outstanding shares of Class B Stock owned or held by such Class B Person at
and as of the Closing, which number of shares of Class B Stock expected to be
sold and purchased hereunder is set forth opposite such Class B Person's name on
Schedule 1.2 attached hereto (the shares of Class B Stock which are issued and
outstanding at or immediately prior to the Closing are referred to herein as
the "DAP Class B Shares", and such DAP Class B Shares and the DAP Class A
Shares are collectively referred to as the "DAP Shares").
(b) Upon the sale, transfer and delivery to the Purchaser by
the Class B Persons of the DAP Class B Shares at the Closing, and in
consideration therefor, AmeriPath shall deliver to each of the Class B
Persons delivering DAP Class B Shares to AmeriPath at the Closing the
following consideration in the aggregate (which aggregate consideration
shall be divided among the Class B Shareholders, pro rata
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in proportion to their ownership of the DAP Class B Shares, in the
amounts and as indicated on Schedule 1.2 attached hereto):
(i) SEVEN HUNDRED SEVENTY FIVE THOUSAND DOLLARS
($775,000.00) by certified or cashier's check or by wire
transfer;
(ii) Certificates evidencing 29,994 shares of
AmeriPath Stock; and (iii) Six (6) 7% Non-Negotiable
Contingent Subordinated Promissory Notes, due on December 31,
2000, each in the form attached hereto as Exhibit 1.2 (the
"Class B Contingent Notes" and, together with the Class A
Contingent Notes, in general description, the "Contingent
Notes"), which six Class B Contingent Notes shall together be
in the aggregate maximum principal amount of $400,000.00, the
issuance and certain terms and conditions of which Contingent
Notes are described in Section 1.3 below.
1.3 The Contingent Notes.
(a) Principal Amounts, Issuance of Class A Contingent
Notes. The aggregate maximum principal amount of the Class A
Contingent Notes to be issued and delivered by the Purchaser to the
Class A Shareholders at the Closing pursuant to Section 1.1(b)(iii)
hereof shall be $7,600,000. The aggregate mid-point, target principal
amount of the Class A Contingent Notes to be issued and delivered by
the Purchaser to the Class A Shareholders at the Closing pursuant to
Section 1.1(b)(iii) hereof shall be $3,800,000. At the Closing, the
Purchaser shall deliver to each Class A Shareholder a Contingent Note,
due on December 31, 2000, in the maximum stated principal amount of
$584,615.38 (i.e., $7,600,000 divided by 13) and in the mid-point,
target principal amount of $292,307.69 (i.e., $3,800,000 divided by
13), which Contingent Notes shall be in the form of Exhibit 1.1
hereto.
(b) Principal Amounts, Issuance of Class B Contingent
Notes. The aggregate maximum principal amount of the Class B
Contingent Notes to be issued and delivered by the Purchaser to the
Class B Shareholders at the Closing pursuant to Section 1.2(b)(iii)
hereof shall be $400,000. The aggregate mid-point, target principal
amount of the Class B Contingent Notes to be issued and delivered by
the Purchaser to the Class B Shareholders at the Closing pursuant to
Section 1.2(b)(iii) hereof shall be $200,000. At the Closing, the
Purchaser shall deliver to each Class B Shareholder a Contingent Note,
due on December 31, 2000, in the maximum stated principal amount of
$66,666.66 (i.e., $400,000 divided by 6) and in the mid-point, target
principal amount of $33,333.33 (i.e., $200,000 divided by 6), which
Contingent Notes shall be in the form of Exhibit 1.2 hereto; provided,
however, that, in the event that the number of Class B Shareholders
who deliver DAP Class B Shares to AmeriPath at Closing is less than
six (6), then the actual maximum stated principal amount and mid-
point, target principal
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amount of each Class B Contingent Note issuable to each Class B
Shareholder at the Closing shall equal 400,000 and 200,000,
respectively, divided by the actual number of Class B Shareholders
at Closing.
(c) Payments Under Contingent Notes; Minimum Targets.
Each Contingent Note shall be due and payable in the applicable
principal amount specified in or calculated pursuant to such Note and
the Annexes to such Note (the "Appropriate Payment Amount")
corresponding to a target range of Operating Earnings (as defined
below) or Cumulative Operating Earnings (as defined below), as the
case may be, specified in such Note and the Annexes to such Note, with
respect to each of the five (5) years ending December 31, 1996 through
December 31, 2000, if, and only if, (i) with respect to the year
ending December 31, 1996, DAP's Operating Earnings for such year equal
or exceed $3,300,000 (the "Year 1 Minimum Target", or (ii) with
respect to each of the four (4) years ending December 31, 1997, 1998,
1999 and 2000, DAP's Cumulative Operating Earnings for such year equal
or exceed 6,600,000, 9,900,000, 13,200,000 and 16,500,000,
respectively (the " Year 2-5 Minimum Targets" and, together with the
Year 1 Minimum Target (each, as applicable to the relevant year), the
"Minimum Targets"). For each of the years ending December 31, 1996
through December 31, 2000 for which Operating Earnings or Cumulative
Operating Earnings, as the case may be, are less than the applicable
Minimum Target, no principal payment(s) shall be required, due or made
under the Contingent Notes, or under any Contingent Note, with respect
to that year, and any and all interest with respect thereto or accrued
thereon, which otherwise would have become payable had the applicable
Minimum Target been achieved for such year shall be canceled and
voided. Notwithstanding any other provision in this Section 1.3 or in
the Contingent Notes, the aggregate maximum principal amount due or
payable under all the Contingent Notes shall not exceed $8,000,000.
(d) Calculation of Operating Earnings and Cumulative Operating
Earnings.
(i) "Operating Earnings". For purposes hereof (and
the Contingent Notes), the term "Operating Earnings", with respect to
any year, shall mean the income of or attributable to the DAP Business
(as defined below) for such full (i.e., January 1 through December 31)
year, before deduction for (in each case, with respect to the DAP
Business) (i) interest paid in such year, (ii) income tax payable for
such year, (iii) charges for amortization of goodwill, including
without limitation any amortization of goodwill recorded in connection
with this transaction or amortization of any payments made under the
Contingent Notes, (iv) any extraordinary items, as such term is used
in accordance with generally accepted accounting principles, with
respect to DAP or the DAP Business, and (v) any fees or expenses
incurred by DAP in connection with the transactions contemplated by
this Agreement. All such calculations shall be determined in
accordance with generally accepted accounting principles, as
consistently applied by AmeriPath. For purposes hereof (and the
Contingent Notes), the term " DAP Business" shall mean and include the
business, operations, contracts, assets and liabilities of DAP
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(as such is constituted immediately prior to the
Closing), which DAP Business following the Closing shall consist of
the business, operations, contracts, assets and liabilities of, and
the results of operations, revenues and expenses associated with, (i)
the contracts with hospitals and out-patient facilities in effect from
time to time, to which DAP, prior to the Closing, and the Orlando
Division (as such term is defined below), following the Closing, is a
party, and which are serviced by the physicians who from time to time
are employed by AmeriPath Florida and who report to the medical
director (the " Medical Director") for AmeriPath Florida's Orlando
Division (collectively, such physicians being referred to herein as
the "Orlando- Based Pathologists"), and (ii) AmeriPath Florida's
employment of, and employment agreements with, any and all
Orlando-Based Pathologists. For purposes hereof (and the Contingent
Notes), the term " Orlando Division" shall mean and include the
business and operations of AmeriPath Florida (i.e., the wholly-owned
subsidiary of AmeriPath which is the successor in interest, by merger,
to DAP) which, prior to consummation of the transactions contemplated
by this Agreement, constituted the business and operations of ▇▇▇▇▇▇▇
and Associates Pathology, P.A.
(ii) Cumulative Operating Earnings. For purposes
hereof (and the Contingent Notes), the term "Cumulative Operating
Earnings" shall mean and include, with respect to each of the four (4)
years ending December 31, 1997, 1998, 1999 and 2000, the Operating
Earnings of the DAP Business, on a cumulative basis, from January 1,
1996 through the end of such year (e.g., the Cumulative Operating
Earnings for the year ending December 31, 1998 shall equal the
Operating Earnings, on a cumulative basis, from January 1, 1996
through December 31, 1998 ( i.e., three full cumulative years of
Operating Earnings would be included)).
(iii) Other Adjustments; Limitations. For purposes
of calculating Operating Earnings (and, as relevant, Cumulative
Operating Earnings) hereunder, (1) any and all loans from AmeriPath to
DAP (or any AmeriPath subsidiary that owns the DAP Business) shall be
deemed to be at the prime rate of interest as announced from time to
time by Nationsbank, N.A.; (2) with respect to the year ending
December 31, 1996 only, "Operating Earnings" shall be calculated
without any deduction or offset for: (x) profit sharing distributions
in 1996, and (y) distributions and bonuses paid to the Class A
Shareholders in 1996; and (3) the expenses associated with the DAP
Business may include costs, expenses and charges relating to
management, billing or other services provided by AmeriPath or its
Affiliates (as such term is defined in Section 12.3 hereof) to the
extent both (i) such services are provided to or for the benefit of
the Orlando Division and (ii) the price or amount charged or allocated
with respect to such services is based upon the fair market value
thereof and is competitive with the price or amount that would be
charged for such services by a Person not affiliated with the
Purchaser on an arms'-length, negotiated basis.
(iv) Calculation Methodology. A statement of the
Operating Earnings, prepared by AmeriPath senior management, will be
delivered to the Sellers as soon as
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practicable following the end of each year, but in all events
within 80 days after the end of each such year. If five (5) or more
Sellers who then hold Contingent Notes (the "Objecting Sellers") wish
to challenge the calculation of Operating Earnings prepared by
AmeriPath senior management, they may do so by giving written notice
of such objection (the "Objection Notice") to AmeriPath, signed by
such Objecting Sellers, within 20 days after such statement of
Operating Earnings is delivered to the Sellers. The Objection Notice
shall set forth in reasonable detail the Objecting Sellers'
calculation of Operating Earnings (or Cumulative Operating Earnings,
as the case may be). To the extent the parties do not dispute or
disagree on the achievement of some amount of Operating Earnings (or
Cumulative Operating Earnings, as the case may be) in the year in
question, then the Appropriate Payment Amount corresponding to such
amount of Operating Earnings (or Cumulative Operating Earnings, as the
case may be) which is not in dispute, together with interest accrued
and unpaid thereon, shall be paid to the Sellers within five (5) days
of receipt of the Objection Notice, and the parties shall proceed to
resolve their dispute(s), or any amount(s) in dispute, in accordance
with this subsection (iv). If an Objection Notice is timely delivered
to AmeriPath, AmeriPath and the Objecting Sellers shall use their best
efforts to resolve as soon as practicable any difference of opinion.
If they are unable to resolve such difference within 20 days after
receipt by AmeriPath of the Objection Notice from the Objecting
Sellers, the matter shall be referred to the independent certified
public accountant who then audits the annual financial statements of
AmeriPath, whose decision shall be final and binding on all parties.
If an Objection Notice is not timely delivered to AmeriPath, and if
the statement of Operating Earnings prepared by AmeriPath senior
management indicates that an Applicable Target Amount has been met for
a given year, then the corresponding Appropriate Payment Amount of the
Contingent Notes with respect to such year shall be paid within five
(5) days after the earlier of (x) the end of the 20 day period within
which the Sellers are entitled to deliver an Objection Notice, or (y)
receipt by AmeriPath of notice from all Objecting Sellers that they
accept the calculation of Operating Earnings. If Objecting Sellers
timely deliver an Objection Notice to AmeriPath objecting to the
calculation of Operating Earnings pursuant to this Section 1.3, then
the Appropriate Payment Amount of the Contingent Notes for such year
(to the extent not theretofore paid) shall be paid within five (5)
days after resolution of the dispute with respect to such calculation
to the extent that the corresponding Applicable Target Amount has been
met for such year.
(e) Effect of Sale on Contingent Notes. Should any
Person (as such term is defined in Section 12.3 hereof) acquire
AmeriPath, whether by means of a merger with or into AmeriPath in
which AmeriPath does not survive or the acquisition of all or
substantially all of the stock or assets of AmeriPath (an " AmeriPath
Acquisition "), then, with respect to the Contingent Notes, as a
condition to consummation of the AmeriPath Acquisition, (i) the
acquiring Person shall be required either to acknowledge AmeriPath's
on-going obligations under the Contingent Notes or to assume the
obligations under the Contingent Notes, and (ii) at the option and
election of the holders of a majority, in terms of maximum principal
amount, of the Contingent Notes then outstanding (a " Majority of
Noteholders"), either (A) the Contingent Notes remaining outstanding
shall
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become fixed obligations of such Person or AmeriPath, as the
case may be, payable in accordance with their terms without the
requirement of satisfaction of any condition or contingency relating
to Operating Earnings, and with the principal amount payable under
each outstanding Contingent Note, for each year (including the year in
which the AmeriPath Acquisition occurs) remaining under such Note,
being fixed at the Fixed Payment Amount (as such term is defined
below), or (B) the terms of the Contingent Notes shall remain in
effect and unchanged and such acquiring Person shall be required to
provide an irrevocable standby letter of credit in favor of the
holders of the Contingent Notes, which letter of credit (x) shall be
issued by a U.S.-based financial institution with $100 million or more
in assets, (y) shall be in form and substance reasonably acceptable to
a Majority of Noteholders, and (z) shall be in an amount sufficient to
secure the due payment and performance of the Contingent Notes due
each year at least at the Fixed Payment Amount (in each case, as
appropriate to the Contingent Note, whether a Class A Contingent Note
or a Class B Contingent Note). For purposes hereof, the term "Fixed
Payment Amount" shall mean and include: (1) with respect to the Class
A Contingent Notes to be issued pursuant to Section 1.1(b)(iii)
hereof, $58,461.54 (i.e., 3,800,000 divided by five, divided by 13);
and (2) with respect to the Class B Contingent Notes to be issued
pursuant to Section 1.2(b)(iii) hereof, the amount of $40,000 (i.e.,
200,000 divided by five), divided by the actual number of Class B
Shareholders at Closing.
(f) Effect of Acquisitions on Contingent Notes. In the
event that AmeriPath acquires one or more Persons or businesses after
the Closing Date, Operating Earnings will be calculated without the
deduction of any selling, general or administrative expenses which do
not relate to the DAP Business, and without taking into account the
income generated by, or expenses incurred in connection with, the
acquisition or the acquired Person or business. If in the judgment of
a majority of the full Board of Directors of AmeriPath it is
impracticable to calculate Operating Earnings after such acquisition
on the basis set forth herein, then, with respect to each remaining
year ending December 31 following such determination by the Board of
Directors, an amount equal to two (2) times the Fixed Payment Amount
(in each case, as appropriate to the Contingent Note, whether a Class
A Contingent Note or a Class B Contingent Note), together with accrued
and unpaid interest thereon to and including the date of such payment,
shall accelerate and become immediately due and payable on the later
of the date of consummation of such transaction and the determination
by the Board of Directors.
(g) Interest. Each Contingent Note shall bear interest
from the date of issuance until maturity (if any), computed on the
basis of a 360-day year and the actual number of days elapsed, on the
unpaid Appropriate Payment Amount thereof, at the rate of seven
percent (7.0%) per annum. Interest shall accrue and compound
annually, and shall be payable only upon payment of principal, if any.
In the event Operating Earnings or Cumulative Operating Earnings, as
the case may be, are less than the Minimum Target for a given year,
interest on the principal amount of all Contingent Notes shall be
forgiven and canceled and voided for such year.
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(h) Maturity, Redemption and Prepayments. For each year
in which an Applicable Target Amount is achieved, the corresponding
Appropriate Payment Amount of the Contingent Notes, together with
interest accrued on such Appropriate Payment Amount, shall become due
and payable and shall be paid as provided in subparagraph (b) above.
AmeriPath, in its sole judgment and discretion, shall be entitled to
prepay the Contingent Notes, either in whole or in part, without
premium or penalty, at any time prior to the maturity date thereof, at
a price equal to two (2) times the Fixed Payment Amount (in each case,
as appropriate to the Contingent Note, whether a Class A Contingent
Note or a Class B Contingent Note), together with accrued and unpaid
interest thereon to and including the date of such payment, with
respect to each remaining year ending December 31 (including the year
in which such prepayment occurs) following such date of prepayment;
provided, however, that if, in the judgment of a majority of the full
Board of Directors of AmeriPath, it is determined that the Contingent
Notes, or the holding of the Contingent Notes by any Seller, may
violate any Regulation or Order of any Authority (as such terms are
defined in Section 12.3), then, at AmeriPath's sole option and
election (as recommended by counsel to Ameripath), the Contingent
Notes, (i) shall become fixed obligations, payable in accordance with
their terms without the requirement of satisfaction of any condition
or contingency relating to Operating Earnings (or Cumulative Operating
Earnings), and with the principal amount payable under each
outstanding Contingent Note with respect to each remaining year being
fixed at the Fixed Payment Amount (in each case, as appropriate to the
Contingent Note, whether a Class A Contingent Note or a Class B
Contingent Note), or (ii) shall be prepaid in full at the Fixed
Payment Amount (in each case, as appropriate to the Contingent Note,
whether a Class A Contingent Note or a Class B Contingent Note) with
respect to each remaining year thereunder (together with any accrued
and unpaid interest thereon). AmeriPath shall give the holders of the
Contingent Notes irrevocable written notice of any prepayment
permitted hereunder not less than three (3) business days prior to the
prepayment date, specifying such prepayment and the amount of the
Contingent Notes proposed to be prepaid on such date, whereupon such
principal amount of the Contingent Notes specified in such notice,
together with accrued interest thereon, shall become due and payable
on the prepayment date. Each and every partial prepayment of the
Contingent Notes shall be made with respect to all of the Contingent
Notes then outstanding, rather than with respect to any portion
thereof, and the aggregate amount of each partial prepayment shall be
allocated among all of the holders of the Contingent Notes at the time
outstanding pro rata in proportion to the unpaid principal amounts of
the Contingent Notes held by each of such holders.
(i) Other Terms. Other terms of the Contingent Notes are
as follows:
(1) Payments. All payments of principal
(including any prepayments or redemptions), and interest under
the Contingent Notes shall be made by AmeriPath in lawful
money of the United States of America in immediately available
funds (or at the written request of the holders thereof, by
certified or bank check) not later than twelve o'clock noon,
Miami, Florida time, on the date
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each such payment is due. To the extent calculation of any
payment amounts (whether principal, interest or otherwise)
results in fractions of a cent, the amount shall be rounded
down to the nearest whole cent.
(2) Subordination Agreement. The Contingent
Notes shall be subordinate and junior in right of payment to
certain senior indebtedness pursuant to the subordination
agreement in substantially the form attached hereto as Exhibit
1.3 (the "Subordination Agreement"). As a condition to
AmeriPath's obligations under the Contingent Notes, each
Seller agrees to execute and deliver appropriate documents and
agreements, including the Subordination Agreement, evidencing
the subordination of the Contingent Notes to senior
indebtedness of AmeriPath and its Subsidiaries.
(3) Notes Non-negotiable. Except as specifically
provided in the Contingent Notes, the Contingent Notes shall
be non-transferable and non-negotiable.
(4) Right of Set-Off on Class A Contingent Notes.
With respect to all Contingent Notes issued under Section
1.1(b)(iii) hereof to Class A Shareholders, AmeriPath shall
have the right, following prior written notice to the holder,
to set-off against principal and/or interest payable to such
Class A Shareholder under a Contingent Note held by such
shareholder the amount of any indemnification payment owed by
such Class A Shareholder under Article XI hereof. Such notice
shall state with reasonable specificity the good faith basis
for AmeriPath's assertion that such Class A Shareholder is
obligated to make such indemnification payment, and a copy of
such notice shall also be sent to each director of AmeriPath.
The Class A Shareholder shall have the right to respond to
such notice, and if the Class A Shareholder requests that the
exercise of such right of set-off be considered and approved
by the Board of Directors, then such right shall not be
exercised unless considered and approved by a majority of the
full Board of Directors. If within 10 days after receipt of
such notice of set-off, the Class A Shareholder against whom
AmeriPath intends to assert such right of set-off contests in
writing (sent to AmeriPath) AmeriPath's claim that the Class A
Shareholder is obligated to pay such amount as indemnification
under Article XI hereof, then the amount which AmeriPath would
otherwise have paid to the Class A Shareholder but for the
exercise of such right of set-off shall be paid into an
interest bearing escrow account maintained by a bank selected
by AmeriPath, to be held in such account until AmeriPath and
the Class A Shareholder have reached agreement as to the
amount, if any, of such indemnification payment and set-off,
or until there has been a judicial resolution of such matter,
at which time the amount held in such segregated account,
together with any interest accrued thereon, shall be released
to the prevailing party, as appropriate and/or instructed.
AmeriPath and the Class A Shareholder agree that they will use
their best efforts to resolve any such dispute within 30 days.
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(5) Defaults. The holders of the Contingent
Notes shall be entitled to the benefit of the Events of
Default set forth in the applicable form of Contingent Note
attached as Exhibit 1.1 and Exhibit 1.2 hereto.
(6) Documentary Stamp Taxes. The parties hereto
hereby acknowledge that it is their belief that Florida law
does not require the payment of documentary stamp taxes in
connection with the execution and delivery of the Contingent
Notes due to the contingent nature of the obligation.
Notwithstanding the foregoing, the Purchaser agrees to pay any
and all such documentary stamp taxes, or other similar taxes,
if any, that may become due or payable in connection with the
execution and delivery of the Contingent Notes or this
Agreement, and the Purchaser agrees to indemnify and hold
harmless the Sellers and DAP from and against any and all such
taxes.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND DAP
The Class A Shareholders and DAP, jointly and severally, make the
following representations and warranties to the Purchaser, each of which shall
be deemed material (and the Purchaser, in executing, delivering and
consummating this Agreement, has relied and will rely upon the correctness and
completeness of each of such representations and warranties notwithstanding any
independent investigation); in addition, the Class B Shareholders, severally
and not jointly, make the representations set forth in Sections 2.5, 2.7 and
2.25 below to the Purchaser, each of which representations shall be deemed
material (and the Purchaser, in executing, delivering and consummating this
Agreement, has relied and will rely upon the correctness and completeness of
each of such representations and warranties notwithstanding any independent
investigation):
2.1 Corporate Organization, Qualification, etc. DAP is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Florida with full corporate power and authority to carry
on its business as it is now being conducted and proposed to be conducted, and
to own, operate and lease its properties and assets. DAP is duly qualified or
licensed to do business in good standing in the jurisdictions set forth on
Schedule 2.1 attached hereto, those being every jurisdiction in which the
conduct of DAP's business, the ownership or lease of its properties, the
proposed conduct of its business or ownership or lease of its properties, or
the transactions contemplated by this Agreement, require it to be so qualified
or licensed and the failure to be so qualified or licensed would have a
Material Adverse Effect (as defined in Section 12.3). DAP's articles of
incorporation have not been amended or supplemented since September 5, 1990,
and are in full force and effect as of the date hereof. True, complete and
correct copies of DAP's articles of incorporation and by-laws, as presently in
effect, are attached hereto as Exhibit 2.1.
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2.2 Subsidiaries. DAP has no Subsidiaries nor, except as set
forth on Schedule 2.2 hereto, any investment or other interest in, or any
outstanding loan or advance to or from, any Person, including any officer,
director or shareholder.
2.3 Capital Stock. As of the date of this Agreement, the
authorized capital stock of DAP consists of (i) 2,000 shares of Class A Stock
and (ii) 1,000 shares of Class B Stock. Prior to Closing, pursuant to Section
4.9 hereof, the DAP articles of incorporation will be amended to, among other
things, provide that DAP is subject to Section 607 of the Florida Statutes (the
Florida Business Corporation Act) and not Section 621 of the Florida Statutes
(the Professional Service Corporation Act). The stock record book of DAP has
been delivered to the Purchaser for inspection prior to the date hereof and is
complete and correct, and all requisite Federal and State documentary stamps
have been affixed thereon and canceled. Except as set forth in Schedule 2.3
hereto, the DAP Class A Shares and the DAP Class B Shares constitute all of the
issued and outstanding shares of capital stock of DAP. No shares of preferred
stock of DAP are authorized, issued or outstanding as of the date hereof, and
no shares of preferred stock of DAP will be authorized, issued or outstanding
as of the Closing Date.
2.4 Corporate Record Books. The corporate minute books of DAP
have been made available to the Purchaser, are complete and correct in all
material respects and contain all of the material and formal proceedings of the
shareholders and directors of DAP.
2.5 Title to Stock. Except as set forth in Schedule 2.3 hereto,
all of the outstanding shares of the capital stock of DAP are and immediately
prior to the Closing will be owned by the Sellers (in the amounts and as set
forth in Schedules 1.1 and 1.2 hereto), are duly authorized, validly issued and
fully paid and nonassessable, and are free of all Liens (as defined in Section
12.3). Upon delivery of the Purchase Price to the Sellers at the Closing, (i)
each Seller will convey, and the Purchaser will own and hold, good and
marketable title to the DAP Shares immediately prior to the Closing owned by
such Seller, free and clear of all Liens or contractual restrictions or
limitations whatsoever, and (ii) except as set forth in Schedule 2.3 hereto,
the Purchaser will own and hold good and marketable title to all of the issued
and outstanding shares of capital stock of DAP. In addition, once the
litigation in the case styled ▇▇▇▇▇▇▇ & Associates Pathology, P.A. v. ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, M.D. pending in the Circuit Court of the Ninth Judicial Circuit in and
for Orange County Florida (Case No. CI96-1884) (the "▇▇▇▇▇▇ Litigation") is
resolved (whether by settlement or by final, non-appealable judgment), the
Purchaser will own and hold good and marketable title to all of the issued and
outstanding shares of capital stock of DAP.
2.6 Options and Rights. Except as specifically provided in this
Agreement, there are no outstanding subscriptions, options, warrants, rights,
securities, contracts, commitments, understandings or arrangements under which
DAP is bound or obligated to issue any additional shares of its capital stock
or rights to purchase shares of its capital stock. Except for the
Stockholders' Agreement dated as of July 27, 1994, as amended, by and among DAP
and the holders of Class A Stock (the "DAP Stockholders' Agreement") or as
otherwise specifically
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provided in this Agreement, there are no agreements, arrangements or
understandings between any Seller and/or DAP and any other Person (as defined
in Section 12.3) regarding the capital stock of DAP (or the transfer,
disposition, holding or voting thereof).
2.7 Authorization, Etc. DAP has full power and authority and each
of the Sellers has full capacity to enter into this Agreement and the
agreements and documents contemplated hereby and perform their respective
obligations hereunder and thereunder. The execution, delivery and performance
of this Agreement and all other agreements and transactions contemplated hereby
have been duly authorized by the Board of Directors of DAP and no other
corporate proceedings on its part are necessary to authorize this Agreement and
the transactions contemplated hereby. Each of the Sellers is entering into
this Agreement on such Seller's own volition, free from any undue influence or
coercion. Upon execution and delivery of this Agreement by the parties hereto
this Agreement and all other agreements contemplated hereby shall constitute
the legal, valid and binding obligation of each of DAP and each Seller party
hereto, enforceable against each such party in accordance with their respective
terms.
2.8 No Violation. The execution and delivery by DAP and the
Sellers of this Agreement, and any and all other agreements contemplated
hereby, and the fulfillment of and compliance with the respective terms hereof
and thereof by DAP and the Sellers do not and will not, except as set forth on
Schedule 2.8 attached hereto, (a) conflict with or result in a breach of the
terms, conditions or provisions of, (b) constitute a default or event of
default under (with due notice, lapse of time or both), (c) result in the
creation of any Lien upon the capital stock or assets of DAP pursuant to, (d)
give any third party the right to accelerate any obligation under, (e) result
in a violation of, or (f) require any authorization, consent, approval,
exemption or other action by or notice to any court or Authority (as defined in
Section 12.3) pursuant to, the articles of incorporation or by-laws of DAP or,
to the knowledge of DAP and the Class A Shareholders, any Regulation (as
defined in Section 12.3), Order (as defined in Section 12.3) or Contract (as
defined in Section 12.3) to which DAP or any Seller is subject. DAP and the
Sellers will comply with all applicable and material Regulations and Orders in
connection with the execution, delivery and performance of this Agreement and
the transactions contemplated hereby.
2.9 Financial Statements. Attached as Exhibit 2.9 hereto are the
following financial statements of DAP: (i) balance sheet (unaudited), statement
of revenues and expenses (unaudited) and related notes and schedules thereto
(unaudited) for the fiscal years ended December 31, 1995 and 1994 (the "1995
Financial Statements"), (ii) audited balance sheet, statement of revenues and
expenses and related notes and schedules thereto for the six month period ended
June 30, 1995, and (iii) balance sheet (unaudited), statement of revenues and
expenses (unaudited) and related notes and schedules thereto (unaudited) for
the month ended March 31, 1996 (collectively, together with the 1995 Financial
Statements, the "Financial Statements"). The balance sheets (and the notes and
schedules thereto) included in the Financial Statements fairly present the
financial position of DAP in accordance with GAAP (as defined in Section 12.3)
as at the respective dates thereof, and the statements of revenues and expenses
(and the notes and schedules thereto) included in the Financial Statements (x)
fairly present the
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results of operations for the periods therein referred to, all in
accordance with GAAP (except as stated therein or in the notes or schedules
thereto) applied on a consistent basis, and (y) fairly present the financial
condition of DAP at the respective date of, and for the period covered by, such
statements. DAP has no liability, whether accrued, absolute or contingent, of
a type required to be reflected on a balance sheet or described in the notes
thereto in accordance with GAAP, other than (i) liabilities which have been
reflected or reserved against in the 1995 Financial Statements, (ii)
liabilities incurred since December 31, 1995, (iii) liabilities covered by
insurance or reinsurance (a complete and detailed description of which is
provided in Schedule 2.9), and (iv) liabilities arising out of the matters
(regarding certain negative pap smears) disclosed in item 2 of Schedule 2.15
hereof (to the extent any such liabilities are not covered by insurance).
2.10 Employees. As of December 31, 1995 and as of the date hereof
DAP had an aggregate of 122 and approximately 128 employees, respectively. To
the knowledge of DAP and the Class A Shareholders, DAP has been for the past
four years, and currently is, in compliance with all Federal, State and local
Regulations and Orders affecting employment and employment practices of DAP
(including those Regulations promulgated by the Equal Employment Opportunity
Commission), including terms and conditions of employment and wages and hours.
2.11 Absence of Certain Changes. Since December 31, 1995, there
has not been (a) any Material Adverse Change (as defined in Section 12.3) in
the business, prospects, financial condition, revenues, expenses or operations
of DAP; (b) any decrease in the cash and cash equivalents of DAP from the
amounts shown on the balance sheet included in the 1995 Financial Statements
(except for any such decrease attributable to any Permitted Cash Payments (as
defined in Section 12.3) hereof) made by DAP prior to Closing), (c) any damage,
destruction or loss, whether covered by insurance or not, having a Material
Adverse Effect, with regard to DAP's properties and business; (d) any payment
by DAP to, or any notice to or acknowledgment by DAP of any amount due or owing
to, DAP's self-insured carrier in connection with any self-insured amounts or
liabilities under health insurance covering employees of DAP, in each case, in
excess of a reserve therefor on the balance sheet included in the 1995
Financial Statements; (e) any declaration, setting aside or payment of any
dividend or distribution (whether in cash, stock or property) in respect of
DAP's capital stock, or any redemption or other acquisition of such capital
stock by DAP (except for any Permitted Cash Payments (as defined in Section
12.3) hereof); (f) any increase (other than in the ordinary course of business)
in the rate of compensation or in the benefits payable or to become payable by
DAP to its directors, officers, employees or consultants; (g) any amendment,
modification or termination of any existing, or entering into any new,
contract, agreement, arrangement or plan relating to any salary, bonus,
insurance, pension, health or other employee welfare or benefit plan for or
with any directors, officers, employees or consultants of DAP; (h) any entry
into any material Contract not in the ordinary course of business, including
without limitation relating to any borrowing or capital expenditure; (i) any
disposition by DAP of (x) any capital asset having a value in excess of $2,500
or (y) capital assets, in the aggregate, having a value in excess of $15,000;
or (j) any change by DAP in accounting methods or principles.
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2.12 Contracts.
(a) Except as set forth in Schedule 2.12 hereto, DAP is
neither a party to nor subject to any written or oral:
(i) pension, profit sharing, bonus, retirement,
stock option, stock purchase or other plan providing for
deferred or other compensation to employees or any other
employee benefit plan (other than as set forth in Schedule
2.18 hereto), or any Contract with any labor union;
(ii) employment or consultation agreement, or
other compensation Contract, commitment or arrangement, which
is not terminable on notice of 30 days' or less by DAP without
penalty or other financial obligation (and, except as set
forth on Schedule 2.12, no officer or employee of DAP receives
total salary, bonus and other compensation from DAP of $70,000
or more per annum).
(iii) Contract containing covenants or agreements
limiting the freedom of DAP or any of its employees to compete
in any line of business presently conducted by DAP with any
Person or to compete in any such line of business in any area;
(iv) Contract with any Seller or with any
affiliate or relative of any Seller (except for any Contract
disclosed in Schedule 2.12 pursuant to clauses (ii) or (iii)
of this Section 2.12(a);
(v) Contract relating to or providing for loans
to officers, directors, employees or Affiliates (as such term
is defined in Section 12.3 hereof);
(vi) Contract under which DAP has advanced or
loaned, or is obligated to advance or loan, funds to any
Person;
(vii) Contract relating to the incurrence,
assumption or guarantee of any indebtedness, obligation or
liability (in respect of money or funds borrowed), or
otherwise pledging, granting a security interest in or placing
a Lien on any asset of DAP;
(viii) guarantee or endorsement of any obligation;
(ix) Contract under which DAP is lessee of or
holds or operates any property, real or personal, owned by any
other party, except for any lease of real or personal property
under which the aggregate annual rental payments do not exceed
$10,000 or which are terminable within 30 days without
penalty;
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23
(x) Contract pursuant to which DAP is lessor of
or permits any third party to hold or operate any property,
real or personal, owned or controlled by DAP;
(xi) assignment, license, indemnification or
Contract with respect to any intangible property (including,
without limitation, any Proprietary Rights);
(xii) warranty Contract with respect to its
services rendered (or to be rendered) or its products sold or
leased;
(xiii) Contract which prohibits, restricts or limits
in any way the payment of dividends or distributions by DAP;
(xiv) Contract under which it has granted any
Person any registration rights (including piggyback rights)
with respect to any securities;
(xv) Contract for the purchase, acquisition or
supply of inventory (other than in the ordinary course of
business) and other property and assets, whether for resale or
otherwise in excess of $10,000;
(xvi) Contracts with independent agents, brokers,
dealers or distributors;
(xvii) sales, commissions, advertising or marketing
Contracts;
(xviii) Contracts providing for "take or pay" or
similar unconditional purchase or payment obligations;
(xix) Contracts with Persons with which, directly
or indirectly, any Seller also has a Contract;
(xx) Contract with a hospital, physician or other
health care provider or Person pursuant to which the cost of
providing health care services to the patients covered by such
Contract is assumed in whole or in part by such provider; or
(xxi) any other Contract which is material to DAP's
operations or business prospects, except those which (x) were
made in the ordinary course of business, (y) are terminable
on 30 days' or less notice by DAP without penalty or other
financial obligation, and (z) in each case, involve aggregate
payments by or to DAP of $10,000 or less.
(b) Except as set forth on Schedule 2.8 or consents
required to be obtained by the Purchaser, no consent of any party to
any Contract is required in connection with the
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execution, delivery or performance of this Agreement, or the
consummation of the transactions contemplated hereby.
(c) DAP has performed in all material respects all
obligations required to be performed by it and is not in default in
any material respect under or in material breach of nor in receipt of
any claim of default or breach under any material Contract to which
DAP is subject (including without limitation all performance bonds,
warranty obligations or otherwise); no event has occurred which with
the passage of time or the giving of notice or both would result in a
material default, breach or event of non-compliance under any material
Contract to which DAP is subject (including without limitation all
performance bonds, warranty obligations or otherwise); DAP does not
have any present expectation or intention of not fully performing all
such obligations; DAP does not have any knowledge of any breach or
anticipated breach by the other parties to any such Contract to which
it is a party.
2.13 True and Complete Copies. Copies of all Contracts and
documents delivered and to be delivered hereunder by the Sellers or DAP are and
will be true and complete copies of such agreements, contracts and documents.
2.14 Title and Related Matters.
(a) DAP has good and marketable title to all of the
properties and assets reflected in the Financial Statements or
acquired after the date thereof and for properties sold or otherwise
disposed of since the date thereof in the ordinary course of business,
free and clear of all Liens, except (i) statutory Liens not yet
delinquent, (ii) such imperfections or irregularities of title, Liens,
easements, charges or encumbrances as do not detract from or interfere
with the present use of the properties or assets subject thereto or
affected thereby, otherwise impair present business operations at such
properties; or do not detract from the value of such properties and
assets, taken as a whole, or (iii) as reflected in the Financial
Statements or the notes thereto (including the Lien as a result of the
indebtedness under the Loan Agreement set forth on Schedule 2.12
hereto).
(b) DAP owns, and will on the Closing Date own, good and
marketable title to all the personal property and assets, tangible or
intangible, used in its business except as to those assets leased all
of which leases are in good standing and no party is in default
thereunder. None of the assets belonging to or held by DAP is or will
be on the Closing Date subject to any (i) Contracts of sale or lease,
or (ii) Liens. Except for normal breakdowns and servicing
requirements, all machinery and equipment regularly used by DAP in the
conduct of its business is in good operating condition and repair,
ordinary wear and tear excepted.
(c) There has not been since December 31, 1995, and will
not be prior to the Closing Date, any sale, lease, or any other
disposition or distribution by DAP of any
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of its assets or properties and any other assets now or
hereafter owned by it, except transactions in the ordinary and regular
course of business or as otherwise consented to by the Purchaser.
After the Closing, DAP, as the wholly-owned subsidiary of the
Purchaser, will own, or have the unrestricted right to use, all
properties and assets that are currently used in connection with the
business of the Sellers.
(d) Schedule 2.14 attached hereto sets forth a
description of all real property, fixed assets and personal property
(with an individual value in excess of $1,000) owned or leased by DAP.
2.15 Litigation. Schedule 2.15 attached hereto sets forth a
description of the existing Claims (as defined in Section 12.3) and threatened
litigation against DAP. There is no Claim pending or, to the best knowledge of
each Seller and DAP, threatened against any of the Sellers or DAP which, if
adversely determined, would have a Material Adverse Effect on DAP. Nor, to the
knowledge of DAP or the Class A Shareholders, is there any Order outstanding
against any of the Sellers or DAP having, or which, insofar as can reasonably
be foreseen, in the future may have, a Material Adverse Effect on DAP.
2.16 Tax Matters.
(a) DAP has filed all federal, state, and local
tax reports, returns, information returns and other documents
(collectively the " Tax Returns") required to be filed with any
federal, state, local or other taxing authorities (each a "Taxing
Authority" collectively the "Taxing Authorities") in respect of all
relevant taxes, including without limitation income, premium, gross
receipts, net proceeds, alternative or add-on minimum, ad valorem,
value added, turnover, sales, use, property, personal property
(tangible and intangible), stamp, leasing, lease, user, excise, duty,
franchise, transfer, license, withholding, payroll, employment, fuel,
excess profits, occupational and interest equalization, windfall
profits, severance, and other charges (including interest and
penalties) (collectively, the "Taxes") and in accordance with all tax
sharing agreements to which the Sellers or DAP may be a party. All
Taxes required or anticipated to be paid for all periods prior to and
including the Closing Date have been paid or fully reserved against by
DAP in accordance with GAAP including any of DAP's Taxes that may be
due or claimed to be due as a result of the consummation of the
transactions contemplated by this Agreement. All Taxes which are
required to be withheld or collected by DAP have been duly withheld or
collected and, to the extent required, have been paid to the proper
Taxing Authority or properly segregated or deposited as required by
applicable laws. There are no Liens for Taxes upon any property or
assets of DAP except for liens for Taxes not yet due and payable.
Neither the Sellers nor DAP has executed a waiver of the statute of
limitations on the right of the Internal Revenue Service or any other
Taxing Authority to assess additional Taxes or to contest the income
or loss with respect to any Tax Return. The basis of any depreciable
assets, and the methods used in determining allowable depreciation
(including cost recovery), is correct
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and in compliance with the Internal Revenue Code of 1986, as amended
and the regulations thereunder (the "Code").
(b) No audit of DAP or DAP's Tax Returns by any Taxing
Authority is currently pending or threatened, and no issues have been
raised by any Taxing Authority in connection with any Tax Returns. No
material issues have been raised in any examination by any Taxing
Authority with respect to DAP which reasonably could be expected to
result in a proposed deficiency for any other period not so examined,
and there are no unresolved issues or unpaid deficiencies relating to
such examinations. The items relating to the business, properties or
operations of DAP on the Tax Returns filed by or on behalf of DAP for
all taxable years (including the supporting schedules filed
therewith), available copies of which have been supplied to the
Purchaser, state accurately the information requested with respect to
DAP and such information was derived from the books and records of
DAP.
(c) DAP has not made nor has become obligated to make,
nor will as a result of any event connected with the Closing become
obligated to make, any "excess parachute payment" as defined in
Section 280G of the Code (without regard to subsection (b)(4)
thereof).
(d) The Sellers shall cause DAP to file all Tax Returns
and reports with respect to Taxes which are required to be filed for
Tax periods ending on or before the Closing Date (a "Pre-Closing Tax
Return"), and DAP shall pay all Taxes due in respect of such
Pre-closing Tax Returns to the appropriate Taxing Authority.
2.17 Compliance with Material Laws and Regulations. DAP is
presently complying in respect of its operations, equipment, practices, real
property, plants, laboratories, structures, and other property, and all other
aspects of its business and operations, with all applicable Regulations and
Orders, including, but not limited to, Health Care Laws (as defined in Section
12.3), all Regulations relating to the safe conduct of business, environmental
protection, quality and labeling, antitrust, Taxes, consumer protection, equal
opportunity, discrimination, health, sanitation, fire, zoning, building and
occupational safety where such failure or failures would individually or in the
aggregate have a Material Adverse Effect. There are no Claims pending, nor to
the best knowledge of DAP are there any Claims threatened, nor have the Sellers
received any written notice, regarding any violations of any Regulations and
Orders enforced by any Authority claiming jurisdiction over DAP, including any
requirement of OSHA or any pollution and environmental control agency
(including air and water).
(a) Schedule 2.17(a) attached hereto sets forth all
permits, licenses, provider numbers, orders, franchises and approvals
(collectively, " Permits") from all Federal, state, local and foreign
governmental regulatory bodies held by DAP. The Permits listed on
Schedule 2.17(a) are the only Permits that are required for DAP to
conduct its business as presently conducted, except for those the
absence of which would not have any Material Adverse Effect on the
assets, financial condition, results of operations or
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future prospects of DAP. Each such Permit is in full force and
effect and, to the best of the knowledge of DAP, no suspension or
cancellation of any such Permit is threatened and there is no basis
for believing that such Permit will not be renewable upon expiration.
(b) DAP has licenses to provide health care services in
the jurisdictions set forth in Schedule 2.17(b) hereto, which such
licenses are all those necessary to conduct the business of DAP in the
jurisdictions in which DAP presently operates. Schedule 2.17(b) also
sets forth a true and complete description of the status of each such
license. Except as set forth on Schedule 2.17(b), neither the Sellers
nor DAP is aware of any event, transaction, correspondence or
circumstance which would have, or could foreseeably have, a Material
Adverse Effect on one or more of such licenses.
2.18 ERISA and Related Matters.
(a) Benefit Plans; Obligations to Employees. Except as
set forth in Schedule 2.18 hereto, neither DAP, nor any ERISA
Affiliate of DAP, is a party to or participates in or has any
liability or contingent liability with respect to:
(i) any "employee welfare benefit plan" or
"employee pension benefit plan" or "multi- employer plan" (as
those terms are respectively defined in Sections 3(1), 3(2)
and 3(37) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"));
(ii) any retirement or deferred compensation plan,
incentive compensation plan, stock plan, unemployment
compensation plan, vacation pay, severance pay, bonus or
benefit arrangement, insurance or hospitalization program or
any other fringe benefit arrangements for any employee,
director, consultant or agent, whether pursuant to contract,
arrangement, custom or informal understanding, which does not
constitute an "employee benefit plan" (as defined in Section
3(3) of ERISA); or
(iii) any employment agreement not terminable on 30
days' or less written notice, without further liability.
Any plan, arrangement or agreement required to be listed on
Schedule 2.18 for which DAP or any ERISA Affiliate of DAP may have any
liability or contingent liability is sometimes hereinafter referred to
as a "Benefit Plan". For purposes of this Section, the term "ERISA
Affiliate" shall mean any trade or business, whether or not
incorporated, that together with DAP would be deemed a "single
employer" within the meaning of Section 4001(b)(i) of ERISA.
(b) Plan Documents and Reports. A true and correct copy
of each of the Benefit Plans listed on Schedule 2.18, and all
contracts relating thereto, or to the funding
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thereof, including, without limitation, all trust agreements,
insurance contracts, investment management agreements, subscription
and participation agreements and recordkeeping agreements, each as in
effect on the date hereof, has been supplied to the Purchaser. In the
case of any Benefit Plan that is not in written form, the Purchaser
has been supplied with an accurate description of such Benefit Plan as
in effect on the date hereof. A true and correct copy of the three
most recent annual reports and accompanying schedules, the three most
recent actuarial reports, and the most recent summary plan description
and Internal Revenue Service determination letter with respect to each
such Benefit Plan, to the extent applicable, and a current schedule of
assets (and the fair market value thereof assuming liquidation of any
asset which is not readily tradeable) held with respect to any funded
Benefit Plan has been supplied to the Purchaser by DAP, and there have
been no material changes in the financial condition in the respective
Plans from that stated in the annual reports and actuarial reports
supplied.
(c) Compliance with Laws; Liabilities. As to all Benefit
Plans, except as otherwise specified on Schedule 2.18, DAP is in
compliance in all material respects with the terms of all Benefit
plans and every Benefit Plan is in material compliance with all of the
requirements and provisions of ERISA and all other laws and
regulations applicable thereto, including without limitation the
timely filing of all annual reports or other filings required with
respect to such Benefit Plans. None of the assets of any Benefit Plan
are invested in employer securities or employer real property, as
those terms are defined in Section 407(d) of ERISA. There have been
no "prohibited transactions" (as described in Section 406 of ERISA or
Section 4975 of the Code) with respect to any Benefit Plan and neither
DAP nor any ERISA Affiliate of DAP has otherwise engaged in any
prohibited transaction. There has been no "accumulated funding
deficiency" as defined in Section 302 of ERISA, nor has any reportable
event as defined in Section 4043(b) of ERISA occurred with respect to
any Benefit Plan. Actuarially adequate accruals for all obligations
or contingent obligations under the Benefit Plans are reflected in
DAP's Financial Statements provided to the Purchaser and such
obligations include a pro rata amount of the contributions which would
otherwise have been made in accordance with past practices for the
plan years which include the closing date.
2.19 Intellectual Property.
(a) DAP has no trade name, service ▇▇▇▇, patent,
copyright or trademark related to its business. There are no Claims
pending, or to the best knowledge of the Sellers, threatened, against
DAP or the Sellers that its use of any of its Proprietary Rights (as
defined in Section 12.3 herein) infringes the rights of any Person.
The Sellers have no knowledge of any conflicting use of any of such
Proprietary Rights.
(b) Except as set forth on Schedule 2.19 hereto, DAP is
not a party in any capacity to any franchise, license or royalty
agreement respecting any Proprietary Right and there is no conflict
with the rights of others in respect to any Proprietary Right
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now used in the conduct of its business.
(c) Internal Software Applications. The current software
applications used by DAP in the operation of its business are as set
forth and described on Schedule 2.19 hereto (the "Software"). To the
knowledge of DAP and the Class A Shareholders, no part of any such
Software is an imitation or copy of, or infringes upon, the software
of any other Person or violates or infringes upon any common law or
statutory rights of any other Person, including, without limitation,
rights relating to defamation, contractual rights, copyrights, trade
secrets, and rights of privacy or publicity. DAP has not sold,
assigned, licensed, distributed or in any other way disposed of or
encumbered the Software. The Software, to the extent it is licensed
from any third party licensor or constitutes "off-the-shelf" software,
is, to the knowledge of DAP and the Class A Shareholders, held by DAP
legitimately and is fully transferable to the Purchaser without any
third party consent. To the knowledge of DAP and the Class A
Shareholders, all of DAP's computer hardware has legitimately-licensed
software installed therein. To the knowledge of DAP and the Class A
Shareholders, the Software is free from any significant software
defect or programming or documentation error, operates and runs in a
reasonable and efficient business manner, conforms to the
specifications thereof, and, with respect to owned Software, the
applications can be recreated from their associated source code.
2.20 Environmental Matters. Except as disclosed in Schedule 2.20:
(a) neither DAP's business nor the operation thereof violates any applicable
Environmental Law (as defined in Section 12.3) in effect as of the date hereof
and, to the knowledge of DAP and the Class A Shareholders, no condition or
occurrence (any accident, happening or event which occurs or has occurred at
any time prior to the Closing Date, which results in or could result in a claim
against DAP or the Purchaser or creates or could create a liability or loss for
DAP or the Purchaser) which, with notice or the passage of time or both, would
constitute a violation of any Environmental Law; (b) to the knowledge of DAP
and the Class A Shareholders, (i) DAP is in possession of all Environmental
Permits (as defined in Section 12.3) required under any applicable
Environmental Law for the conduct or operation of DAP's business (or any part
thereof), and (ii) DAP is in full compliance with all of the requirements and
limitations included in such Environmental Permits; (c) DAP has not stored or
used any pollutants, contaminants or hazardous or toxic wastes, substances or
materials on or at any of its property or facilities except for inventories of
chemicals which are used or to be used in the ordinary course of DAP's business
(which inventories have been sorted or used in accordance with all applicable
Environmental Permits and all Environmental Laws, including all so-called
"Right to Know" laws); (d) DAP has not received any notice from any Authority
or any private Person that DAP's business or the operation of any of its
facilities is in violation of any Environmental Law or any Environmental Permit
or that it is responsible (or potentially responsible) for the cleanup of any
pollutants, contaminants, or hazardous or toxic wastes, substances or materials
at, on or beneath any of DAP's property, or at, on or beneath any land adjacent
thereto or in connection with any waste or contamination site; (e) to the
knowledge of DAP and the Class A
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Shareholders, DAP is not the subject of any Federal, state, local, or private
Claim involving a demand for damages or other potential liability with respect
to a violation of Environmental Laws or under any common law theories relating
to operations or the condition of any facilities or property (including
underlying groundwater) owned, leased, or operated by DAP; (f) DAP has not
buried, dumped, disposed, spilled or released any pollutants, contaminants or
hazardous or wastes, substances or materials on, beneath or adjacent to any of
its property or any property adjacent thereto; (g) no by- products of any
manufacturing or mining process employed in the operation of DAP's business
which may constitute pollutants, contaminants or hazardous or toxic wastes,
substances or materials under any Environmental Law are currently stored or
otherwise located on any of DAP's property; (h) to the knowledge of DAP and the
Class A Shareholders, no property now or previously owned, leased or operated
by DAP, is listed or proposed for listing on the National Priorities List
pursuant to CERCLA, on the CERCLIS or on any other federal or state list of
sites requiring investigation or clean-up; (i) to the knowledge of DAP and the
Class A Shareholders, there are no underground storage tanks, active or
abandoned, including petroleum storage tanks, on or under any property now or
previously owned, leased or operated by DAP; (j) DAP has not directly
transported or directly arranged for the transportation of any Hazardous
Material to any location which is listed or proposed for listing on the
National Priorities List pursuant to CERCLA, on the CERCLIS or on any federal
or state list or which is the subject of federal, state or local enforcement
actions or other investigations which may lead to material Claims against DAP
for any remedial work, damage to natural resources or personal injury,
including claims under CERCLA; and (k) to the knowledge of DAP and the Class A
Shareholders, there are no polychlorinated biphenyls, radioactive materials or
friable asbestos present at any property now or previously owned or leased by
DAP. DAP has timely filed all reports required to be filed with respect to all
of its property and facilities and has generated and maintained all required
data, documentation and records under all applicable Environmental Laws.
2.21 Dealings with Affiliates. Schedule 2.21 hereto sets forth a
complete list, including the parties, of all oral or written agreements and
arrangements to which DAP is, will be or has been a party, at any time from
January 1, 1990 to the Closing Date, and to which any one or more Affiliates is
also a party.
2.22 Banking Arrangements. Schedule 2.22 attached hereto sets
forth the name of each bank in or with which DAP has an account, credit line or
safety deposit box, and a brief description of each such account, credit line
or safety deposit box, including the names of all Persons currently authorized
to draw thereon or having access thereto. DAP has no liability or obligation
relating to funds or money borrowed by or loaned to DAP (whether under any
credit facility, line of credit, loan, indenture, advance, pledge or
otherwise).
2.23 Insurance. (a) Schedule 2.23 attached hereto sets forth a
list and brief description, including dollar amounts of coverage, of all
policies of fire, liability, professional liability and other forms of
insurance held by DAP as of the date hereof. Such policies are valid,
outstanding and enforceable policies, as to which premiums have been paid
currently. Neither DAP nor the Class A Shareholders know of any state of
facts, or of the occurrence of
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any event which might reasonably (a) form the basis for any claim against DAP
not fully covered by insurance for liability on account of any express or
implied warranty or tortious omission or commission, or (b) result in material
increase in insurance premiums of DAP.
(b) Self Insurance. DAP self-insures certain amounts in
connection with the health insurance DAP makes available to the employees of
DAP. At and as of the Closing, DAP shall have no obligation or liability with
respect to any amounts due or owing to DAP's self-insured carrier in connection
with health insurance covering employees of DAP, other than such amounts as are
expressly reserved on the balance sheet of DAP included in the 1995 Financial
Statements.
2.24 Consents. Schedule 2.24 annexed hereto sets forth a complete
list of consents of governmental and other regulatory agencies or authorities,
foreign or domestic, required to be received by or on the part of DAP and the
Sellers to enable DAP or the Sellers to enter into and carry out this Agreement
in all material respects. All such requisite consents have been, or prior to
the Closing will have been, obtained.
2.25 Investment Representations.
(a) Each Seller has been offered, and up to the Closing
Date shall be offered, the opportunity to ask questions of, and
receive answers from, AmeriPath and its Subsidiaries, and the Sellers
have been given full and complete access to all available information
and data relating to the business and assets of AmeriPath and its
Subsidiaries, have obtained such additional information about
AmeriPath and its Subsidiaries which the Sellers have deemed necessary
in order to evaluate the opportunities, both financial and otherwise,
with respect to AmeriPath and, except as set forth herein, have not
relied on any representation, warranty or other statement concerning
the Purchaser and its Subsidiaries in their evaluation of the decision
to consummate the transactions contemplated herein. On the basis of
the foregoing, each Seller is familiar with the operations, business
plans and financial condition of AmeriPath.
(b) Each Seller understands that she or he must bear the
economic risk of the purchase of the AmeriPath Stock for an indefinite
period of time because, except as provided in this Agreement, (i) each
Seller understands that AmeriPath proposes to issue and deliver the
shares of AmeriPath Stock issuable in exchange for the DAP Shares
without compliance with the registration requirements of the
Securities Act of 1933, as amended (the " Securities Act"), that for
such purpose AmeriPath will rely upon the representations, warranties,
covenants and agreements contained herein; and that such noncompliance
with registration is not permissible unless such representations and
warranties are correct and such covenants and agreements are
performed; (ii) each Seller understands that, under existing rules of
the Securities and Exchange Commission (the "SEC"), there are
substantial restrictions in the transferability of his shares of
AmeriPath Stock; his shares of AmeriPath Stock may be transferred only
if registered under the Securities Act or if an exemption from such
registration is available; Sellers may not be
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able to avail themselves of the provisions of Rule 144
promulgated by the SEC under the Securities Act with respect to the
transfer of such shares; (iii) the AmeriPath Stock may not be sold,
transferred, pledged, or otherwise disposed of without the consent of
AmeriPath and an opinion of counsel for or satisfactory to AmeriPath
that registration under the Securities Act or any applicable state
securities laws is not required; and (iv) AmeriPath neither has an
obligation to register a sale of the AmeriPath Stock held by any
Seller nor has it agreed to do so in the future.
(c) Each Seller is a sophisticated investor familiar with
the type of risks inherent in the acquisition of securities such as
the shares of AmeriPath Stock and such Seller's financial position is
such that such Seller can afford to retain his shares of AmeriPath
Stock for an indefinite period of time without realizing any direct or
indirect cash return on such Seller's investment.
(d) Each Seller received this Agreement and first learned
of the transactions contemplated hereby in Florida. Each Seller
executed and will execute all documents contemplated hereby in
Florida, and intends that the laws of Florida govern this transaction.
Each Seller is a resident of Florida.
(e) Each Seller understands, agrees and acknowledges that
the AmeriPath Stock has not been registered under the Florida
Securities Act in reliance upon exemption provisions contained therein
which AmeriPath believes are available. Any sale made pursuant to
such exemption provisions is voidable by the purchaser within three
business days after the first tender of consideration is made by the
purchaser to the issuer, an agent of the issuer or an escrow agent. A
withdrawal within such three-day period will be without any further
liability to any Person (except that the Purchase Price attributable
to such withdrawal must be returned to the Purchaser). To accomplish
this withdrawal, a purchaser need only send a letter or telegram to
AmeriPath at the address set forth herein, indicating his or her
intention to withdraw. Such letter or telegram should be sent and
postmarked prior to the end of the aforementioned third business day.
It is advisable to send such letter by certified mail, return receipt
requested, to ensure that it is received and also to evidence the date
it was mailed. If the request is made orally, in person or by
telephone, to a representative of AmeriPath, a written confirmation
that the request has been received should be requested.
(f) Each Seller is acquiring his shares of AmeriPath
Stock for such Seller's own account and not with a view to, or for
sale in connection with, the distribution thereof within the meaning
of the Securities Act.
(g) Each Seller understands that the certificates
evidencing his shares of AmeriPath Stock will bear appropriate
restrictive legends.
2.26 Accounts Receivable; Inventories. The accounts receivable of
DAP reflected in the Financial Statements and such additional accounts
receivable as are reflected on the books
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of DAP on the date hereof are good and collectible except to the extent
reserved against thereon (which reserves have been determined based upon actual
prior experience and are consistent with prior practices). All such accounts
receivable (except to the extent so reserved against) are valid, genuine and
subsisting, arise out of bona fide sales and deliveries of goods, performance
of services or other business transactions and are not subject to defenses,
set-offs or counterclaims. The inventories reflected on the balance sheets
included in the Financial Statements, and the inventories held by DAP on the
date hereof, (i) do not include any items which are not usable or saleable in
the ordinary course of business of DAP, and (ii) have been reflected on such
balance sheets at the lower of cost or market value (taking into account the
usability or salability thereof), in accordance with GAAP. All such
inventories are owned free and clear and are not subject to any Lien (other
than the Lien as a result of the indebtedness under the Loan Agreement set
forth on Schedule 2.12 hereto), except to the extent reserved against or
reflected in the Financial Statements. Since the date of the Financial
Statements, inventories of raw materials and supplies have been purchased by
DAP in the ordinary course of business, consistent with anticipated seasonal
requirements, and the volumes of purchases thereof and orders therefor have not
been reduced or otherwise changed in anticipation of the transactions
contemplated by this Agreement. DAP is not aware of any material adverse
conditions affecting the supply of materials available to DAP, and, to the best
knowledge of DAP, the consummation of the transactions contemplated hereby will
not adversely affect any such supply.
2.27 Brokerage. Neither DAP nor any Seller has employed any
broker, finder, advisor, consultant or other intermediary in connection with
this Agreement or the transactions contemplated by this Agreement who is or
might be entitled to any fee, commission or other compensation from DAP or any
Seller, or from the Purchaser or its Affiliates, upon or as a result of the
execution of this Agreement or the consummation of the transactions
contemplated hereby; provided, however, that the Sellers collectively have
engaged ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc. ("RJ&A"), to act as broker and
financial consultant in connection with the transactions contemplated by this
Agreement and, in the event the transactions contemplated by this Agreement are
consummated, RJ&A shall be entitled to a specified fee (the "Broker's Fee") to
be paid by the Sellers. The complete text of the agreement between the Sellers
and RJ&A providing for the Broker's Fee is attached hereto as Exhibit 2.27.
2.28 Improper and Other Payments. Except as set forth on Schedule
2.28 hereto, (a) neither DAP, any director, officer, employee thereof, nor, to
DAP's knowledge, any agent or representative of DAP nor any Person acting on
behalf of any of them, has made, paid or received any unlawful bribes,
kickbacks or other similar payments to or from any Person or Authority, (b) no
contributions have been made, directly or indirectly, to a domestic or foreign
political party or candidate, (c) no improper foreign payment (as defined in
the Foreign Corrupt Practices Act) has been made, and (d) the internal
accounting controls of DAP are believed by DAP's management to be adequate to
detect any of the foregoing under current circumstances.
2.29 Fraud and Abuse. To the knowledge of the Class A Shareholders
and DAP, DAP and its officers, directors, employees, shareholders and
providers, have not engaged in any activities which are prohibited under
federal Medicaid statues, 42 U.S.C. Section 1320a-7a and
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7b, or the regulations promulgated pursuant to such statutes or related state
or local statutes or regulations or which are prohibited by rules of
professional conduct or which otherwise could constitute fraud, including but
not limited to the following: (i) making or causing to be made a false
statement or representation of a material fact in any application for any
benefit or payment; (ii) making or causing to be made any false statement or
representation of a material fact for use in determining rights to any benefit
or payment; (iii) failing to disclose knowledge by a claimant of the occurrence
of any event affecting the initial or continued right to any benefit or payment
on its behalf or on behalf of another, with intent to secure such benefit or
payment fraudulently; and (iv) soliciting, paying or receiving any remuneration
(including any kickback, bribe, or rebate), directly or indirectly, overtly or
covertly, in cash or in kind or offering to pay such remuneration (a) in return
for referring an individual to a Person for the furnishing or arranging for the
furnishing of any item or service for which payment may be made in whole or in
part by Medicare or Medicaid, or (b) in return for purchasing, leasing, or
ordering or arranging for or recommending purchasing, leasing, or ordering any
good, facility, service, or item for which payment may be made in whole or in
part by Medicaid; subject, in the case of (iv) to the lack of clarity in the
law relating to the marketing of Medicare risk products by brokers.
2.30 Third-Party Payors. All Contracts with third-party payors
were entered into by DAP in the ordinary course of business. DAP will have
made available to the Purchaser, as of the Closing Date, an accurate and
complete list of all third-party payors which have agreements with DAP (as set
forth on Schedule 2.30), together with accurate and complete copies of all such
Contracts. Except as set forth on Schedule 2.30, DAP is in compliance in all
material respects with each third-party payor's Contract, and has properly
charged and billed in accordance with the terms of those Contracts, including,
where applicable, billing and collection of all deductibles and co-payments.
2.31 Compliance with Medicare and Medicaid Programs. DAP has
timely and accurately filed all requisite claims and other reports required to
be filed in connection with all state and federal Medicare and Medicaid
programs in which DAP participates due on or before the Closing Date except to
the extent that the failure to file such claims and reports would not result in
a Material Adverse Effect on DAP. There are no Claims pending or, to DAP's
knowledge, threatened or scheduled before any Authority, including without
limitation, any intermediary, carrier, the Administrator of the Health Care
Financing Administration, the Florida Department of Health and Rehabilitative
Services, the Agency for Health Care Administration or any other state or
federal agency with respect to any Medicare and Medicaid claim filed by DAP on
or before the Closing Date, or program compliance matters, which would have a
Material Adverse Effect on DAP, or its assets, the operations or utility
thereof, or the consummation of the transactions contemplated hereby. Except
for routinely scheduled reviews pursuant to DAP's Medicare and Medicaid
Contracts, no valid review or program integrity review related to DAP has been
conducted by any Authority in connection with the Medicare or Medicaid programs
and no such review is scheduled, or to DAP's knowledge, pending or threatened
against or affecting DAP, its business, assets, or the consummation of the
transactions contemplated hereby.
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2.32 Rate Limitations and Rates. Each facility currently
operated by DAP charges rates and accordingly bills for services which are
legal and proper, and DAP's standard and Medicare rates are set forth on
Schedule 2.32. Certain reimbursement rates established by third-party payors
are subject to retrospective adjustment in the ordinary course of business.
2.33 Participation in Audits. DAP has not been informed of any
Recoupment Claims (as hereinafter defined) arising in connection with audits or
reviews conducted by Medicaid, Medicare or private insurance companies. To the
best of the knowledge of DAP and the Sellers there is no basis for any
Recoupment Claims based upon cost reports, claims or bills submitted or to be
submitted in connection with services rendered by DAP. For purposes of this
Section 2.33 the term "Recoupment Claim" shall mean any recoupment or
overpayment, set-off, penalty or fine, pending or to the knowledge of DAP and
the Sellers threatened by any third-party payor or governmental authority
having jurisdiction over DAP for amounts arising from or related to payments to
DAP for services rendered prior to the Closing.
2.34 Reimbursement Documentation. To the knowledge of the Class A
Shareholders and DAP, DAP has filed when due any and all cost reports and other
documentation and reports, if any, required to be filed by third-party payors
and governmental agencies in compliance with applicable contractual provisions
and/or laws, regulations and rules.
2.35 Patient Referrals. No Person having a "financial
relationship" with DAP, as that term is defined in 42 U.S.C. Section 1395nn, is
in a position, directly or indirectly, to refer patients or services to DAP, or
any such referral complies with the requirements of 42 U.S.C. Section 1395nn
and the regulations promulgated pursuant thereto.
2.36 Financial Condition at Closing. As of March 31, 1996, DAP had
(i) cash and cash equivalents of $1,400,015, (ii) current liabilities of
$2,540,127, (iii) net working capital of $3,334,843, and (iv) book value of
$5,288,476 (all calculated and fairly presented in accordance with GAAP, except
for adjustments relating to income taxes and unbilled revenues, applied on a
consistent basis). At and as of Closing, DAP shall have (a) cash and cash
equivalents of not less than $1,310,000 (except to the extent such amount is
reduced by any Permitted Cash Payments (as defined in Section 12.3) made by DAP
prior to Closing), (b) net working capital of not less than $2,700,000, and (c)
book value of not less than $3,600,000 (all calculated and fairly presented in
accordance with GAAP, applied on a consistent basis).
2.37 Disclosure. Neither this Agreement nor any of the exhibits,
attachments, written statements, documents, certificates or other items
prepared for or supplied to the Purchaser by or on behalf of the Sellers or DAP
with respect to the transactions contemplated hereby contains any untrue
statement of a material fact or omits a material fact necessary to make each
statement contained herein or therein not misleading.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Sellers as follows:
3.1 Corporate Organization, etc. The Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation with full corporate power and authority to carry
on its business as it is now being conducted and to own, operate and lease its
properties and assets. The Purchaser is duly qualified or licensed to do
business in good standing in every jurisdiction in which the conduct of its
business, the ownership or lease of its properties, the proposed conduct of its
business or ownership or lease of its properties, or the transactions
contemplated by this Agreement, require it to be so qualified or licensed and
the failure to be so qualified or licensed would have a material adverse effect
on its business.
3.2 Subsidiaries. Other than the wholly-owned subsidiaries of the
Purchaser listed in Schedule 3.2 hereto, the Purchaser has no Subsidiaries.
3.3 Authorization, Etc. The Purchaser has full corporate power
and authority to enter into this Agreement and to carry out the transactions
contemplated hereby. The Board of Directors of the Purchaser has duly
authorized the execution, delivery and performance of this Agreement, the
Contingent Notes and the other agreements and transactions contemplated hereby,
and no other corporate proceedings on its part are necessary to authorize this
Agreement and the transactions contemplated hereby. Upon execution and
delivery of this Agreement by the parties hereto, this Agreement shall, and
upon issuance of the Contingent Notes in accordance with the provisions hereof
the Contingent Notes shall, constitute legal, valid and binding obligations of
the Purchaser, enforceable against the Purchaser in accordance with their
respective terms.
3.4 No Violation. The execution, delivery and performance by the
Purchaser of this Agreement, and all other agreements contemplated hereby, and
the fulfillment of and compliance with the respective terms hereof and thereof
by the Purchaser, do not and will not (a) conflict with or result in a breach
of the terms, conditions or provisions of, (b) result in a violation of, or (c)
require any authorization, consent, approval, exemption or other action by or
notice to any Authority pursuant to, the certificate of incorporation or
by-laws of the Purchaser, or any Regulation to which the Purchaser is subject,
or any Contract or Order to which the Purchaser or its properties are subject.
The Purchaser will comply with all applicable Regulations and Orders in
connection with its execution, delivery and performance of this Agreement and
the transactions contemplated hereby.
3.5 Governmental Authorities. The Purchaser has complied in all
material respects with all applicable Regulations in connection with its
execution, delivery and performance of this Agreement and the agreements and
transactions contemplated hereby. Except for the filings
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required pursuant to Section 6.9 hereof, the Purchaser is not required to
submit any notice, report, or other filing with any governmental authority in
connection with its execution or delivery of this Agreement or the consummation
of the transactions contemplated hereby. No authorization, consent, approval,
exemption or notice is required to be obtained by the Purchaser in connection
with the execution, delivery, and performance of this Agreement and the
agreements and transactions contemplated hereby.
3.6 Issuance of AmeriPath Stock. The shares of AmeriPath Stock to
be issued to the Sellers, as contemplated by this Agreement, have been duly and
validly authorized and, when so issued and delivered, will be duly and validly
issued, fully paid and non-assessable.
3.7 Financial Statements. Attached as Exhibit 3.7 hereto are the
following financial statements of AmeriPath: audited balance sheet and income
statement, and related notes and schedules thereto, for the fiscal years ended
December 31, 1995 and 1994 (the "Audited Financial Statements"), and (ii)
consolidated balance sheet (unaudited) and consolidated income statement
(unaudited), for the three month period ended March 31, 1996 (collectively,
together with the Audited Financial Statements, the "AmeriPath Financial
Statements"). The balance sheets included in the AmeriPath Financial
Statements fairly present the financial position of AmeriPath in accordance
with GAAP, as at the respective dates thereof, and the income statements
included in the Financial Statements (x) fairly present the results of
operations for the periods therein referred to, all in accordance with GAAP
applied on a consistent basis, and (y) fairly present the financial condition
of AmeriPath as of the respective dates and for the periods covered by, such
statements. As used in this Section 3.7 and the following Section 3.8,
"AmeriPath" means and refers to the predecessor business and operations of
AmeriPath, before AmeriPath and its subsidiaries were reorganized into a
holding company structure (which took place effective February 29, 1996).
3.8 Absence of Certain Changes. Since December 31, 1995, there
has not been (a) any Material Adverse Change (as defined in Section 12.3) in
the business, prospects, financial condition, revenues, expenses or operations
of AmeriPath, or its Subsidiaries; (b) any declaration, setting aside or
payment of any dividend or distribution (whether in cash, stock or property) in
respect of AmeriPath's capital stock, or any redemption or other acquisition
of such capital stock by AmeriPath; or (c) any change by AmeriPath in
accounting methods or principles.
3.9 Compliance with Material Laws and Regulations. AmeriPath is
presently complying in respect of its operations, equipment, practices, real
property, plants, laboratories, structures, and other property, and all other
aspects of its business and operations, with all applicable Regulations and
Orders, including, but not limited to, Health Care Laws (as defined in Section
12.3), all Regulations relating to the safe conduct of business, environmental
protection, quality and labeling, antitrust, Taxes, consumer protection, equal
opportunity, discrimination, health, sanitation, fire, zoning, building and
occupational safety where such failure or failures would individually or in the
aggregate have a Material Adverse Effect. There are no Claims pending, nor to
the best knowledge of AmeriPath are there any Claims threatened,
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nor has the Company received any written notice, regarding any violations of
any Regulations and Orders enforced by any Authority claiming jurisdiction over
AmeriPath, including any requirement of OSHA or any pollution and environmental
control agency (including air and water). AmeriPath has licenses to provide
health care services in each jurisdiction in which it currently operates.
3.10 Brokerage. AmeriPath has not employed any broker, finder,
advisor, consultant or other intermediary in connection with this Agreement or
the transactions contemplated by this Agreement who is or might be entitled to
any fee, commission or other compensation from AmeriPath, or from DAP or any
Seller, upon or as a result of the execution of this Agreement or the
consummation of the transactions contemplated hereby.
ARTICLE IV
COVENANTS OF DAP AND THE CLASS A SHAREHOLDERS
From the date hereof until the Closing, except as otherwise consented
to or approved by the Purchaser in writing, DAP covenants and agrees that it
shall act, and each Class A Shareholder shall cause DAP so to act or refrain
from acting where required hereinafter, to comply with the following:
4.1 Regular Course of Business. DAP shall operate its business
diligently and in good faith and in the ordinary and usual course, consistent
with past management practices; shall maintain all of its respective properties
in good order and condition (normal wear and tear excepted), shall maintain
(except for expiration due to lapse of time) all leases and Contracts in effect
without change except as expressly provided herein; shall comply with the
provisions of all Regulations and Orders known to DAP or the Class A
Shareholders and applicable to DAP and the conduct of its respective business;
shall not cancel, release, waive or compromise any debt, Claim or right in its
favor; shall not alter the rate or basis of compensation of any of its
officers, directors, employees or consultants; shall maintain insurance and
reinsurance coverage as in effect on the date hereof up to the Closing Date;
shall preserve the business of DAP intact, and use its best efforts to keep
available for DAP and the Purchaser the services of the officers and employees
of DAP, and to preserve the good will of clients, patients, suppliers and
others having business relations with DAP; and shall pay all valid Claims and
accrue reserves on its financial statements in DAP's customary fashion and in
accordance with industry practice. DAP shall not transfer, assign, sell or
dispose of any assets other than in the ordinary course of business, in an
arms-length transaction at fair market value.
4.2 Amendments. Except as provided in Section 4.9 hereof, no
change or amendment shall be made in the articles of incorporation or by-laws
of DAP. DAP shall not merge with or into or consolidate with any other
corporation or Person, acquire substantially all of the assets of any Person or
change the character of its business.
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4.3 Capital Changes; Pledges. Except as contemplated under this
Agreement, DAP shall not issue or sell any shares of its capital stock of any
class or issue or sell any securities convertible into, or options, warrants to
purchase or rights to subscribe to, any shares of its capital stock and DAP
shall not pledge or otherwise encumber any shares of its capital stock.
4.4 Dividends; Redemptions. So long as DAP is in full compliance
with the representations and warranties set forth in Section 2.36 hereof, DAP
shall be permitted, prior to the Closing, to declare, pay or set aside for
payment any dividend or other distribution in respect of its capital stock.
Except for the Permitted Cash Payments (as defined in Section 12.3 hereof), DAP
shall not, directly or indirectly, redeem, purchase or otherwise acquire any
shares of its capital stock.
4.5 Capital and Other Expenditures. DAP shall not make any
capital expenditures in excess of $10,000 in the aggregate, or commitments with
respect thereto.
4.6 Cash and Cash Equivalents. So long as DAP is in full
compliance with the representations and warranties set forth in Section 2.36
hereof, DAP shall be permitted, prior to the Closing, to expend cash and cash
equivalents as it deems necessary or prudent, in its sole and absolute
discretion.
4.7 Borrowing. DAP shall not incur, assume or guarantee any
indebtedness, obligations or liabilities not reflected on the Financial
Statements except in the ordinary course of business or for purposes of
consummation of the transactions contemplated by this Agreement and in any case
only after consultation with the Purchaser.
4.8 Other Commitments. Except as set forth in this Agreement,
incurred or transacted in the ordinary course of business, or permitted in
writing by the Purchaser, DAP shall not enter into any transaction or make any
commitment or incur any obligation (including entering into any real property
leases).
4.9 Amendments to Charter. Prior to the Closing, the Class A
Shareholders shall cause DAP's articles of incorporation to be amended, among
other things, to (i) change the company's name (by dropping the "P.A."
designation and adding "Inc."); (ii) provide that the company is subject to
Section 607 of the Florida Statutes (the Florida Business Corporation Act), and
not Section 621 of the Florida Statutes (the Professional Service Corporation
Act), and delete any inconsistent references, and (iii) provide that the
company may operate for any lawful purpose, and to allow Persons other than
those licensed to practice pathology in the State of Florida to own shares of
DAP's capital stock. All of such amendments (together, the "DAP Charter
Amendments") shall be in form and substance satisfactory to AmeriPath.
4.10 Interim Financial Information. DAP shall supply the Purchaser
with internally prepared, unaudited financial statements (including, without
limitation, balance sheets and statements of revenues and expenses) and
information for each calendar month, promptly following the conclusion of such
month, and as DAP may otherwise reasonably request.
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4.11 Full Access and Disclosure.
(a) DAP shall afford to the Purchaser and its counsel,
accountants and other authorized representatives reasonable access
during business hours to DAP's facilities, properties, books and
records in order that the Purchaser may have full opportunity to make
such reasonable investigations as it shall desire to make of the
affairs of DAP; and the Sellers shall cause DAP's officers, employees
and auditors to furnish such additional financial and operating data
and other information as the Purchaser shall from time to time
reasonably request including, without limitation, any internal control
recommendations applicable to DAP made by DAP's independent auditors
in connection with any examination of DAP's Financial Statements and
books and records.
(b) From time to time prior to the Closing Date, DAP
shall promptly supplement or amend information previously delivered to
the Purchaser with respect to any matter hereafter arising which, if
existing or occurring at the date of this Agreement, would have been
required to be set forth herein or disclosed.
(c) In connection with any "due diligence" examination
performed by the Purchaser with respect to the business of DAP, the
Sellers shall fully cooperate and the results of such "due diligence"
examination shall be satisfactory to the Purchaser.
4.12 Confidentiality. Each Seller and DAP shall, and shall cause
its principals, officers and other personnel and authorized representatives to,
hold in confidence, and not disclose to any other party without the Purchaser's
prior consent, all written and oral information furnished or disclosed by or
received from the Purchaser or its officers, directors, employees, agents,
counsel and auditors in connection with the transactions contemplated hereby
except as may be required by applicable law or as otherwise contemplated
herein.
4.13 Breach of Agreement. Neither any Seller nor DAP shall take
any action which, if taken on or prior to the Closing Date, would constitute a
breach of this Agreement.
4.14 Fulfillment of Conditions Precedent. DAP and the Sellers
shall use their best efforts to obtain at their expense, on or prior to the
Closing Date, all such waivers, Permits, consents, approvals or other
authorizations from third parties and Authorities, and to do all things as may
be necessary or desirable in connection with the transactions contemplated by
this Agreement in order to fully and expeditiously consummate the transactions
contemplated by this Agreement.
4.15 Purchase Price as Consideration for 100% Ownership. Each of
the Class A Shareholders expressly understands and agrees that the purchase
price consideration which the Purchaser has agreed to pay, and will pay at
Closing, pursuant to Section 1.1(b) and Section 1.2(b) hereof is in
consideration of, among other things, the purchase of 100% of the issued and
outstanding shares of capital stock of DAP and that, in the event for any
reason the Purchaser (or AmeriPath Florida), following the Closing, incurs any
damage, loss, deficiency, liability,
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obligation, commitment, cost or expense (including the fees and expenses of
counsel) resulting from, or in respect of, any effort to ensure or perfect its
ownership of 100% of the issued and outstanding shares of capital stock of DAP
(hereinafter, a "100% Ownership Expense"), then any and all such 100% Ownership
Expenses shall be the sole obligation and responsibility of the Class A
Shareholders (and not of the Purchaser or its Affiliates). The 100% Ownership
Expenses shall include, without limitation, (i) any amount required to be paid
to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D. to repurchase shares of Class A Stock or otherwise to
settle the ▇▇▇▇▇▇ Litigation, to the extent (and solely to the extent) such
amount exceeds $214,163 (i.e., the amount reserved for such payment on DAP's
balance sheet), and (ii) any fees, costs and expenses (including the fees and
expenses of counsel) incurred in connection with such repurchase, such
settlement or otherwise in connection with the ▇▇▇▇▇▇ Litigation.
ARTICLE V
COVENANTS OF THE PURCHASER
The Purchaser hereby covenants and agrees with DAP and the Sellers
that, prior to the Closing or termination of this Agreement:
5.1 Confidentiality. The Purchaser shall, and shall cause its
principals, officers and other personnel and authorized representatives to,
hold in confidence, and not disclose to any other party without the Sellers's
prior consent, all information received by it from the Sellers or DAP's
officers, directors, employees, agents, counsel and auditors in connection with
the transactions contemplated hereby except as may be required by applicable
law or as otherwise contemplated herein.
5.2 Full Access and Disclosure.
(a) The Purchaser shall afford to DAP and each Seller,
and their counsel, accountants and other authorized representatives
reasonable access during business hours to the Purchaser's facilities,
properties, books and records in order that the Sellers may have full
opportunity to make such reasonable investigations as they shall
desire to make of the affairs of the Purchaser; and the Purchaser
shall cause its officers, employees and auditors to furnish such
additional financial and operating data and other information as the
Sellers shall from time to time reasonably request including, without
limitation, any internal control recommendations applicable to the
Purchaser made by the Purchaser's independent auditors in connection
with any examination of the Purchaser's financial statements and books
and records.
(b) From time to time prior to the Closing Date, the
Purchaser shall promptly supplement or amend information previously
delivered to DAP and/or the Sellers with respect to any matter
hereafter arising which, if existing or occurring at the date of this
Agreement, would have been required to be set forth herein or
disclosed.
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(c) In connection with any "due diligence" examination
performed by DAP or the Sellers with respect to the business of the
Purchaser, the Purchaser shall fully cooperate and the results of such
"due diligence" examination shall be satisfactory to the DAP and the
Sellers. For purposes of this Section 5.2, "Purchaser" shall mean and
include AmeriPath and its Subsidiaries.
ARTICLE VI
OTHER AGREEMENTS
The parties hereto further agree, on or before the Closing Date, as
follows:
6.1 Further Assurances. Subject to the terms and conditions of
this Agreement, each of the parties hereto shall use its best efforts to take,
or cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable Regulations to consummate and
make effective the transactions contemplated by this Agreement. In furtherance
and not in limitation of the preceding sentence, the parties hereto shall use
their best efforts to cause the Closing to take place on or before June 28,
1996. If at any time after the Closing Date the Purchaser shall reasonably
consider or be advised that any further deeds, assignments or assurances in law
or in any other things are necessary, desirable or proper to vest, perfect or
confirm, of record or otherwise, in the Purchaser (or DAP, as appropriate), the
title to any property or rights of Sellers acquired or to be acquired by reason
of, or as a result of, the acquisition, the Sellers agree that the Sellers
shall execute and deliver all such proper deeds, assignments and assurances in
law and do all things necessary, desirable or proper to vest, perfect or
confirm title to such property or rights in DAP and otherwise to carry out the
purpose of this Agreement.
6.2 Agreement to Defend. In the event any action, suit,
proceeding or investigation of the nature specified in Sections 7.6 or 8.4 is
commenced, whether before or after the Closing Date, all the parties hereto
agree to cooperate and use their best efforts to defend against and respond
thereto.
6.3 Consents. Without limiting the generality of Section 6.1,
each of the parties hereto shall use their best efforts to obtain all permits,
authorizations, consents and approvals of all Persons and governmental
authorities necessary, proper or advisable in connection with the consummation
of the transactions contemplated by this Agreement prior to the Closing Date.
6.4 No Solicitation or Negotiation. Unless and until this
Agreement is terminated, neither the Sellers nor DAP through its directors,
officers, employees, representatives, agents, advisors, accountants and
attorneys shall initiate, solicit or encourage, directly or indirectly, any
inquiries or the making of any proposal with respect to, or engage in
negotiations concerning, or provide any confidential information or data to any
Person with respect to, or have any discussions with any Persons relating to,
any acquisition, business combination or purchase of
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all or any significant asset of, or any equity interest in, DAP, or otherwise
facilitate any effort or attempt to do or seek any of the foregoing, and shall
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any of the foregoing. Should DAP or any Seller be contacted with respect to
any offer, inquiry or proposal, DAP and the Sellers shall immediately advise
the Purchaser in writing of the name, address and phone number of the contact
and the nature of the inquiry.
6.5 Stock Options. Upon the Closing, AmeriPath shall grant
non-statutory options (the "Options") to purchase an aggregate of 60,000 shares
of AmeriPath Stock to the persons set forth on Schedule 6.5 attached hereto
(the "Optionees") (with the number of shares of AmeriPath Stock which each
Optionee is entitled to purchase upon exercise of such Optionee's Option as set
forth on such Schedule 6.5). As a condition to such grant and issuance, each
Optionee shall be required to enter into a Non-Qualified Stock Option Agreement
in the form of Exhibit 6.5 hereto (the "Grant Agreement"). The Options shall
vest as equally as possible over a five-year period from the date of grant and
shall have an exercise price of $15.00 per share. The Options shall be granted
pursuant to and in accordance with the AmeriPath Stock Option Plan and each
Grant Agreement and shall be subject to the terms and conditions of such plan
and agreement.
6.6 No Termination of Sellers' Obligations by Subsequent
Incapacity, Etc. Each Seller specifically agrees that the obligations of such
Seller hereunder, including, without limitation, obligations pursuant to
Article XI and Section 6.4 shall not be terminated by the death or incapacity
of any Seller.
6.7 Employment Agreements. DAP and the Sellers shall, immediately
prior to the Closing, terminate, or cause the termination of, the existing
employment agreements between DAP and (1) each Seller, and (2) each physician
employee who is not a Seller. DAP and the Sellers shall use there best efforts
to ensure that all Class B Persons participate in the transactions contemplated
by this Agreement (including entering into an appropriate form of employment
agreement with AmeriPath Florida at the Closing). At the Closing, (i) ▇▇▇▇ ▇.
▇▇▇▇▇▇, M.D. and each of the Class A Shareholders (other than ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, M.D. and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.) shall enter into an employment
agreement with AmeriPath Florida in the form of Exhibit 6.7(a) attached hereto
(and, as appropriate and applicable, in accordance with the instructions
contained therein), (ii) each of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D. and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
M.D. shall enter into an employment agreement with AmeriPath Florida in the
form of Exhibit 6.7(b) attached hereto, (iii) each of the Class B Shareholders
(other than ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇) shall enter into an employment agreement with
AmeriPath Florida in the form of Exhibit 6.7(c) attached hereto, (iv) ▇▇▇▇▇
▇▇▇▇▇▇, M.D., and each other Person (other than ▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.) who is
presently a physician employee (but not a shareholder) of DAP, shall enter into
an employment agreement with AmeriPath Florida in the form of Exhibit 6.7(d)
attached hereto, and (v) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall enter into an employment
agreement with AmeriPath Florida in the form of Exhibit 6.7(e) attached hereto.
The employment agreements
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which the Sellers and the other physician employees are required to enter into
pursuant to this Section 6.7 are referred to herein as the "Employment
Agreements".
6.8 Public Announcements. Neither any Seller, DAP nor the
Purchaser nor any Affiliate, representative or shareholder of either of such
Persons, shall disclose any of the terms of this Agreement to any third party
(other than the Purchaser's advisors and senior lending group and the Seller's
advisors) without the other party's prior written consent unless required by
any applicable law. The form, content and timing of all press releases, public
announcements or publicity statements (except for any disclosures under or
pursuant to Federal or State securities laws in connection with the
registration of AmeriPath's securities or otherwise) with respect to this
Agreement or the transactions contemplated hereby shall be subject to the prior
approval of both (i) a majority of the Sellers and (ii) the Purchaser.
6.9 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act. Promptly upon execution of this
Agreement, each of DAP and the Purchaser shall promptly file such Notification
and Report Forms and related material as may be required to be filed with the
Federal Trade Commission and the Antitrust Division of the United States
Department of Justice under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
▇▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇"), shall use its best efforts to obtain an early termination
of the applicable waiting period, and shall make any further filings or
information submissions pursuant thereto that may be necessary, proper or
advisable. The Purchaser shall pay all fees, costs and expenses incurred in
connection with compliance under the HSR Act.
6.10 DAP Stockholders' Agreement. Effective upon the Closing,
without any further action on the part of any Person, the DAP Stockholders'
Agreement shall immediately and automatically be canceled, terminated and be of
no further force and effect.
The parties' hereto further agree, from and after the Closing Date, as
follows:
6.11 AmeriPath's Board of Directors. As of the Closing, AmeriPath
agrees to allow for two additional members of its Board of Directors to be
elected and appointed to the Board. The Sellers hereby designate ▇▇▇▇ ▇▇▇▇▇,
M.D. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, M.D. to serve as directors of AmeriPath, and
AmeriPath agrees to cause its existing Board of Directors to appoint and elect
▇▇▇▇ ▇▇▇▇▇, M.D. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, M.D. (the "Initial DAP Nominees")
as members of the Board of Directors of AmeriPath, effective as of the Closing.
In the event either such Initial DAP Nominee is unwilling or unable to serve as
a director of AmeriPath, the holders of a majority of the AmeriPath Stock then
held by the Sellers shall be entitled to designate a replacement to such
nominee, who must be a Class A Shareholder reasonably acceptable to AmeriPath
(the "Replacement DAP Nominee(s)"). Such Initial Dap Nominees (or, as
applicable, Replacement DAP Nominee(s)) shall be entitled to serve as members
of the AmeriPath Board of Directors, in accordance with the By- Laws of
AmeriPath, until the earlier of (i) such time as the Sellers collectively hold
less than 51% of the shares of AmeriPath Stock held by them on the Closing
Date, and (ii) such time as the AmeriPath Shareholders' Agreement terminates or
is no longer in effect.
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6.12 Deliveries After Closing. From time to time after the
Closing, at the Purchaser's request and without expense to DAP and without
further consideration from the Purchaser or DAP, the Sellers shall execute and
deliver such other instruments of conveyance and transfer and take such other
action as the Purchaser reasonably may require to convey, transfer to and vest
in the Purchaser, and to put the Purchaser in possession of, any rights or
property to be sold, conveyed, transferred or delivered hereunder.
6.13 Non-Competition Covenant. (a) As a material and valuable
inducement for the Purchaser to enter into this Agreement, pay and deliver the
Purchase Price consideration and consummate the transactions provided for
herein, during the "Restricted Period" (as hereinafter defined), each Class A
Shareholder (for purposes of this Section 6.13, a "Restricted Party") agrees
that he or she shall not, directly or indirectly, alone or as a partner,
officer, director, employee, consultant, agent, independent contractor, member
or stockholder of any Person:
(i) engage in the practice of pathology within
the Counties of Orange, Seminole, Osceola, Lake, Volusia, Palm Beach,
Broward, Dade, Pinellas, ▇▇▇▇▇▇, St. Lucie or Polk in the State of
Florida, or in any other County in any State in which AmeriPath or any
Affiliate of AmeriPath is then doing business or providing services
(the "Restricted Territory"); or
(ii) from any facility or location, whether
within or without the Restricted Territory, (x) perform pathology
services for any patient, laboratory or health care provider located
in the Restricted Territory or (y) perform pathology services for any
patient, laboratory or health care provider who is or was (within six
(6) months of the date in question) a customer, client or patient of
AmeriPath or any Affiliate of AmeriPath; except that it shall not be a
violation of this Section 6.13 for the Restricted Party to perform
pathology services in the Restricted Territory during the Restricted
Period (a) as an employee of a local, federal or state government or
agency; (b) in performing the Restricted Party's duties as a member of
the United States military services or the National Guard; or (c) on a
locum tenens basis.
provided, however, that, for purposes of this Section 6.13(a), the term
"Affiliate" shall not mean or include any Acquiring Person Affiliate (as such
term is defined in Section 12.3 hereof).
(b) As used in this Agreement, the term "Restricted
Period" shall mean and include the longer of (x) a period of five (5) years
from the Closing to the fifth (5th) anniversary of the Closing (the "5-Year
Restriction"), and (y) during such time as the Restricted Party is employed by
AmeriPath Florida or by AmeriPath or any Affiliate of AmeriPath (each, an
"AmeriPath Entity") and for a period of two (2) years following the effective
date of any termination of such Restricted Party's employment with any such
AmeriPath Entity (regardless of the cause, reason or justification of any such
termination); provided, however, that
(i) in the event of a termination of a Restricted
Party's employment under such party's Employment Agreement (as such
term is defined in Section 6.7 hereof)
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by the employer without "cause" (as such term is defined under
such party's Employment Agreement), then:
(A) the 5-Year Restriction shall be
voided and shall not apply to such Restricted Party; and
(B) the Physician Employment Committee
(as such term is defined in Section 6.13(d) below), in its
sole and absolute discretion, may, in connection with its
termination deliberation, reduce the Restricted Period to not
less than a period of one (1) year from the effective date of
the Restricted Party's termination of employment with the
AmeriPath Entity; or
(ii) in the event of a termination of a Restricted
Party's employment under such party's Employment Agreement by the
employer without "cause" (as such term is defined under such party's
Employment Agreement), if the AmeriPath Entity employer fails to make
payment of the amount(s), if any, required to be paid to such
Restricted Party upon a termination without "cause", and such failure
shall continue uncured for a period of more than thirty (30) days
following notice from the Restricted Party, then the Restricted Period
shall be a period of zero (0) days; or
(iii) in the event AmeriPath fails to pay the amount
of principal or interest which becomes and is due and payable under a
Contingent Note held by a Restricted Party, and such failure shall
continue uncured for a period of more than thirty (30) days, in the
case of a principal payment, or more than forty (40) days, in the case
of an interest payment, then the Restricted Period shall be a period
of zero (0) days.
(c) The Restricted Party further agrees that during the
Restricted Period which follows any termination of the Restricted Party's
employment with any AmeriPath Entity, the Restricted Party will not knowingly,
directly or indirectly, (a) solicit the employment of any employee, agent or
consultant of any AmeriPath Entity who was such at any time during the twelve
(12) months preceding the Restricted Party's termination of employment with the
AmeriPath Entity, or (b) induce any employee of an AmeriPath Entity to leave
the employ of any such AmeriPath Entity, unless in each case the Employee
obtains the prior written consent of AmeriPath.
(d) For purposes of this Agreement, "Physician Employment
Committee" shall mean and include a committee consisting of (i) two
Orlando-Based Pathologists (as such term is defined in Section 1.3(c) hereof)
and (ii) one physician, who is an employee of an AmeriPath Entity, appointed
and designated by the Board of Directors of AmeriPath. The two Orlando-Based
Pathologists initially (and so long as each is employed by an AmeriPath Entity)
shall be ▇▇▇▇ ▇▇▇▇▇, M.D. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, M.D., provided, however,
the Restricted Party shall not be a member of the Physician Employment
Committee. Should either ▇▇▇▇ ▇▇▇▇▇, M.D. or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, M.D., or
both of them, no longer be able to serve on the Physician Employment Committee,
a majority of the Orlando-Based Pathologists may designate
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one or both (as the case may be) replacement Orlando-Based Pathologists to
serve on the Physician Employment Committee, one of which must (to the extent
possible) be the Medical Director.
(e) Each Seller covenants and agrees that the
restrictions set forth in this Section 6.13 are fair, reasonable and necessary
to protect the interests of AmeriPath and its Affiliates, such restrictions
were negotiated and bargained for and the consideration delivered in connection
with this Agreement reflects and assumes the each Restricted Party's strict
compliance with, and the enforceability by the Purchaser of, these
restrictions.
(f) Each Seller acknowledges and agrees that the
provisions of Section 6.13 and Section 6.14 are extremely material and of the
essence to this Agreement. In addition, if the scope of any restriction or
covenant contained in either such Section should be or become too broad or
extensive to permit enforcement thereof to its fullest extent, then such
restriction or covenant shall be enforced to the maximum extent permitted by
law, and the Seller hereby consents and agrees that (a) it is the parties
intention and agreement that the covenants and restrictions contained herein be
enforced as written, and (b) in the event a court of competent jurisdiction
should determine that any restriction or covenant contained herein is too broad
or extensive to permit enforcement thereof to its fullest extent, the scope of
any such restriction or covenant may be modified accordingly in any judicial
proceeding brought to enforce such restriction or covenant, but should be
modified to permit enforcement of the restrictions and covenants contained
herein to the maximum extent the court, in its judgment, will permit.
6.14 Non-disclosure; Confidentiality.
(a) Confidential Information. By virtue of each Seller's
employment, association or involvement with an AmeriPath Entity, each Seller
may obtain confidential or proprietary information developed, or to be
developed, by an AmeriPath Entity. "Confidential Information" means all
information, whether in oral, written, graphic, machine- readable or tangible
form, and whether or not registered, and including all notes, plans, records,
documents and other evidence thereof, including but not limited to all:
patents, patent applications, copyrights, trademarks, trade names, service
marks, service names, "know-how," patient lists, details of client or
consulting contracts, pricing policies, operational methods, marketing plans or
strategies, product development techniques or plans, procurement and sales
activities, promotion and pricing techniques, credit and financial data
concerning customers, business acquisition plans or any portion or phase of any
scientific or technical information, discoveries, computer software or programs
used or developed in whole or in part by any AmeriPath Entity (including source
or object codes), processes, procedures, formulas or improvements of any
AmeriPath Entity; algorithms; computer processing systems and techniques; price
lists; customer lists; procedures; improvements, concepts and ideas; business
plans and proposals; technical plans and proposals; research and development;
budgets and projections; technical memoranda, research reports, designs and
specifications; new product and service developments; comparative analyses of
competitive products, services and operating procedures; and other information,
data and documents now existing or later acquired by an AmeriPath Entity,
regardless of whether any
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of such information, data or documents qualify as a "trade secret" under
applicable Federal or State law. All such information is collectively referred
to as the "Confidential Information".
(b) Non-Disclosure. Each Seller agrees that, except as
directed by such Seller's employer, he or she will not at any time (during the
term of such Seller's employment by an AmeriPath Entity or at any time
thereafter), except as may be expressly authorized by the AmeriPath Entity in
writing, disclose to any Person or use any Confidential Information whatsoever
for any purpose whatsoever, or permit any Person whatsoever to examine and/or
make copies of any reports or any documents or software (whether in written
form or stored on magnetic, optical or other mass storage media) prepared by
him or that come into his possession or under his control by reason of his
employment by an AmeriPath Entity or by reason of any consulting or software
development services he has performed or may in the future perform for an
AmeriPath Entity which contain or are derived from Confidential Information.
Each Seller further agrees that while employed at an AmeriPath Entity, no
Confidential Information shall be removed from the AmeriPath Entity's business
premises, without the prior written consent of such AmeriPath Entity.
(c) AmeriPath Group Property. As used in this Agreement,
the term "AmeriPath Group Property" means all documents, papers, computer
printouts and disks, records, customer or patient lists, files, manuals,
supplies, computer hardware and software, equipment, inventory and other
materials that have been created, used or obtained by any AmeriPath Entity, or
otherwise belonging to any AmeriPath Entity, as well as any other materials
containing Confidential Information as defined above. Each Seller recognizes
and agrees that:
(i) All the AmeriPath Group Property shall be and
remain the property of the AmeriPath Entity to which such belongs;
(ii) Each Seller will preserve, use and hold the
AmeriPath Group Property only for the benefit of AmeriPath and its
Affiliates and to carry out the business of the AmeriPath Entity,
AmeriPath and its Affiliates; and
(iii) When any Seller's employment is terminated,
such Seller will immediately deliver and surrender to the AmeriPath
Entity all the AmeriPath Group Property, including all copies,
extracts or any other types of reproductions, which such Seller has in
his possession or control.
6.15 Rule 144 Best Efforts. Following such time, if any, that
AmeriPath is or may become, and while AmeriPath is, a public company with its
securities registered under the Securities Act, and listed or quoted for
trading by a national securities exchange or inter-dealer quotation system,
AmeriPath will use its best efforts to see that AmeriPath is in compliance with
the requirements of Rule 144 under the Securities Act applicable to the issuer
of securities, so as to facilitate non-registered sales of AmeriPath Stock by
the Sellers who then own AmeriPath Stock consistent with the requirements and
limitations of Rule 144. Such efforts to comply with
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Rule 144 shall include, without limitation, AmeriPath's best efforts to (x) see
that all periodic public reports (e.g., Forms 10-K, 10-Q and 8- K) that may be
required to be filed under the Securities Exchange Act of 1934 are timely filed
with the Securities and Exchange Commission, (y) provide opinion(s) of counsel
to AmeriPath, at AmeriPath's expense, based upon representations of the selling
shareholder, confirming that the requirements of Rule 144 have been met
(assuming that they have been met), and (y) cooperate with reasonable requests
of brokers in mechanically facilitating any such sales. Nothing in this
Section 6.15 shall be deemed as either (i) any representation or warranty
that Ameripath will become a public company with securities registered under
the Securities Act, or (ii) any covenant or agreement by AmeriPath to register,
under federal or state securities laws or otherwise, any AmeriPath securities
issued to, or held by, the Sellers.
6.16 Post-Closing Merger of Entities. Immediately following the
Closing, (i) DAP shall be and become a wholly-owned subsidiary of AmeriPath,
and (ii) such wholly-owned subsidiary shall be merged with and into AmeriPath
Florida, a wholly-owned subsidiary of AmeriPath, with AmeriPath Florida
surviving such merger. The parties hereto agree to take such actions, execute
and deliver such instruments and agreements and file such documents as may be
necessary or appropriate to cause such merger to be effected as promptly as
practicable following the Closing.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER
Each and every obligation of the Purchaser under this Agreement shall
be subject to the satisfaction, on or before the Closing Date, of each of the
following conditions, unless waived in writing by the Purchaser:
7.1 Representations and Warranties; Covenants and Agreements. The
representations and warranties of the Sellers contained in Article II and
elsewhere in this Agreement and all information contained in any exhibit,
certificate, annex, schedule or attachment hereto or in any writing delivered
by, or on behalf of, the Sellers or DAP to the Purchaser, shall be true and
correct when made and shall be true and correct in all material respects on the
Closing Date as though then made, except as expressly provided herein. The
Sellers and DAP shall have performed and complied with all agreements,
covenants and conditions and shall have made all deliveries required by this
Agreement to be performed, delivered and complied with by them prior to the
Closing Date. Each of the Class A Shareholders and the president of DAP shall
have executed and delivered to the Purchaser a certificate, dated the Closing
Date, certifying to the foregoing.
7.2 No Injunction. No preliminary or permanent injunction or
other Order, decree or ruling issued by any Authority, or any Regulation
promulgated or enacted by any Authority
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shall be in effect, which would prevent the consummation of the transactions
contemplated hereby.
7.3 HSR Act. The waiting period applicable to the transactions
contemplated by this Agreement under the HSR Act shall have been terminated or
shall have expired.
7.4 Third Party Consents. The Purchaser, the Sellers and DAP
shall have obtained all consents, approvals, waivers or other authorizations
with respect to the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby, such that the
contracts and leases listed in Schedule 7.4 hereto shall remain in effect
(without default, acceleration, termination, assignment, right of termination
or assignment, payment, increase in rates or compensation payable, penalty,
interest or other adverse effect) from and after the Closing Date as such
contracts and leases operated and were in effect before the Closing Date.
7.5 Regulatory Approvals. The Federal and State regulatory
agencies or authorities listed in Schedule 7.5 hereto shall have approved the
applications listed in such Schedule with respect to the change of control
represented by the transactions contemplated by this Agreement, and such
approval shall not impose financial obligations on the Purchaser that are
objectionable to it.
7.6 No Material Adverse Change. There shall have been no Material
Adverse Change since the date of this Agreement. The Purchaser shall have
received a certificate (which shall be addressed to the Purchaser), dated the
Closing Date, of the president and chief financial officer of DAP, certifying
to the foregoing.
7.7 Stock Options and Grant Agreements. Each Optionee who is a
Class B Shareholder shall have executed and delivered to the Purchaser a Grant
Agreement in the form of Exhibit 6.5 hereto, among other things, entitling such
Optionee, pursuant to the terms of such Grant Agreement (and the AmeriPath
Stock Option Plan), to purchase upon exercise of such Optionee's option in
accordance with its terms the number of shares of AmeriPath Stock specified in
such Schedule 6.5 with respect to such Optionee.
7.8 Employment Agreements. DAP and the Sellers shall have
terminated the employment agreements between DAP and (1) each Seller and (2)
each physician employee who is not a Seller. Each of the following persons (or
group of persons, as the case may be) shall have executed and delivered to the
Purchaser an employment agreement with AmeriPath Florida in the form indicated
below: (i) ▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D. and each of the Class A Shareholders (other
than ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D. and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.) -- form of
employment agreement attached as Exhibit 6.7(a) (as appropriate and applicable,
in accordance with the instructions contained therein), (ii) each of ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, M.D. and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D. -- form of employment agreement
attached as Exhibit 6.7(b), (iii) each of the Class B Shareholders (other than
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇) -- form of employment agreement attached as Exhibit 6.7(c),
(iv) ▇▇▇▇▇ ▇▇▇▇▇▇, M.D., and each other physician employee who is not a Seller
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(other than ▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.) -- form of employment agreement attached as
Exhibit 6.7(d), and (v) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ -- form of employment agreement
attached as Exhibit 6.7(e).
7.9 Opinion of Seller's Counsel. The Purchaser shall have
received an opinion of counsel to the Sellers and DAP (which will be addressed
to the Purchaser), dated the Closing Date, in substantially the form of Exhibit
7.9 hereto.
7.10 Delivery of DAP Share Certificates. Each of the Sellers shall
have executed this Agreement, or a counterpart hereof, and the Sellers together
shall have delivered at the Closing stock certificates representing all of the
DAP Shares, duly endorsed for transfer to the Purchaser for transfer, together
with stock powers duly executed in blank.
7.11 Shareholders' Agreement. At the Closing, each Seller shall
have executed and delivered a counterpart signature page to that certain
Shareholders' Agreement, dated as of February 29, 1996, by and among AmeriPath
and each of the stockholders of AmeriPath (the "Shareholders' Agreement"), a
copy of which Shareholders' Agreement is attached hereto as Exhibit 7.11. Each
Seller agrees to be bound by all of the provisions of the Shareholders'
Agreement, in accordance with their terms, to the same extent as if he or she
had been an original signatory thereto (and a holder of Common Stock other than
an Original Common Shareholder).
7.12 Creditor Consents. ▇▇▇▇▇▇▇ Bank of Central Florida, N.A.
("▇▇▇▇▇▇▇ Bank") shall have agreed in writing with DAP as to the amounts owed
in order for such creditors to have been paid in full and to release all Liens
in favor of such creditors. DAP shall have obtained from ▇▇▇▇▇▇▇ Bank, and
shall provide at Closing to the Purchaser, such UCC termination statements,
releases of mortgages and other releases of Liens as shall be required by the
Purchaser and its lenders.
7.13 DAP Charter Amendments. DAP, which as of the date hereof is
organized as a professional service corporation under Chapter 621 of the
Florida Statutes, shall have taken all appropriate and required board of
director and shareholder action to approve, and shall have filed with the
Florida Department of State in form acceptable for filing, an amendment to
DAP's articles of incorporation, which amendment (i) shall be in form and
substance satisfactory to AmeriPath, and (ii) shall include the DAP Charter
Amendments (as such term is defined in Section 4.9 hereof).
7.14 Subordination Agreement. At the Closing, each of the Class A
Shareholders and Class B Shareholders shall have executed and delivered a
counterpart signature page to the Subordination Agreement, pursuant to which
each agrees to be bound by all of the provisions of the Subordination Agreement
in accordance with their terms.
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ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF THE SELLERS
Each and every obligation of the Sellers under this Agreement shall be
subject to the satisfaction, on or before the Closing Date, of each of the
following conditions unless waived in writing by the Sellers:
8.1 Representations and Warranties; Performance. The
representations and warranties of the Purchaser contained in Article III and
elsewhere in this Agreement and all information contained in any exhibit,
schedule, annex or attachment hereto, the Purchaser, to the Sellers, shall be
true and correct when made and shall be true and correct in all material
respects on the Closing Date as though then made, except as expressly provided
herein. The Purchaser shall have performed and complied with all agreements,
covenants and conditions required by this Agreement to be performed and
complied with by them prior to the Closing Date. The president of the
Purchaser shall have delivered to the Sellers a certificate, dated the Closing
Date, certifying to the foregoing.
8.2 No Injunction. No preliminary or permanent injunction or
other Order, decree or ruling issued by any Authority, or any Regulation
promulgated or enacted by any Authority shall be in effect, which would prevent
the consummation of the transactions contemplated hereby.
8.3 Purchase Consideration. Each Seller shall have received the
consideration (in the form of cash, AmeriPath Stock and/or Contingent Notes) to
which such Seller is entitled pursuant to Section 1.1 or Section 1.2 (and as
indicated in Schedule 1.1 or Schedule 1.2) hereof.
8.4 Stock Options and Grant Agreements. The Purchaser shall have
executed and delivered to each Optionee who is a Class B Shareholder a Grant
Agreement in the form of Exhibit 6.5 hereto, among other things, entitling such
Optionee, pursuant to the terms of such Grant Agreement (and the AmeriPath
Stock Option Plan), to purchase upon exercise of such Optionee's option in
accordance with its terms the number of shares of AmeriPath Stock specified in
such Schedule 6.5 with respect to such Optionee.
8.5 HSR Act. The waiting period applicable to the transactions
contemplated by this Agreement under the HSR Act shall have been terminated or
shall have expired.
8.6 Third Party Consents. The Purchaser, the Sellers and DAP
shall have obtained all consents, approvals, waivers or other authorizations
with respect to the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby, such that the
contracts and leases listed in Schedule 7.4 hereto shall remain in effect
(without default, acceleration, termination, assignment, right of termination
or assignment, payment, increase in rates or compensation payable, penalty,
interest or other adverse effect)
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from and after the Closing Date as such contracts and leases operated and were
in effect before the Closing Date.
8.7 Regulatory Approvals. The Federal and State regulatory
agencies or authorities listed in Schedule 7.5 hereto shall have approved the
applications listed in such Schedule with respect to the change of control
represented by the transactions contemplated by this Agreement.
8.8 Employment Agreements; Guaranty. AmeriPath Florida shall have
executed and delivered to each of the following persons (or group of persons,
as the case may be) an employment agreement with AmeriPath Florida in the
appropriate form indicated below: (i) ▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D. and each of the
Class A Shareholders (other than ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D. and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, M.D.) -- form of employment agreement attached as Exhibit 6.7(a) (as
appropriate and applicable, in accordance with the instructions contained
therein), (ii) each of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D. and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D. --
form of employment agreement attached as Exhibit 6.7(b), (iii) each of the
Class B Shareholders (other than ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇) -- form of employment
agreement attached as Exhibit 6.7(c), (iv) ▇▇▇▇▇ ▇▇▇▇▇▇, M.D., and each other
physician employee who is not a Seller (other than ▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.) --
form of employment agreement attached as Exhibit 6.7(d), and (v) ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ -- form of employment agreement attached as Exhibit 6.7(e). AmeriPath
shall have executed and delivered to the Sellers the Guaranty in the form of
Exhibit 8.8 attached hereto (the "AmeriPath Guaranty").
8.9 Opinion of Purchaser's Counsel. The Purchaser shall have
received an opinion of counsel to the Purchaser (which will be addressed to the
Seller), dated the Closing Date, in substantially the form of Exhibit 8.9
hereto.
8.10 Approval of AmeriPath Preferred Shareholders. The Preferred
Shareholders (as such term is defined and used in the AmeriPath Shareholders
Agreement) shall have executed and delivered to the Sellers the Approval
Certificate in the form of Exhibit 8.10 attached hereto, evidencing such
Preferred Shareholders approval, and agreement to honor, the provision
contained in Section 6.13 hereof regarding the right of Initial Dap Nominees
(or, as applicable, Replacement DAP Nominee(s)) to serve as members of the
AmeriPath Board of Directors.
ARTICLE IX
CLOSING
9.1 Closing. Unless this Agreement shall have been terminated or
abandoned pursuant to the provisions of Article X hereof, a closing of the
transactions contemplated by this Agreement (the "Closing") shall be held on or
before June 28, 1996 (if the conditions to closing set forth in Article VII and
Article VIII hereof have been satisfied or waived by such date), or on such
other date which is mutually agreed upon in writing following the satisfaction
or waiver of the conditions to closing set forth in Article VII and Article
VIII hereof (the "Closing Date").
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9.2 Closing Deliveries. At the Closing,
(a) the Sellers and DAP shall deliver or cause to be delivered
to the Purchaser:
(i) a certificate or certificates evidencing all
of the DAP Shares, duly endorsed for transfer with all
necessary transfer stamps affixed;
(ii) copies of all consents and approvals required by
Sections 7.4 and 7.5;
(iii) the Opinion of Counsel required by Section 7.9;
(iv) the Officers' Certificates required by Section
7.1 and 7.6;
(v) the UCC termination statements, releases of
mortgages or other releases of Liens required by Section 7.12;
(vi) a certificate, signed by the secretary of
DAP, as to the articles of incorporation and by-laws of DAP,
the resolutions adopted by the board of directors and
shareholders of DAP in connection with this Agreement, the
incumbency of certain officers of DAP and the jurisdictions in
which DAP is qualified to conduct business, in form acceptable
to the Purchaser.
(vii) certificates issued by the appropriate
governmental authorities evidencing the good standing, with
respect to both the conduct of business and the payment of all
franchise taxes, of DAP as of a date not more than 10 days
prior to the Closing Date, as a corporation organized under
the laws of the State of Florida and as a foreign corporation
authorized to do business under the laws of the various
jurisdictions where it is so qualified.
(viii) the Employment Agreements required by Section
7.8;
(ix) the Grant Agreements required by Section 7.7;
(x) the counterpart signature pages to the
Shareholders' Agreement required by Section 7.11;
(xi) executed counterpart signature pages to the
Subordination Agreement required by Section 7.14; and
(xii) such other certified resolutions, documents and
certificates as are reasonably required to be delivered by any
Seller or DAP pursuant to the provisions of this Agreement.
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(b) The Purchaser shall deliver to the Sellers:
(i) the consideration (in the form of cash,
AmeriPath Stock and Contingent Notes, as appropriate) required
to be paid or delivered to each such Seller in accordance with
Section 1.1 or Section 1.2 hereof.
(ii) the Officers' Certificate required by Section
8.1; and
(iii) copies of all consents and approvals required
by Sections 8.6 and 8.7;
(iv) the Opinion of Counsel required by Section 8.9;
(v) the Employment Agreements required by Section
8.8;
(vi) the Grant Agreements, executed and delivered by
the Purchaser, referred to in Section 8.4;
(vii) the AmeriPath Guaranty, executed and
delivered by the Purchaser, referred to in Section 8.8;
(viii) copies of the Articles of Incorporation,
Bylaws and organizational consent of AmeriPath Florida; and
(ix) such other certified resolutions, documents
and certificates as are reasonably required to be delivered by
the Purchaser pursuant to the provisions of this Agreement.
ARTICLE X
TERMINATION AND ABANDONMENT
10.1 Methods of Termination. This Agreement may be terminated and
the transactions herein contemplated may be abandoned at any time:
(a) by mutual consent of the Purchaser, the Sellers and DAP;
(b) by the Purchaser or a majority of the Class A
Shareholders and DAP if this Agreement is not consummated on or before
August 15, 1996; provided, however, that if any party has breached or
defaulted with respect to its respective obligations under this
Agreement on or before such date, such party may not terminate this
Agreement pursuant to this Section 10.1(b), and each other party to
this Agreement shall at its option
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enforce its rights against such breaching or defaulting party
and seek any remedies against such party, in either case as provided
hereunder and by applicable law;
(c) by the Purchaser if as of the Closing Date (including
any extensions) any of the conditions specified in Article VII hereof
shall not have been satisfied by the Sellers or by DAP or if DAP or
any of the Sellers is otherwise in default under this Agreement; or
(d) by a majority of the Class A Shareholders and DAP if
as of the Closing Date (including any extensions) any of the
conditions specified in Article VIII hereof shall not have been
satisfied by the Purchaser or if the Purchaser is otherwise in default
under this Agreement.
10.2 Procedure Upon Termination. In the event of termination and
abandonment pursuant to Section 10.1 hereof, and subject to the proviso
contained in Section 10.1(b), this Agreement shall terminate and shall be
abandoned, without further action by any of the parties hereto. If this
Agreement is terminated as provided herein:
(a) each party shall redeliver all documents and other
material of any other party relating to the transactions contemplated
hereby, whether obtained before or after the execution hereof, to the
party furnishing the same;
(b) all information received by any party hereto with
respect to the business of any other party or DAP (other than
information which is a matter of public knowledge or which has
heretofore been or is hereafter published in any publication for
public distribution or filed as public information with
any governmental authority) shall not at any time be used for the
advantage of, or disclosed to third parties by, such party to the
detriment of the party furnishing such information; and
(c) no party hereto shall have any further liability or
obligation to any other party under or in connection with this
Agreement.
ARTICLE XI
SURVIVAL; INDEMNIFICATION
11.1 Survival. All of the terms and conditions of this Agreement,
together with the representations, warranties and covenants contained herein or
in any instrument or document delivered or to be delivered pursuant to this
Agreement, shall survive the execution of this Agreement and the Closing
notwithstanding any investigation heretofore or hereafter made by or on behalf
of any party hereto; provided, however, that (a) the agreements and covenants
set forth in this Agreement shall survive and continue until all obligations
set forth therein shall have
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been performed and satisfied; and (b) all representations and warranties shall
survive and continue until:
(1) with respect to the representations and warranties in
Sections 2.16 (tax matters), 2.18 (ERISA matters) and
2.20 (environmental matters), until sixty (60) days
following the expiration of the applicable statute of limitations;
(2) with respect to the representations and warranties in
Sections 2.3 (capitalization), 2.4 (title to the DAP Shares) and 2.6
(options and rights on capital stock), these representations shall
survive and continue forever and without limitation; and
(3) with respect to all other representations and
warranties, the date upon which AmeriPath receives from its outside
auditors the audited financial statements for AmeriPath's fiscal year
ending December 31, 1998 (the "1998 Audit Date"), except for
representations, warranties and indemnities for which an
indemnification Claim shall be pending as of the 1998 Audit Date, in
which event such indemnities shall survive with respect to such Claim
until the final disposition thereof.
11.2 Indemnification by the Class A Shareholders. Subject to this
Article XI, the Purchaser and its officers, directors, employees, shareholders,
representatives and agents shall be indemnified and held harmless by the Class
A Shareholders, jointly and severally, at all times after the date of this
Agreement, against and in respect of any and all actual damage, loss,
deficiency, liability, obligation, commitment, cost or expense (including the
fees and expenses of counsel) resulting from, or in respect of, any of the
following:
(a) Any misrepresentation, breach of warranty, or
non-fulfillment of any obligation on the part of any Seller or DAP
under this Agreement, any document relating thereto or contained in
any schedule or exhibit to this Agreement or from any
misrepresentation in or omission from any certificate, schedule, other
agreement or instrument by any Seller or DAP hereunder;
(b) Any and all liabilities of DAP of any nature whether
accrued, absolute, contingent or otherwise, and whether known or
unknown, existing at the Closing Date, with respect to the following:
(i) All Tax liabilities of DAP, together with any
interest or penalties thereon or related thereto, through the
Closing Date and any Tax liability of DAP arising in
connection with the transactions contemplated hereby. Any
Taxes, penalties or interest attributable to the operations
of DAP payable as a result of an audit of any tax return
shall be deemed to have accrued in the period to which such
Taxes, penalties or interest are attributable;
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(ii) All environmental liabilities relating to any
of DAP's properties, including federal, state and local
environmental liability, together with any interest or
penalties thereon or related thereto, through the Closing
Date, but excluding any amount for which there is an adequate
accrual and reserve on the Financial Statements;
(iii) All claims by Medicare, Medicaid, or any
other third party payor relating to reimbursement for
services provided by DAP prior to the Closing Date
("Reimbursement Claims"). Indemnification by Seller for
Reimbursement Claims shall include all costs incurred by
Purchaser for such claims, including, but not limited to,
applicable investigative and audit expenses, attorneys fees,
reimbursement costs, and any fines and penalties levied
against DAP; and
(iii) Any and all 100% Ownership Expenses (as such
term is defined in Section 4.15 hereof).
(c) All demands, assessments, judgments, costs and
reasonable legal and other expenses arising from, or in connection
with any Claim incident to any of the foregoing.
(d) The indemnification provided hereunder shall be solely and
exclusively available to the Purchaser, and its successors and assigns,
and shall not be available to any third party (including, without
limitation, any past, present or future shareholder of the Purchaser).
The procedure pursuant to which the Purchaser may seek indemnification
for third-party Claims is set forth in Section 11.4 hereof.
(e) In the event the Class A Shareholders are required to
make one or more payments to the Purchaser (an "Indemnification
Payment") with respect to any indemnification obligation provided
hereunder, and such payment results in the Purchaser's realization of
a net reduction in the Purchaser's federal, state, local or foreign
income or franchise tax liability (a "Net Tax Benefit"), then the
amount of the Indemnification Payment shall be adjusted, on a fair and
equitable basis, to reflect the amount of the Net Tax Benefit.
11.3 Indemnification by the Purchaser. Subject to this Article
XI, the Sellers and their heirs, assigns, representatives and agents shall be
indemnified and held harmless by the Purchaser, at all times after the date of
this Agreement, against and in respect of any and all damage, loss, deficiency,
liability, obligation, commitment, cost or expense (including the fees and
expenses of counsel) resulting from, or in respect of, any misrepresentation,
breach of warranty, or non-fulfillment of any obligation on the part of the
Purchaser under this Agreement, any document relating thereto or contained in
any schedule or exhibit to this Agreement or from any misrepresentation in or
omission from any certificate, schedule, other agreement or instrument by the
Purchaser hereunder.
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11.4 Third-Party Claims. Except as otherwise provided in this
Agreement, the following procedures shall be applicable with respect to
indemnification for third-party Claims. Promptly after receipt by the party
seeking indemnification hereunder (hereinafter referred to as the "indemnitee")
of notice of the commencement of any (a) Tax audit or proceeding for the
assessment of Tax by any taxing authority or any other proceeding likely to
result in the imposition of a Tax liability or obligation or (b) any action or
the assertion of any Claim, liability or obligation by a third party (whether
by legal process or otherwise), against which Claim, liability or obligation
the other party to this Agreement (hereinafter the "indemnitor") is, or may be,
required under this Agreement to indemnify such indemnitee, the indemnitee
will, if a Claim thereon is to be, or may be, made against the indemnitor,
notify the indemnitor in writing of the commencement or assertion thereof and
give the indemnitor a copy of such Claim, process and all legal pleadings. The
indemnitor shall have the right to participate in the defense of such action
with counsel of reputable standing. The indemnitor shall have the right to
assume the defense of such action unless such action (i) may result in
injunctions or other equitable remedies in respect of the indemnitee or its
business; (ii) may result in liabilities which, taken with other then existing
Claims under this Article XI, would not be fully indemnified hereunder; or
(iii) may have a material adverse impact on the business or financial condition
of the indemnitee after the Closing Date (including an effect on the Tax
liabilities, earnings or ongoing business relationships of the indemnitee).
The indemnitor and the indemnitee shall cooperate in the defense of such
Claims. In the case that the indemnitor shall assume or participate in the
defense of such audit, assessment or other proceeding as provided herein, the
indemnitee shall make available to the indemnitor all relevant records and take
such other action and sign such documents as are necessary to defend such
audit, assessment or other proceeding in a timely manner. If the indemnitee
shall be required by judgment or a settlement agreement to pay any amount in
respect of any obligation or liability against which the indemnitor has agreed
to indemnify the indemnitee under this Agreement, the indemnitor shall promptly
reimburse the indemnitee in an amount equal to the amount of such payment plus
all reasonable expenses (including legal fees and expenses) incurred by such
indemnitee in connection with such obligation or liability subject to this
Article XI. By posting any required bond, or paying any other amounts required
under law or by any court, the indemnitor may appeal a non-final determination
or ruling of any court; provided, however, the indemnitee shall not be required
to pay any fees, costs or expenses or any other amount or otherwise suffer any
damage in connection with any such appeal.
Prior to paying or settling any Claim against which an indemnitor is,
or may be, obligated under this Agreement to indemnify an indemnitee, the
indemnitee must first supply the indemnitor with a copy of a final court
judgment or decree holding the indemnitee liable on such claim or failing such
judgment or decree, and must first receive the written approval of the terms
and conditions of such settlement from the indemnitor. An indemnitor shall
have the right to settle any Claim against it, subject to the prior written
approval of the indemnitee, which approval shall not be unreasonably withheld;
provided, however, should the indemnitee withhold approval to settle the Claim,
the indemnitor's obligation hereunder shall not exceed the amount at which the
Claim could have been settled, plus interest through the date the Claim is
ultimately
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paid. Interest for purposes hereof shall be at the prime rate of interest of
NationsBank, N.A., as published from time to time on the date such approval was
requested.
An indemnitee shall have the right to employ its own counsel in any
case, but the fees and expenses of such counsel shall be at the expense of the
indemnitee unless (a) the employment of such counsel shall have been authorized
in writing by the indemnitor in connection with the defense of such action or
Claim, (b) the indemnitor shall not have employed, or is prohibited under this
Section 11.4 from employing, counsel in the defense of such action
or Claim, or (c) such indemnitee shall have reasonably concluded that there may
be defenses available to it which are contrary to, or inconsistent with, those
available to the indemnitor, in any of which events such fees and expenses of
not more than one additional counsel for the indemnified parties shall be borne
by the indemnitor.
11.5 Deductible. Notwithstanding the foregoing provisions of this
Article XI, except for the next succeeding sentence of this Section 11.5, no
indemnification pursuant to this Article XI shall be required of an
indemnifying party hereunder unless and until the aggregate amount due the
indemnified party for all Claims under this Article XI shall exceed $75,000.00
(the "Deductible"), and then only to the extent that the aggregate amount of
such Claims exceeds the Deductible. Notwithstanding the foregoing, no Claim
(regardless of amount) that arises out of a breach of any of the
representations or warranties contained in Sections 2.3 (capitalization), 2.5
(title to DAP Shares), 2.6 (options and rights on capital stock), 2.23(b)
(self-insurance), 2.36 (selected financial amounts as of Closing) or 4.15
(purchase price as consideration for 100% ownership) shall at any time be
subject to the Deductible or be counted in determining the Maximum Liability
(as defined in Section 11.6).
11.6 Maximum Liability. (a) Notwithstanding the foregoing
provisions of this Article XI, except as provided in the last sentence of
Section 11.5 above, the maximum liability in connection with any and all Claims
for indemnification or breach or violation of representations or warranties
under this Agreement shall be:
(i) in the aggregate, with respect to all Class A
Shareholders, Twelve Million Five Hundred Thousand Dollars
($12,500,000.00); and
(ii) individually, with respect to any single Class A
Shareholder, One Million Two Hundred Fifty Thousand Dollars
($1,250,000.00) (the "Individual Cap"). In furtherance, and not in
limitation of the foregoing, with respect to any single Claim for
indemnification arising under this Agreement which Claim is matured,
perfected and ready for enforcement and collection (a " Final Claim"),
the maximum liability of any individual Class A Shareholder shall be
the lesser of (x) the Individual Cap, and (y) 1/10 of the aggregate
amount of the Final Claim.
(b) The Purchaser agrees that, to the extent it has a
Claim which it has determined to seek indemnification from the Class A
Shareholders pursuant to this Article XI, in any action, claim or cause of
action the Purchaser files in a court of competent jurisdiction,
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61
the Purchaser shall name all Class A Shareholders, and, in connection with any
such litigation, shall pursue a judgment against and collection from all Class
A Shareholders.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified and supplemented only by a written agreement
signed by DAP, the Purchaser and 51% of the Sellers; provided, however, no
amendment shall materially impair the rights of any Seller hereunder without
the express written consent of such Seller.
12.2 Entire Agreement. This Agreement, including the schedules
and exhibits hereto and the annexes, attachments, documents, certificates and
instruments referred to herein and therein, embodies the entire agreement and
understanding of the parties hereto in respect of the transactions contemplated
by this Agreement and supersedes all prior agreements, representations,
warranties, promises, covenants, arrangements, communications and
understandings, oral or written, express or implied, between the parties with
respect to such transactions. There are no agreements, representations,
warranties, promises, covenants, arrangements or understandings between the
parties with respect to such transactions, other than those expressly set forth
or referred to herein.
12.3 Certain Definitions.
"Acquiring Person Affiliate" shall mean and include (i) any
Person who becomes an Affiliate of AmeriPath after the date hereof
through the acquisition of all of the assets or stock of AmeriPath,
and/or (ii) any Person who becomes an Affiliate of AmeriPath after the
date hereof through a merger with or into AmeriPath in which such
Person (and not AmeriPath) survives; provided, however, that the term
"Acquiring Person Affiliate" shall not mean or include any Person who
was an Affiliate of AmeriPath immediately prior to the consummation of
either of the transactions described under clauses (i) or (ii) of this
definition.
"Affiliate" means, with regard to any Person, (a) any Person,
directly or indirectly, controlled by, under common control of, or
controlling such Person, (b) any Person, directly or indirectly, in
which such Person holds, of record or beneficially, five percent or
more of the equity or voting securities, (c) any Person that holds, of
record or beneficially, five percent or more of the equity or voting
securities of such Person, (d) any Person that, through Contract,
relationship or otherwise, exerts a substantial influence on
the management of such Person's affairs, (e) any Person that, through
Contract, relationship or otherwise, is influenced substantially in
the management of their affairs by such Person, or (f) any director,
officer, partner or individual holding a similar position in respect
of such Person.
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62
"Authority" means any governmental, regulatory or
administrative body, agency, arbitrator or authority, any court or
judicial authority, any public, private or industry regulatory agency,
arbitrator authority, whether international, national, federal, state
or local.
"Claim" means any action, claim, obligation, liability,
expense, lawsuit, demand, suit, inquiry, hearing, investigation,
notice of a violation, litigation, proceeding, arbitration, or other
dispute, whether civil, criminal, administrative or otherwise, whether
pursuant to contractual obligations or otherwise.
"Contract" means any agreement, contract, commitment,
instrument or other binding arrangement or understanding, whether
written or oral.
"Environmental Law" means any law, statute, Regulation, rule,
Order, decree, judgment, consent decree, settlement agreement or
governmental requirement, which relates to or otherwise imposes
liability or standards of conduct concerning mining or reclamation of
mined land, discharges, emissions, releases or threatened releases of
noises, odors or any pollutants, contaminants or hazardous or toxic
wastes, substances or materials, whether as matter or energy, into
ambient air, water, or land, or otherwise relating to the manufacture,
processing, generation, distribution, use, treatment, storage,
disposal, cleanup, transport or handling of pollutants, contaminants,
or hazardous wastes, substances or materials, including (but not
limited to) the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, the Superfund Amendments and Reauthorization
Act of 1986, as amended, the Resource Conservation and Recovery Act of
1976, as amended, the Toxic Substances Control Act of 1976, as
amended, the Federal Water Pollution Control Act Amendments of 1972,
the Clean Water Act of 1977, as amended, any so-called "Superlien"
law, and any other similar Federal, state or local statutes.
"Environmental Permit" shall mean Permits, certificates,
approvals, licenses and other authorizations relating to or required
by Environmental Law and necessary or desirable for a Person's
business.
"GAAP" means generally accepted accounting principles,
applied on a consistent basis with the Financial Statements, as in
existence at the date hereof.
"Health Care Laws" means any Federal, state, or local
Regulation or Order, of any Authority, which relates to or otherwise
imposes liability or standards of conduct concerning the licensure,
certification, qualification, or operation of a laboratory, pathology
physician service or other aspect of a Person's business subject to
such Health Care Laws, including but not limited to Chapter 400,
Florida Statutes, governing home health agencies; Chapter 641, Florida
Statues, The Health Maintenance Organization Act; Chapter 465, Florida
Statutes, the Florida Pharmacy Act; Sections 499.001 to .081, Florida
Statutes, the Florida Drug and Cosmetic Act; Chapter 893, Florida
Statutes, the
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63
Florida Comprehensive Drug Abuse Prevention and Control Act;
Sections 455.236 to .239, Florida Statutes, the Patient Self-Referral
Act; Section 627.6699, Florida Statutes, the Employee Health Care
Access Act; Sections 409.026 and 409.912, Florida Statutes, 21 U.S.C.
Section 301-392, the Federal Food Drug and Cosmetic Act; 21 U.S.C.
Section 821 et seq., the Federal Drug Abuse Act; Section 1128B of the
Social Security Act; The Clinical Laboratory Improvement Amendments of
1988; 42 U.S.C. Section 1320a-7b, 42 C.F.R. Part 1001, 42 CFR Chapter
IV, Subchapter C; Sections 1876 or 1903 of the Social Security Act; 45
CFR, Part 74; 45 CFR, Part 92; 42 CFR 455.109 Section 306 of the Clean
Air Act; 42 U.S.C. Section 1857(h) et seq., Section 508 of the Clean
Water Act; 33 U.S.C. Section 1368 et seq., Executive Order 11738 and
Environmental Protection Agency regulations; 40 CFR Part 15, Title VI
of the Civil Rights Act of 1964; 42 U.S.C. Section 2000 d et seq.,
Section 504 of the Rehabilitation Act of 1933; 29 U.S.C. Section 7940;
Title IX of the Education Amendments of 1972, 20 U.S.C. Section 1681
et seq., the Age Discrimination Act of 1975; 42 U.S.C. Section 6101 et
seq., Section 654 of OBRA '81; 42 U.S.C. Section 9849 and the
Americans with Disabilities Act of 1990; P.L. 101-336, OBRAs 1986
through 1993, as amended, and any other similar Federal, state or
local Regulations.
"Knowledge" or "known" means (when referred to, for example,
as "to the knowledge of", or "known to", a Class A Shareholder or of
DAP) the best knowledge, information and belief of each such Class A
Shareholder and of the officers of DAP, respectively, after due
inquiry into the subject matter thereof, with appropriate members of
DAP's management.
"Lien" means any security interest, lien, mortgage, pledge,
hypothecation, encumbrance, Claim, easement, restriction or interest
of another Person of any kind or nature.
"Material Adverse Change" means any development or change
which has had or would have a Material Adverse Effect.
"Material Adverse Effect" means any circumstances, state of
facts or matters which has, or might reasonably be expected to have, a
material adverse effect in respect of DAP's or the Purchaser's (as the
case may be) business, operations, properties, assets, condition
(financial or otherwise), results, plans, strategies or prospects.
"Order" means any decree, judgment, award, order, injunction,
rule, consent of or by an Authority.
"Permitted Cash Payments" means cash payment amounts which
may be paid by DAP prior to Closing in connection with (i) planned
profit-sharing contributions not to exceed $250,000; (ii) payments to
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D. in an aggregate amount not to exceed $214,163
in connection with the exercise by DAP of certain stock repurchase
rights under the DAP Stockholders' Agreement (in view of the
termination of ▇▇. ▇▇▇▇▇▇'▇ employment with DAP), or (iii) payments to
▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D. in an
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64
aggregate amount not to exceed $96,974 in connection with the
exercise by DAP of certain stock repurchase rights under the DAP
Stockholders' Agreement (in view of the retirement of ▇▇. ▇▇▇▇▇▇).
"Person" means any corporation, partnership, joint venture,
company, syndicate, organization, association, trust, entity,
Authority or natural person.
"Proprietary Rights" means any patent, patent application,
copyright, trademark, trade name, service ▇▇▇▇, service name, trade
secret, know-how, confidential information or other intellectual
property or proprietary rights.
"Regulation" means any law, statute, rule, regulation,
ordinance, requirement, announcement or other binding action of or by
an Authority.
"Subsidiary" means any Person which the Purchaser or DAP, as
the case may be, owns, directly or indirectly, 50% or more of the
outstanding stock or other equity interests.
12.4 Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered by hand or mailed, first class
certified mail with postage paid or by overnight receipted courier service:
(a) If to the Sellers or DAP, to:
▇▇▇▇▇▇▇ and Associates Pathology
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇, M.D.
with a copy to:
▇▇▇▇▇ & Lardner
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
or to such other person or address as the Sellers or DAP shall
furnish by notice to the Purchaser in writing.
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65
(b) If to the Purchaser to:
AmeriPath, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. New, President
with a copy to:
Greenberg, Traurig, Hoffman,
Lipoff, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.A.
▇▇▇ ▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
or to such other person or address as the Purchaser shall furnish by
notice to Seller in writing.
12.5 Waiver of Compliance; Consents. Any failure of any party
hereto to comply with any obligation, covenant, agreement or condition herein
may be waived in writing by the other parties hereto, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this Agreement requires
or permits consent by or on behalf of any party hereto, such consent shall be
given in writing.
12.6 Assignment. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of the other parties.
12.7 Governing Law. The Agreement shall be governed by the
internal laws of the State of Florida as to all matters, including but not
limited to matters of validity, construction, effect and performance.
12.8 Consent to Jurisdiction; Service of Process. DAP and each of
the Sellers hereby irrevocably submit to the jurisdiction of the state or
federal courts located in Broward County, Florida in connection with any suit,
action or other proceeding arising out of or relating to this Agreement and the
transactions contemplated hereby, and hereby agree not to assert, by way of
motion, as a defense, or otherwise in any such suit, action or proceeding that
the suit, action or proceeding is brought in an inconvenient forum, that the
venue of the suit, action or proceeding is improper or that this Agreement or
the subject matter hereof may not be enforced by such courts.
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66
12.9 Injunctive Relief. The parties hereto agree that in the
event of a breach of any provision of this Agreement, the aggrieved party or
parties may be without an adequate remedy at law. The parties therefore agree
that in the event of a breach of any provision of this Agreement, the aggrieved
party or parties may elect to institute and prosecute proceedings in any court
of competent jurisdiction to enforce specific performance or to enjoin the
continuing breach of such provision, as well as to obtain damages for breach of
this Agreement. By seeking or obtaining any such relief, the aggrieved party
shall not be precluded from seeking or obtaining any other relief to which it
may be entitled.
12.10 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.11 Headings. The article, section and subsection headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement (or any
provision hereof).
12.12 Binding Effect. This Agreement shall not be construed so as
to confer any right or benefit upon any Person other than the signatories to
this Agreement and each of their respective successors and permitted assigns.
12.13 Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to any party hereto, upon any breach or default
of any other party under this Agreement, shall impair any such right, power or
remedy of such party nor shall it be construed to be a waiver of any such
breach or default, or an acquiescence therein, or of or in any similar breach
or default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any party hereto of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement must be made in writing and shall be effective
only to the extent specifically set forth in such writing. All remedies,
either under this Agreement or by law or otherwise afforded to any party, shall
be cumulative and not alternative.
12.14 Severability. Unless otherwise provided herein, if any
provision of this Agreement shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
12.15 Expenses. All fees, costs and expenses (including, without
limitation, legal, auditing and accounting fees, costs and expenses) incurred
in connection with considering, pursuing, negotiating, documenting or
consummating this Agreement and the transactions contemplated hereby shall be
borne and paid solely by the party incurring such fees, costs and expenses;
provided, however, that, if and only if the transactions contemplated hereby
are consummated, the Purchaser shall pay up to a maximum of $500,000.00 of the
Sellers' expenses incurred in connection with this Agreement and the
consummation of the transactions
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67
contemplated hereby, against invoices therefor, including, without limitation,
the Broker's Fee and the fees of Sellers' counsel. The Sellers shall bear any
and all fees, costs and expenses in excess of $500,000.00.
IN WITNESS WHEREOF, the parties hereto have made and entered into this
Agreement the date first hereinabove set forth.
AMERIPATH, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇, Chief Operating Officer
▇▇▇▇▇▇▇ AND ASSOCIATES PATHOLOGY, P.A.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
▇▇▇▇ ▇▇▇▇▇, M.D.
President
SELLERS:
CLASS A SHAREHOLDERS:
---------------------
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
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68
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, M.D.
/s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------------------------
▇▇▇▇ ▇▇▇▇▇, M.D.
/s/ E. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
-------------------------------------------------
E. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇., M.D.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, M.D.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇-▇▇▇▇▇▇
-------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇-▇▇▇▇▇▇, M.D.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D.
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69
CLASS B SHAREHOLDERS:
---------------------
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇, M.D.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
/s/ M. ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------------------
M. ▇▇▇▇▇ ▇▇▇▇▇▇▇, M.D.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D.
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