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Exhibit 10.26
TRUST AGREEMENT
This Trust Agreement ("Agreement") is made as of 15th day of October
1996 between Ameripath, Inc., a Delaware corporation (the "Settlor"), and Xxxx
Xxxxxx ("Xxxxxx") as trustee (in such capacity, the "Trustee").
WHEREAS, as of the date hereof, Michel owns one hundred percent (100%)
of the outstanding capital shares of Xxxx Xxxxxx, M.D., Inc., an Ohio
professional corporation (the "Ohio PC");
WHEREAS, promptly after the execution of this Agreement, the trust
created hereby (the "Trust") shall enter a certain Stock Purchase Agreement (the
"PC Purchase Agreement") with Michel pursuant to which Xxxxxxx shall agree to
sell all of the outstanding Ohio PC shares to the Trust on the terms and
conditions set forth in the PC Purchase Agreement; and
WHEREAS, the Settlor seeks to create the Trust as provided herein and
seeks to appoint Michel as the initial Trustee of the Trust.
NOW, THEREFORE, in consideration of the promises and covenants
contained herein, the parties agree to be legally bound as follows:
1. CREATION OF THE TRUST; INITIAL TRUSTEE: SUCCESSOR TRUSTEE.
(a) Name. The Trust shall be named and referred to as the "AmeriPath
Ohio Trust."
(b) Initial Trustee. The Settlor hereby appoints Michel to act as the
initial Trustee in accordance with the terms of this Agreement. Michel hereby
accepts such appointment and agrees to act as the Trustee in accordance with the
terms of this Agreement.
(c) Successor Trustee. If Michel or any Successor Trustee ceases to
serve, is removed, or resigns as Trustee pursuant to Section 6 hereof, the
Successor Trustee (as defined below) shall be named pursuant to Section 6(a) and
6(b) of this Agreement, as appropriate. A Successor Trustee shall have all the
powers, obligations and discretions given to the original Trustee. Any person or
institution may rely upon the representations of a Successor
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Trustee, as to its authority and incumbency, until receiving written
instructions to the contrary from the Settlor.
2. PROPERTY IN TRUST.
(a) Initial Deposit in Trust. Concurrently with the execution of this
Agreement, the Settlor is delivering to the Trustee, on behalf of the Trust,
$6,500,000 (in immediately available funds), stock certificate evidencing 96,000
shares of Common Stock of the Settlor and a promissory note of the Settlor in
the stated principal amount of $1,500,000 (collectively, the "Initial Trust
Estate"). The Trustee acknowledges receipt of the Initial Trust Estate. Promptly
following the execution of this Agreement, Michel, acting in his individual
capacity, shall deliver all outstanding shares of the Ohio PC to the Trustee,
acting on behalf of the Trust, pursuant to the terms and conditions of the PC
Purchse Agreement. The Initial Trust Estate, Ohio PC shares and all other
property of any kind that becomes a part of the Trust in accordance with this
Agreement and the PC Purchase Agreement for the primary benefit of the Settlor.
(b) Other Additions To The Trust. At any time, the Settlor may add
property to the Trust. All such additions, however, shall be subject to the
Trustee's power to refuse to accept such property if, in its sole discretion, it
determines that such property would cause the Trustee to incur liability under
any federal, state, or local law or regulation. The Settlor agrees that it shall
add, and the Trustee agrees that it shall accept, hold, manage and distribute,
funds and securities issued by the Settlor in such amounts and at such times as
may be required to discharge the Trust's obligations under the PC Purchase
Agreement.
3. WITHDRAWAL, TERMINATION, AND MODIFICATION.
(a) Withdrawal. The Settlor reserves the right at any time without the
consent of the Trustee to withdraw any asset of the Trust or to terminate the
Trust by written instrument delivered personally or by certified mail, return
receipt requested, to the Trustee.
(b) Modification. The Settlor reserves the right at any time without
the consent of the Trustee to modify this Agreement in any respect by delivery
personally or by
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certified mail, return receipt requested, of a written modification to the
Trustee; provided, however, that any modification affecting the powers or
obligations of the Trustee shall be subject to the written approval of the
Trustee, who, upon disagreement with said modifications, shall be deemed to have
resigned its office as Trustee.
(c) Termination of Trust Agreement. This Agreement and the Trust
created hereunder shall continue until the earlier of (i) the date specified in
a written notice given to the Trustee by the Settlor, and (ii) 21 years after
the death of the last survivor of the descendants of the late King Xxxxxx V of
the United Kingdom of Great Britain and Northern Ireland who were living on the
date hereof, but if any rights, privileges or options hereunder shall be or
become valid under applicable law for a period subsequent to the 21st
anniversary of the death of such last survivor (or, without limiting the
generality of the foregoing, if legislation shall become effective providing for
the validity or permitting the effective grant of such rights, privileges and
options for a period in gross exceeding the period for which such rights,
privileges and options are hereinabove stared to extend and be valid), then such
right, privileges or options shall not terminate as aforesaid but shall extend
to and continue in effect, but only if such non-termination and extension shall
then be valid under applicable law, until such time as the same shall, under
applicable law, cease to be valid.
(d) Actions by the Trustee upon Termination. Upon termination of this
Agreement and the Trust created hereby, the Trustee shall take such action as
may be specified in writing by the Settlor to transfer the Assets to the
Settlor.
(e) Compliance with Laws. The Settlor agrees not to exercise any right
reserved in Section 3(a), 3(b) or 3(c) hereof in a manner that could foreseeably
result in a violation of any Laws (as hereinafter defined) by any one or more of
the Settlor, the Ohio PC, the Trustee or Michel.
4. DISTRIBUTIONS FROM TRUST.
(a) Distribution of Income. The Trustee shall distribute the net income
of the Trust, if any, to the Settlor at such times and in such amounts as the
Settlor directs in writing.
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(b) Distribution of Property or Principal. The Trustee shall pay or
distribute the property or principal of the Trust to the Settlor at such times
and in such amounts as the Settlor directs in writing. The Settlor agrees not to
direct the distribution of the Ohio PC shares in a manner that could foreseeably
result in a violation of any Laws (as hereinafter defined) by any one or more of
the Settlor, the Ohio PC, the Trustee or Michel.
5. POWERS AND OBLIGATIONS OF TRUSTEE.
(a) Powers. The Trustee, as a fiduciary, shall have, subject to the
restrictions set forth in this Section 5 and in addition to all other powers
granted to the Trustee by law, the powers set forth in this Section 5. The
Trustee shall have such powers without giving bond and without being supervised
by any court.
i) General Powers Over Trust Funds. The Trustee may not
distribute, sell, transfer, pledge or exchange any or all of the assets of the
Trust (the "Assets") without the prior written consent of the Settlor; but
otherwise has full power and authority to do everything in the management and
for the preservation of the Assets that it considers proper and for the best
interests of the Trust. The Settlor hereby authorizes and instructs the
Trustee to deliver such Assets, execute and deliver such documents, and take
such other actions as may be required, to discharge the Trust's obligations
under the PC Purchase Agreement, without further written consent or other
action by the Settlor, to the extent, but only to the extent, such obligations
are to be discharged at the Closing referred to in the PC Purchase Agreement.
ii) Fiduciary Responsibility. The Trustee shall not be held
responsible for any loss sustained by the Trust through any error of judgment
made in good faith, but shall be liable only for the Trustee's own willful
misconduct, gross negligence or breach of good faith. The Trustee shall not be
personally liable upon any debt of or claim against the Trust unless personal
liability has been expressly assumed in writing by the Trustee.
iii) Practice of Medicine. It is anticipated that the Assets shall
include shares of stock in one or more professional corporations. Nothing
contained in any provision of this Agreement shall be construed so as to
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constitute the practice of medicine by the Trust, the Trustee, or the Settlor.
iv) Indemnification. The Settlor shall indemnify the Trustee, in
the Trustee's individual capacity, from any liability, loss, claim, damage,
judgment, award or expense (including reasonable attorney's fees and
disbursements) arising out of the performance of the trustee's duties hereunder;
provided, however, that the Settlor shall have no obligation to indemnify the
Trustee for the Trustee' s own willful misconduct, gross negligence or breach of
good faith. The Settlor may provide insurance for the Trustee in such types and
amounts as the Settlor deems reasonably necessary. The Trustee's right to
indemnification hereunder shall survive any resignation or removal of the
Trustee, or and termination of the Trust, with respect to any claim or matter
arising out of any action taken or not taken by the Trustee, or any other
circumstance or event occurring or existing, on or before the date of any such
resignation, removal or termination.
(b) Records. The Trustee shall keep such records of Trust transactions
as may be requested in writing by the Settlor; and the Settlor, through any
executive officer, shall at all reasonable times have the right to inspect the
records of the Trust.
(c) Release of Trustee's Obligation to Examine Records. The Trustee or
Successor Trustee shall have no responsibility for inquiring into, reviewing or
auditing the administration of any Asset before such asset was accepted as Trust
property, and Successor Trustee shall have no liability for any act or omission
of any prior Trustee or prior Successor Trustee regarding the administration of
Assets; provided, however, that no Trustee or Successor Trustee shall be
relieved of responsibility with reference to its own acts or omissions in any
other capacity.
(d) Action Upon Instructions. Subject to the provisions of Section 8
hereof, upon the written instructions of the Settlor, the Trustee will: (i) give
such notice or direction or exercise such right, remedy or power hereunder or in
respect of all or any part of the Assets, as may be specified in such
instructions; (ii) take such action to hold, preserve, protect or otherwise deal
with the Assets as may be specified in such instructions; (iii) approve as
satisfactory all matters required by the terms of the PC
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Purchase Agreement to be satisfactory to the Trustee as may be specified in
such instructions; and (v) exercise the Trust's rights as holder of Ohio PC
shares in such manner as may be specified in such instructions (including
exercising rights to consent in writing, vote at meetings of stockholders (in
person or by proxy) or otherwise take such actions as under applicable law
shareholders are permitted or required to take (including election of
directors)). Except as provided in the last sentence of Section 5(a)(i), the
Trustee shall not be obligated to take any action in performance of its
convenants under the PC Purchase Agreement unless such actions is specified in
written instructions from the Settlor.
(e) No Duties Except as Specified in Trust Agreement or Instructions.
The Trustee shall not have any duty or obligation to manage, control, use, make
any payment in respect of, register, record, insure, inspect, sell, dispose of
or otherwise deal with the Assets, or to otherwise take or refrain from taking
any action under or in connection with the Assets, except as expressly provided
by the terms of this Agreement or in written instructions from the Settlor, and
no implied duties or obligations shall be read into this Agreement against the
Trustee.
(f) Absence of Duties. Except in accordance with written instructions
furnished pursuant to Section 5(d) and without limiting the generality of
Section 5(e), the Trustee shall have no duty to (i) file, record or deposit this
Agreement or any instrument or document described herein or in the PC Purchase
Agreement, or to maintain any such filing, recording or deposit or to refile,
rerecord or redeposit any such document, (ii) obtain insurance on Assets or
effect or maintain any such insurance, other than to receive and forward to the
Settlor any notices, policies, certificates or binders furnished to the Trustee
pursuant to the PC Purchase Agreement, (iii) maintain the Assets, (iv) pay or
discharge any tax or any lien owing with respect to or assessed or levied
against any part of the Assets, other than to forward notice of such tax or lien
received by the Trustee to the Settlor, or (vi) manage, control, use, sell,
dispose of or otherwise deal with any part of the Assets.
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(g) Reliance; Advice of Counsel. The Trustee shall not incur any
liability to any Person in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, resort, opinion, bond or other
document or paper believed by him to be genuine and believed by him to be signed
by the proper party or parties. The Trustee may accept and rely upon a certified
copy of a resolution of the board of directors or other governing body of any
corporate party as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect. As to any
fact or matter the manner of ascertainment of which is not specifically
prescribed herein, the Trustee may for all purposes hereof rely on an officer's
certificate of the relevant party, as to such fact or matter, and such
certificate shall constitute full protection to the Trustee for any action taken
or omitted to be taken by him in good faith in reliance thereon. In the
administration of the trusts hereunder, the Trustee may execute any of the
trusts or powers hereof and perform his powers and duties hereunder directly or
through agents or attorneys and may, at the expense of the Trust, consult with
counsel, accountants and other skilled persons to be selected and employed by
him, and the Trustee shall not be liable for anything done, suffered or omitted
in good faith by it in accordance with the advice or opinion of any such
counsel, accountants or other skilled persons and not contrary to express
provisions of this Agreement, unless the selection of such counsel, accountants
or other persons shall have been made with negligence, willful misconduct or bad
faith.
6. SUCCESSOR TRUSTEE AND COMPENSATION.
(a) Removal of Trustee and Appointment of Successor. Any Trustee may be
removed at any time with or without cause by a document signed by the Settlor.
The Settlor shall designate and appoint a Successor Trustee or Trustees (a
"Successor Trustee") who, to the extent required by law shall be a doctor of
medicine duly licensed to practice medicine in the State of Ohio. Any such
Successor Trustee shall be appointed in accordance with the terms of this
Agreement, and the Settlor shall deliver by certified mail, return receipt
requested, a document making such appointment, accompanied by the documents
removing the Trustee, to the Trustee being removed and to such Successor
Trustee. The Successor Trustee appointed in accordance with the foregoing shall
promptly deliver a written acceptance thereof to the then acting Trustee. All of
the Trust
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property in the possession of the then acting Trustee shall be delivered to the
Successor Trustee, together with an accounting of Trust property, receipts and
disbursements (which accounting shall be conducted at the expense of the
Settlor); upon so doing, the then acting Trustee shall have no further
responsibility or right to administer the Trust. Thereupon, such Successor
Trustee shall become vested with all of the Trust property with the same effect
as if originally designated as Trustee.
(b) Resignation of Trustee. Michel, as Trustee, or any successor
Trustee acting hereunder may resign at any time by giving written notice to the
Settlor which resignation shall be effective immediately upon receipt of such
notice In that event, the Settlor shall select a Successor Trustee and the Trust
Assets shall be transferred in accordance with terms set forth in Section 6(a)
above.
(c) Compensation of Trustee. Any individual serving as the Trustee
hereunder shall serve without bond. As compensation for all services under this
Agreement, the Settlor shall pay to the Trustee, for his individual account,
$100 per year (or portion thereof) during the term of this Agreement, payable in
arrears on September 30 of each year (commencing September 30, 1997) or earlier
removal or resignation of the Trustee or termination of the Trust. The Trustee
will be entitled to reimbursement only for actual expenses as the Trustee
hereunder and the indemnification provided in Section 5 hereof.
(d) Situs of Trust. Except as otherwise expressly provided herein, the
validity, effect, and interpretation of this Agreement, and of the property
interests created herein, shall be controlled by the laws of the State of Ohio;
such laws shall also govern the administration of the Trust hereunder.
7. NOTICE. Any notice required or permitted to be given under this
Agreement shall be given by registered or certified mail, return receipt
requested in a pre-paid envelope, by overnight mail or courier, or by facsimile
transmission with receipt acknowledged addressed to the parties as follows (or
at other addresses as shall be given in writing by either party to the other):
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If to Settlor: AmeriPath, Inc.
000 Xxxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. New, President
If to Trustee: Xxxx Xxxxxx, M.D.
00000 Xxxxxxx Xxxxxxxx 0, Xxxxx 000
Xxxxxxxxx, XX 00000
8. NO VIOLATION OF LAW. Nothing in this Agreement shall be construed
to impose upon Michel any requirement if complying with such requirement could
foreseeably result in a violation of any law, rule, regulation, order,
judgment, award or determination of any court, arbitrator, governmental or
other authority, including the violation of any code of professional ethics or
other mandate of the medical profession (collectively, the "Laws"). The Settlor
shall not knowingly issue to Michel any direction or impose on him any
requirements, which if performed by Michel could foreseeably violate the Laws.
Without limiting the foregoing, the Settlor shall not interfere in any way with
the exercise by Michel of his professional judgment.
9. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
10. SALE OF THE ASSETS BY THE TRUSTEE IS BINDING. Any sale, transfer,
or other conveyance of the Assets or any part thereof by the Trustee made
pursuant to the terms of this Agreement or the PC Purchase Agreement shall bind
the Settlor and shall be effective to sell, transfer and convey all right, title
and interest of the Trustee and the Settlor in and to such Assets or any part
thereof. Michel, acting in his individual capacity as Seller under the PC
Purchase Agreement, shall not be required to inquire as to the authorization,
necessity, expediency or regularity of such sale, transfer or conveyance with
respect thereto by the Trustee or the Settlor.
11. SUCCESSORS AND ASSIGNS. All covenants and agreements contained
herein shall be binding upon, and inure to the benefit of, the Settlor and its
successors and assigns and the Trustee and his successors, representatives and
assigns, all as herein provided. Any request, notice, direction, consent, waiver
or other instrument or action by
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each of the parties hereto shall bind the successors and assigns of such party.
Upon the death of any individual acting as the Trustee hereunder, his estate or
other legal representative shall promptly resign as the Trustee pursuant to
Section 6(b) hereof.
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IN WITNESS WHEREOF, the parties have executed this document as of the
date first above written.
AMERIPATH, INC.
By: /s/ Xxxxxx X. Xxxx
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Its: Vice President
TRUSTEE:
/s/ Xxxx Xxxxxx, M.D.
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FIRST MODIFICATION TO THE TRUST AGREEMENT
TRUST AGREEMENT
This First Modification to the Trust Agreement ("Modification") is made
as of the 30th day of October, 1996 by AMERIPATH, INC., a Delaware corporation
(the "Settlor"), pursuant to that certain Trust Agreement dated as of October
15, 1996, by and between the Settlor and XXXX XXXXXX, M.D., as trustee (the
"Trustee").
WHEREAS, the Settlor and the Trustee entered into a Trust Agreement
dated October 15, 1996 (the "Trust Agreement"), a copy of which is attached
hereto; and
WHEREAS, Section 3(b) of the Trust Agreement provides that the Trust
Agreement may be modified by the Settlor without the consent of the Trustee by
delivering to the Trustee, by certified mail, return receipt requested, a
written modification.
WHEREAS, the Settlor desires to modify the Trust Agreement as provided
herein.
NOW, THEREFORE, in consideration of the promises and covenants
contained herein, the parties agree to be legally bound as follows:
1. The recitals set forth above are true and correct in all respects
and are incorporated herein and made a part hereof.
2. All capitalized terms used in this Modification without definition
shall have the meanings assigned thereto in the Trust Agreement.
3. Section 1(a) of the Trust Agreement is hereby amended by deleting
Section 1(a) in its entirety and replacing it with the following:
"(a) Name. The Trust shall be named and referred to as the
"AmeriPath Cleveland Trust."
4. All other terms and conditions of the Trust Agreement shall remain
unchanged.
IN WITNESS WHEREOF, the undersigned has executed this Modification as
of the date first above-written.
AMERIPATH, INC.
By: /s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx, Executive Vice
President and Chief Financial
Officer
