SEC Filings

10-12G/A
AMSURG CORP filed this Form 10-12G/A on 05/09/1997
Entire Document
 


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                                                                   EXHIBIT 4.4


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                       PREFERRED STOCK PURCHASE AGREEMENT

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                                  AMSURG CORP.



  Series A Redeemable Preferred Stock and Series B Convertible Preferred Stock




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                          Dated as of November 20, 1996

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                                TABLE OF CONTENTS


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<S>      <C>                                                                                                      <C>
1.       AUTHORIZATION OF FINANCING...............................................................................1

2.       PURCHASE AND SALE OF PREFERRED STOCK.....................................................................1

3.       CLOSING OF SALE OF PREFERRED STOCK.......................................................................2

4.       CONDITIONS OF CLOSING....................................................................................2
         4A.      Opinions of Counsel.............................................................................2
         4B.      Representations and Warranties; No Default......................................................3
         4C.      Other Agreements................................................................................3
         4D.      Purchase and Loan Permitted by Applicable Laws..................................................3
         4E.      No Adverse Legislation, Action or Decision......................................................3
         4F.      Approvals and Consents..........................................................................4
         4G.      No Material Adverse Change......................................................................4
         4H.      Officer's Certificate as to Financial Statements................................................4
         4I.      Compliance with Existing Debt Facilities; Other Restrictions....................................4
         4J.      Proceedings; Compliance Certificate.............................................................5
         4K.      Projections.....................................................................................5
         4L.      Structure.......................................................................................5
         4M.      Closing Transaction Fee.........................................................................5
         4N.      Purchasers' Due Diligence Review................................................................5

5.       AFFIRMATIVE COVENANTS....................................................................................5
         5A.      Financial Statements and Other Information......................................................5
         5B.      Inspection of Property..........................................................................6
         5C.      Accountants.....................................................................................7
         5D.      Maintenance of Properties; Insurance............................................................7
         5E.      Board Committees................................................................................7
         5F.      Corporate Existence, Etc........................................................................7
         5G.      Payment of Taxes, Claims and Senior Debt........................................................7
         5H.      Compliance With Laws, Etc.......................................................................8
         5I.      Securities Filings..............................................................................8
         5J.      Reservation of Shares...........................................................................8

         5K.      Hart-Scott Filings..............................................................................8
         5L.      Use of Proceeds.................................................................................8

6.       NEGATIVE COVENANTS.......................................................................................8
         6A.      Limitation on Debt..............................................................................9
         6B.      Restrictions on Sales, Mergers and Consolidations...............................................9
         6C.      Restrictions on Dividends, Issuance of Capital Stock............................................9
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         <S>      <C>                                                                                            <C>
         6D.      Transactions with Affiliates...................................................................10
         6E.      Change of Accountants, Accounting Practices....................................................11
         6F.      Limitations on Sale............................................................................11
         6G.      Change in Business.............................................................................11
         6H.      Restrictions on Payment........................................................................11
         6I.      No Amendment of Organizational Documents.......................................................11
         6J.      Compliance with ERISA..........................................................................11
         6K.      Foreign Investment in Real Property Tax Act....................................................12

7.       EVENTS OF DEFAULT.......................................................................................12
         7A.      Purchasers' Remedies...........................................................................14

8.       REPRESENTATIONS, COVENANTS AND WARRANTIES...............................................................15
         8A.      Organization: Corporate Authority..............................................................15
         8B.      Business; Financial Statements.................................................................16
         8C.      Capital Stock and Related Matters..............................................................17
         8D.      Litigation.....................................................................................17
         8E.      Outstanding Debt...............................................................................18
         8F.      Title to Properties............................................................................18
         8G.      Taxes..........................................................................................18
         8H.      Conflicting Agreements and Other Matters.......................................................18
         8I.      Patents, Etc...................................................................................19
         8J.      Private Offering...............................................................................19
         8K.      Broker's or Finder's Commissions; Transaction Fees.............................................19
         8L.      Compliance with Law............................................................................19
         8M.      Investment Company Act.........................................................................20
         8N.      Public Utility Holding Company Act.............................................................20
         8O.      Governmental Consents, Etc.....................................................................20
         8P.      Compliance with ERISA..........................................................................20
         8Q.      Material Agreement.............................................................................22
         8R.      Environmental Matters..........................................................................22
         8S.      Foreign Investment in Real Property Tax Act....................................................23
         8T.      Leases.........................................................................................23
         8U.      Professional Liability.........................................................................23
         8V.      Employee Matters...............................................................................23
         8W.      Solvency.......................................................................................24
         8X.      Projections....................................................................................24

9.       REPRESENTATIONS AND AGREEMENTS OF THE PURCHASERS........................................................24

10.      DEFINITIONS.............................................................................................25

11.      INDEMNIFICATION.........................................................................................31
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<TABLE>
<S>      <C>                                                                                                     <C>
         11A.     Indemnification By Company.....................................................................31
         11B.     Indemnification By Purchasers..................................................................31
         11C.     Procedures Under Indemnification...............................................................31

12.      MISCELLANEOUS...........................................................................................33
         12A.     Payments.......................................................................................33
         12B.     Expenses and Fees..............................................................................33
         12C.     Consent to Amendment; Waivers..................................................................33
         12D.     Survival of Representations and Warranties; Entire Agreement...................................34
         12E.     Successors and Assigns.........................................................................34
         12F.     Notices........................................................................................34
         12G.     Descriptive Headings, Etc......................................................................36
         12H.     Governing Law; Resolution of Disputes..........................................................36
         12I.     Counterparts...................................................................................37
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         PREFERRED STOCK PURCHASE AGREEMENT, dated as of November 20, 1996, by
and among AmSurg Corp., a Tennessee corporation (the "Company"), Electra
Investment Trust P.L.C., a company with limited liability organized under the
laws of England and Wales ("Electra"), Capitol Health Partners, L.P., a Delaware
limited partnership ("CHP") and Michael E. Stephens ("Stephens", and together
with Electra and CHP the "Purchasers", and each, a "Purchaser").

         WHEREAS, the Purchasers desire, upon the terms and conditions
hereinafter provided, to purchase from the Company "Preferred Stock" which
consists of 1,500,000 shares of its Series A Redeemable Preferred Stock, no par
value per share (the "Redeemable Stock") and 1,250,000 shares of its Series B
Convertible Preferred Stock, no par value per share ("Convertible Stock"); and

         WHEREAS, the Company desires, upon the terms and conditions hereinafter
provided, to sell the Preferred Stock to the Purchasers; and

         WHEREAS, the purchase and sale of the Preferred Stock is made in
contemplation of a proposed Spin Off by the Company through which all of the
issued and outstanding common stock of the Company held by American Healthcorp,
Inc. ("AHC") will be distributed to the shareholders of AHC in a tax-free
distribution under Section 355 of the Code.

         NOW, THEREFORE, the parties hereto hereby agree as follows:

         1. AUTHORIZATION OF FINANCING. In order to provide funds for the
expansion of its business and for general corporate purposes, the Company has
authorized the issuance and delivery of 1,500,000 shares of Redeemable Stock and
1,250,000 shares of Convertible Stock. The certificates representing such shares
of Preferred Stock shall be dated the Closing Date and be substantially in the
forms attached hereto as EXHIBITS A and B, respectively, and the shares shall
have terms substantially as specified in the forms of the designation for the
Redeemable Stock (the "Redeemable Designation"), and the designation for the
Convertible Stock (the "Convertible Designation"), both contained in the
Company's Articles of Amendment, dated November 20, 1996 (the "Articles of
Amendment") attached hereto as EXHIBIT C.

         Unless otherwise defined, capitalized terms used in this Agreement are
defined in paragraph 10 hereof.

         2. PURCHASE AND SALE OF PREFERRED STOCK. The Company hereby agrees to
sell to Purchasers and, subject to the terms and conditions herein set forth,
Purchasers agree to purchase from the Company 1,500,000 shares of the Redeemable
Stock having an aggregate purchase price of $3,000,000, and 1,250,000 shares of
Convertible Stock having an aggregate purchase price of $2,500,000. The shares
shall be in the form of one or more certificates in each Purchaser's name, and
in such denominations as the Purchasers shall request:


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                  (i) Electra agrees to purchase 1,090,909 shares of Redeemable
         Stock at an aggregate purchase price of $2,181,818, and 909,091 shares
         of Convertible Stock at an aggregate purchase price of S 1,818,182.

                  (ii) CHP agrees to purchase 272,728 shares of Redeemable Stock
         at an aggregate purchase price of $545,456, and 227,272 shares of
         Convertible Stock at an aggregate purchase price of $454,544.

                  (iii) Stephens agrees to purchase 136,363 shares of Redeemable
         Stock at an aggregate purchase price of $272,726, and 113,637 shares of
         Convertible Stock at an aggregate purchase price of $227,274.

         3. CLOSING OF SALE OF PREFERRED STOCK. The closing (the "Closing") of
the purchase and delivery of the Preferred Stock shall take place at the offices
of Manatt, Phelps & Phillips, 1501 M Street, N.W., Washington, D.C. 20005, at
10:00 a.m. on November ____, 1996, or at such other place or on such other date
as the Purchasers and the Company may agree (the "Closing Date"). At the
Closing, the Company will deliver to the Purchasers the Preferred Stock, against
payment of the purchase price therefor by transfer in lawful money of the United
States of America in immediately available funds to such bank and account as the
Company may direct in writing. In addition, at the Closing, the Company will
deliver to (i) Electra, Inc., a Delaware corporation ("Electra Inc."), a check
payable in immediately available funds, in payment of a transaction fee in the
amount of $129,091 (the "Electra Closing Transaction Fee") and Expenses and (ii)
Capitol Health Consultants, Inc. ("CHC"), a Delaware corporation, a check
payable in immediately available funds, in payment of a transaction fee in the
amount $48,409 and Expenses (the "CHC Closing Transaction Fee," and together
with the Electra Transaction Fee, the "Closing Transaction Fee"). The Company
shall also pay at Closing to Electra and CHC their Expenses. In addition, the
Company will pay to Electra transaction fees of $29,091 per annum and to CHP
transaction fees of $10,909 per annum, payable on the first business day of each
calendar year commencing on January 1, 1998 and terminating at the end of the
calendar year in which a Triggering Event takes place.

         4. CONDITIONS OF CLOSING. The Purchasers' obligation to purchase and
pay for the Preferred Stock is subject to the satisfaction or waiver prior to or
at the Closing of the following conditions:

                  4A. OPINIONS OF COUNSEL. The Purchasers shall have received
the favorable opinion of Bass, Berry & Sims, PLC, counsel for the Company,
substantially in the form set forth in EXHIBIT D hereto, and covering any other
matters incident to the transactions contemplated hereby as the Purchasers may
reasonably request, dated the Closing Date and addressed to the Purchasers. To
the extent that the opinion referred to above in this paragraph 4A is rendered
in reliance upon the opinion of any other counsel (which other counsel shall be
reasonably acceptable to counsel for the Purchasers), the Purchasers shall have
received a copy of such opinion of such other counsel, dated the Closing Date
and addressed to the Purchasers, or a letter dated the

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Closing Date and addressed to the Purchasers from such other counsel authorizing
the Purchasers to rely thereon.

                  4B. REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The
representations and warranties of the Company contained in this Agreement and
those otherwise made in writing by or on behalf of the Company in connection
with the transactions contemplated by this Agreement and the Other Agreements
shall be true and correct in all material respects as of the time made and at
the time of the Closing as if made again on and as of the Closing Date. There
shall exist at the time of the Closing and after giving effect to the
transactions contemplated hereby no Default or Event of Default.

                  4C. OTHER AGREEMENTS. The Purchasers shall have received a
fully executed counterpart of (i) the Shareholders' Agreement, dated as of April
2, 1992, as amended, substantially in the form of EXHIBIT E (the "Shareholders'
Agreement") and, (ii) the Registration Agreement, dated as of April 2, 1992, as
amended, substantially in the form of EXHIBIT F (the "Registration Agreement")
and at the time of the Closing, both of the Shareholders' Agreement and the
Registration Agreement shall be in full force and effect and no term or
condition thereof shall have been amended, modified or waived.

                  4D. PURCHASE AND LOAN PERMITTED BY APPLICABLE LAWS. The
purchase of and payment for the Preferred Stock shall not violate any applicable
law or governmental regulation (including, without limitation, section 5 of the
Securities Act or Regulation G, T or X of the Board of Governors of the Federal
Reserve System) and shall not subject the Purchasers to any tax, penalty,
liability or other onerous condition under or pursuant to any applicable law or
governmental regulation or order. The issuance, offering and sale of the
Preferred Stock under this Agreement shall have complied with all applicable
requirements of federal and state securities laws. The Purchasers shall have
received such certificates or other evidence as they may request to establish
compliance with the conditions set forth in this paragraph 4D.

                  4E. NO ADVERSE LEGISLATION, ACTION OR DECISION. No
legislation, order, rule, ruling or regulation shall have been enacted or made
by or on behalf of any federal, state or local governmental body, department or
agency of the United States, nor shall have any legislation with an effective
date on or prior to the date hereof been proposed in any federal, state or local
governmental body, department or agency of the United States, nor shall any
decision of any court of competent jurisdiction within the United States have
been rendered which, in the Purchasers' reasonable judgment, would materially
and adversely affect the Preferred Stock as an investment or the business,
condition (financial or other, assets, properties, operations or prospects of
the Company or its Subsidiaries. There shall be no action, suit, investigation
or proceeding pending or, to the best of the Purchasers' or the Company's
knowledge, threatened, against or affecting the Purchasers, the Company, any of
the Purchasers' or the Company's properties or rights, or any of the Purchasers'
or the Company's Affiliates, officers or directors, before any court, arbitrator
or administrative or governmental body which (i) seeks to restrain, enjoin,
prevent the consummation of or otherwise affect the transactions contemplated by
this Agreement and the

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Other Agreements or (ii) questions the validity or legality of any such
transactions or seeks to recover damages or to obtain other relief in connection
with any such transactions, and, to the best of the Purchasers' and the
Company's knowledge, there shall be no valid basis for any such action,
proceeding or investigation.

                  4F. APPROVALS AND CONSENTS. The Company shall have duly
received all authorizations, waivers, consents, approvals, licenses, franchises,
permits and certificates by or of all federal, state and local governmental
authorities and all material consents of all other Persons necessary for the
validity of the authorization, execution, delivery and issuance, as the case may
be, of the Preferred Stock, this Agreement and the Other Agreements and the
consummation of the transactions contemplated hereby and thereby, all of which
shall be in full force and effect at the time of Closing.

                  4G. NO MATERIAL ADVERSE CHANGE. No material adverse change in
the business, condition (financial or other), assets, properties, operations or
prospects of the Company and its Subsidiaries shall have occurred since
September 30, 1996.

                  4H. OFFICER'S CERTIFICATE AS TO FINANCIAL STATEMENTS. The
Purchasers shall have received an Officer's Certificate to the effect that the
consolidated balance sheet of the Company and its Subsidiaries as of September
30, 1996 and the related consolidated statements of operations and retained
earnings for the three-month period then ended (and cash flows for the
nine-month period then ended), fairly present in all material respects the
financial condition and results of operations of the Company and its
Subsidiaries on a consolidated basis in accordance with GAAP, subject to changes
resulting from year-end adjustments and to the absence of footnotes.

                  4I. COMPLIANCE WITH EXISTING DEBT FACILITIES; OTHER
RESTRICTIONS. The Purchasers shall have received a certificate signed by the
Company's Chief Financial Officer and dated the Closing Date to the effect that
the Company and its Subsidiaries (i) are in compliance with all agreements
relating to the Debt of the Company and its Subsidiaries to Suntrust Bank,
Nashville, N.A. ("Suntrust"), and (ii) to the best of the Company's knowledge,
and without conducting an independent investigation thereof, are in compliance
with all other agreements relating to the Debt of the Company. To the best of
the Company's knowledge, and without conducting an independent investigation
thereof, the execution of this Agreement and performance of its obligations
hereunder will not violate any covenants in any such agreements that purport to
(a) limit or restrict the issuance by the Company of the Preferred Stock (b) the
Company's ability or obligation to make any payment due in respect of the
Preferred Stock or perform its other obligations under this Agreement and the
Other Agreements. The Company shall have delivered to the Purchasers (i)
complete copies of all documents or instruments relating to the Debt of the
Company to Suntrust (such documents or instruments collectively, the "Suntrust
Agreement"), and (ii) the consent (the "Consent") of Suntrust to the issuance of
and sale by the Company of the Preferred Stock pursuant to the terms of the
Purchase Agreement and the terms of the Designations for the Redeemable Stock
and the Convertible Stock. A copy of the Suntrust

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Amended and Restated Loan Agreement dated as of June 25, 1996, is attached
hereto as EXHIBIT G. A copy of the Consent is attached hereto as EXHIBIT H.

                  4J. PROCEEDINGS; COMPLIANCE CERTIFICATE. All proceedings taken
or to be taken in connection with the transactions contemplated hereby and under
the Other Agreements, and all documents incident thereto, shall be reasonably
satisfactory in form and substance to the Purchasers and their counsel, and the
Purchasers and their counsel shall have received all such counterpart originals
or certified or other copies of such documents as the Purchasers or their
counsel may reasonably request. The Company shall have delivered to the
Purchasers an Officers' Certificate, dated the Closing Date, confirming the
satisfaction of the conditions specified in paragraphs 4B, 4E, 4F and 4G on and
as of the Closing Date.

                  4K. PROJECTIONS. There shall have been provided to the
Purchasers the projected annual financial results for the Company and its
Subsidiaries and Affiliates for each of the years ending December 31, 1996
through December 31, 2000, stating any assumptions underlying such projections,
all of which are set forth in the Company's Confidential Offering Memorandum of
July 1996 (the "Offering Memorandum") attached hereto as EXHIBIT I.

                  4L. STRUCTURE. All actions necessary or desirable shall have
been taken to effect the following results: (i) all of the issued and
outstanding Capital Stock of the Company shall be owned as set forth in SCHEDULE
4L; and (ii) a majority of all of the outstanding Capital Stock of the
Subsidiaries shall be owned directly by the Company as set forth in Schedule 8A.

                  4M. CLOSING TRANSACTION FEE. Electra, Inc. and CHC shall have
received payment of their Closing Transaction Fees and the Expenses.

                  4N. PURCHASERS' DUE DILIGENCE REVIEW. The Purchasers shall
have completed to their satisfaction a due diligence review of the Company, its
business, assets, and liabilities, and the Company shall have furnished to the
Purchasers and their representatives such information as may reasonably be
required for such purposes, including financial projections reasonably
satisfactory to Purchasers, a business plan and the intended use of the proceeds
of this sale of Preferred Stock.

         5. AFFIRMATIVE COVENANTS. The Company covenants as follows from and
after the date of this Agreement and until the earliest to occur of (i) a
Triggering Event, (ii) a Spin Off and (iii) the date the Required Holder(s)
cease(s) to own 25% or more of the Redeemable Stock or the Convertible Stock
purchased by them, or the Common Stock of the Company received upon conversion
thereof (on a fully-diluted and as-converted basis) held by such Required
Holder(s), in the aggregate.

                  5A. FINANCIAL STATEMENTS AND OTHER INFORMATION. The Company
will deliver, or cause to be delivered to each Purchaser:

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                  (i) as soon as available and in any event within 45 days after
         the end of each of the first three fiscal quarters, the unaudited
         consolidated balance sheets of the Company as of the end of such fiscal
         quarter, and the unaudited consolidated and consolidating statements of
         income of the Company and its consolidated Subsidiaries for such
         quarter and for a period from the beginning of the fiscal year to the
         close of such fiscal quarter, all certified by the chief financial
         officer or chief accounting officer of the Company as being true and
         correct to the best of his or her knowledge;

                  (ii) as soon as available, and in any event within 90 days
         after the close of each fiscal year, the audited consolidated financial
         statements of the Company setting forth the audited consolidated
         balance sheets of the Company as at the end of such year, and the
         audited consolidated statements of income, statements of cash flows,
         and consolidated statements of retained earnings of the Company for
         such year, setting forth in each case in comparative form, other than
         as to cash flow, (beginning when comparative data are available) the
         corresponding figures for the preceding fiscal year accompanied by the
         report of the Company's certified public accountants, and by an
         unaudited consolidating balance sheet and unaudited consolidating
         statements of income of the Company and its Subsidiaries and duly
         certified by the Company's chief financial officer as being correct
         reflections of the information used for the audited consolidated
         financial statements. The audit opinion in respect of the financial
         statements of the Company shall be the opinion of a firm of independent
         certified public accountants reasonably acceptable to the Required
         Holder(s); and

                  (iii) together with each delivery of financial statements
         required by clauses (i) and (ii) above, an Officers' Certificate
         stating that the signers have reviewed the terms of this Agreement and
         the Preferred Stock and have made, or caused to be made under their
         supervision, a review in reasonable detail of the transactions and
         condition of the Company and its Subsidiaries during the fiscal period
         covered by such financial statements and further that such review has
         not disclosed the existence during or at the end of such fiscal period,
         and that the signers do not have knowledge of the existence, as of the
         date of the Officers' Certificate, of any condition or event which
         constitutes a Default or Event of Default or, if any such condition or
         event existed or exists, specifying the nature and period of existence
         thereof and what action the Company has taken or is taking or proposes
         to take with respect thereto.

                  5B. INSPECTION OF PROPERTY. Upon the occurrence and during the
continuation of a Default or Event of Default, any Required Holder of Preferred
Stock, acting alone, shall be entitled to visit and inspect any of the
properties of the Company and its Subsidiaries, to examine the books and
financial records of the Company and its Subsidiaries and make copies thereof or
extracts therefrom and to discuss its affairs, finances and accounts with its
officers and its and their independent public accountants, all at reasonable
times and upon reasonable prior notice to the Company. All expenses incurred by
such holder in connection with such holder's exercise of rights pursuant to this
paragraph 5B shall be borne by such holder, except that the Company

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agrees to pay all reasonable out-of-pocket expenses incurred by any such
Required Holder in connection with such exercise of rights at any time when a
Default or an Event of Default has occurred and is continuing.

                  5C. ACCOUNTANTS. The Company will continue to engage Deloitte
& Touche, LLP or another "big six" accounting firm to serve as its independent
public accountants.

                  5D. MAINTENANCE OF PROPERTIES; INSURANCE. The Company and its
Subsidiaries will maintain or cause to be maintained in good repair, working
order and condition all properties used or useful in the business of the Company
and its Subsidiaries and from time to time will make or cause to be made all
appropriate repairs, renewals and replacements thereof. The Company and its
Subsidiaries will maintain or cause to be maintained, with financially sound and
reputable insurers (or, as to workers' compensation or similar insurance, in an
insurance fund or by self-insurance authorized by the laws of the jurisdiction
in question), insurance with respect to their respective properties and
businesses against loss or damage of the kinds customarily insured against by
corporations of established reputation engaged in the same or similar businesses
and similarly situated, of such type and in such amounts as are customarily
carried under similar circumstances by such other corporations and as are in
good faith believed by the Company to be sufficient to prevent the Company and
its Subsidiaries from becoming a co-insurer within the terms of the policies in
question.

                  5E. BOARD COMMITTEES. The Company has established, or will
establish no later than the next regularly scheduled Board meeting (presently
scheduled for January 1997), and will cause to remain in existence an audit
committee and a compensation committee of its Board of Directors, with such
duties and responsibilities typical of audit and compensation committees.

                  5F. CORPORATE EXISTENCE, ETC. The Company and each of its
Subsidiaries will at all times preserve and keep in full force and effect its
corporate existence, and rights, licenses and franchises material to its
business, and will qualify to do business in any jurisdiction where the failure
to do so would have a material adverse effect on the business, condition
(financial or other), assets, properties or operations of the Company or such
Subsidiary. The Company will duly call and hold shareholders meetings not less
frequently than once each year. The Company will duly call and hold meetings of
its Board of Directors (and its audit and compensation committees) not less
frequently than once each fiscal quarter.

                  5G. PAYMENT OF TAXES, CLAIMS AND SENIOR DEBT. The Company and
each of its Subsidiaries will pay all taxes, assessments and other governmental
charges imposed upon them or any of their respective properties or assets or in
respect of any of their respective franchises, business income or properties
before any significant penalty or significant interest accrues thereon, and all
claims (including, without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable, provided that no such
charge or claim need be paid if being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted and if such accrual or
other appropriate provision, if any, as shall be required by

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GAAP shall have been made therefor. The Company will duly and punctually pay
when due all payments required to be made under and pursuant to the Senior Debt.

                  5H. COMPLIANCE WITH LAWS, ETC. The Company will, and will
cause each of its Subsidiaries to, comply with the requirements of all
applicable laws, rules, regulations, and orders of any court or other
governmental authority (including, without limitation, those related to
environmental or ERISA compliance), noncompliance with which could materially
adversely affect the business, condition (financial or other), assets, property,
operations or prospects of the Company or the Company and its Subsidiaries taken
as a whole.

                  5I. SECURITIES FILINGS. From and after the date that any class
of the Company's capital stock is traded on the public securities markets, the
Company will (i) comply, in all material respects, with the reporting
requirements of the Exchange Act and (ii) comply, in all material respects, with
all other public information reporting requirements of the Commission that are a
condition to the availability of an exemption from the Securities Act (under
Rule 144 and Rule 144A thereof, as amended from time to time, or successor rules
thereto or otherwise) for the sale of Common Stock received by any holder of
Preferred Stock upon the conversion thereof. The Company will cooperate with
each holder in supplying such information as may be necessary for such holder to
complete and file any information reporting forms presently or hereafter
required by the Commission as a condition to the availability of an exemption
from the Securities Act (under Rule 144 and Rule 144A thereof or otherwise) for
the sale of any such Common Stock.

                  5J. RESERVATION OF SHARES. On or prior to the Closing Date,
the Company will reserve and keep reserved at all times sufficient shares of its
Common Stock for (i) issuance upon conversion of the Preferred Stock exercise of
options pursuant to the Company's Stock Option Plan, and pursuant to the
exercise of other options granted by the Company, and (ii) issuance by the
Company in the normal course of its business of acquiring and developing
practice-based surgery centers and physician practices. Upon conversion of
Preferred Stock the Company will promptly issue and deliver the shares of Common
Stock required to be delivered, and such shares, when issued and delivered, will
be validly issued, fully paid and nonassessable.

                  5K. HART-SCOTT FILINGS. At the request of any holder of
Preferred Stock, the Company or its "ultimate parent" (as defined in the
Hart-Scott Act) will promptly prepare and file, or cause to be prepared and
filed, any notification or response to any request for additional information
required to be filed under the Hart-Scott Act and the rules and regulations
promulgated thereunder with respect to the acquisition of shares of Common Stock
by such holder upon conversion of such holder's Preferred Stock.

                  5L. USE OF PROCEEDS. The Company will apply the proceeds from
the sale and issuance of the Preferred Stock for working capital, acquisitions
and Debt repayment.

         6. NEGATIVE COVENANTS. The Company covenants as follows from and after
the date of this Agreement through the Closing and until the earliest to occur
of (i) a Triggering

                                        8


<PAGE>   13



Event, (ii) a Spin Off, and (iii) the date the Required Holder(s) cease(s) to
own 25% or more of the Redeemable Stock or Convertible Stock purchased by them
or the Common Stock of the Company received upon conversion thereof (on a
fully-diluted and as-converted basis) held by such Required Holder(s), in the
aggregate.

                 6A. LIMITATION ON DEBT. The Company will not, and will not
permit any of its Subsidiaries to create, assume or incur, or become or at any
time be liable in respect of, any Debt:

                  (i) in excess of $40,000,000; or

                  (ii) in violation of any limitation on Debt that has not been
         waived contained in the Suntrust Agreement, or any amendment,
         extension, refunding or replacement thereof.

                  6B. RESTRICTIONS ON SALES, MERGERS AND CONSOLIDATIONS. Without
the prior written consent of the Required Holder(s), the Company will not, and
will not permit any of its Subsidiaries to: (i) lease a Substantial Part of its
properties (or any of its divisions or businesses) substantially as an entirety
to any Person; (ii) consolidate or merge with any other Person, or sell or
otherwise dispose of all or a Substantial Part of its properties or business or
any of its divisions or businesses, except in a transaction constituting a
Triggering Event; (iii) liquidate, wind up or dissolve (or suffer any
liquidation or dissolution); or (iv) convey, sell, lease, transfer or otherwise
dispose of, in one transaction or a series of transactions, all or any
Substantial Part of its business, property or fixed assets, whether now owned or
hereafter acquired, except in a transaction constituting a Triggering Event.

                  6C. RESTRICTIONS ON DIVIDENDS, ISSUANCE OF CAPITAL STOCK.

                  (i) Except as otherwise permitted in this Agreement, the Other
         Agreements, the Redeemable Certificate of Designation, and the
         Convertible Certificate of Designation, the Company will not pay any
         dividends, in cash or otherwise, or make any distributions, to its
         shareholders, or purchase, redeem or otherwise acquire any of its
         outstanding Capital Stock, or set apart assets for a sinking or other
         analogous fund for the purchase, redemption, retirement or other
         acquisition of, any shares of its Capital Stock; provided, however,
         that the Company may (a) make payments to AHC, pursuant to arms-length
         management services, administrative services or other agreements
         approved by the Company's Board of Directors, (b) purchase shares for
         an aggregate purchase price of not more than $750,000 pursuant to
         agreements executed by the Company in connection with acquisitions of
         physician practices, surgery centers and surgery center development
         transactions, and (c) pay cash in lieu of fractional shares of its
         Common Stock on exercise of outstanding options to purchase its Common
         Stock and on conversion of Preferred Stock.


                                        9


<PAGE>   14



                  (ii) Without the prior written consent (which consent shall
         not be unreasonably withheld) of the Required Holder(s), the Company
         will not issue, sell or otherwise dispose of any of its Capital Stock
         or the Capital Stock of any of its Subsidiaries, other than (a) upon
         the conversion of shares of Preferred Stock; (b) pursuant to the Stock
         Option Plan, provided that the shares issued pursuant to options
         granted thereunder do not exceed 15% of the outstanding shares of
         Common Stock as of the date hereof; (c) in a Qualified Initial Public
         Offering; (d) as issued to physicians affiliated with surgery centers
         or physician practices and in the ordinary course of the Company's
         acquisitions of physician practices, surgery centers and surgery center
         development transactions, provided that such shares shall not be issued
         or sold at less than fair value therefor as determined in accordance
         with a valuation methodology developed by J.C. Bradford & Co. and
         generally utilized by the Company; (e) pursuant to a private equity
         financing which conforms with Section 6C(iii) of the Company in the
         absence of a Spin Off; or (f) pursuant to a Spin Off, provided that it
         shall be a condition of the issuance of such shares that the Company
         obtain a Private Letter ruling from the Internal Revenue Service to the
         effect that, among other things, the issuance of such shares qualifies
         as a reorganization within the meaning of Section 368(a)(1)(E) of the
         Code and the distribution of such shares will qualify as a tax-free
         distribution under Section 355 of the Code.

                  (iii) The Company shall not issue or sell, any shares of
         Common Stock or any warrants, options or other rights to subscribe for
         or purchase any such additional shares at a price per share for which
         Common Stock is issuable upon the exercise of such warrants, options or
         other rights that is less than the Current Market Price in effect
         immediately prior to such issue or sale.

                  (iv) Until the occurrence of a Qualified IPO, the Company
         shall not undertake an underwritten initial public offering resulting
         in a sale by the Company of Common Stock to the public at an aggregate
         offering price for the shares sold for the account of the Company of
         less than $20,000,000 without the affirmative vote of a majority of the
         shares of the Series A Redeemable Preferred Stock and the Series B
         Convertible Preferred Stock voting together as a single class.

                  6D. TRANSACTIONS WITH AFFILIATES. Except as set forth in
SCHEDULE 6D, the Company and its Subsidiaries are not parties to any material
contract, agreement or other understanding with any Affiliate. The Company will
not, and will not permit any of its Subsidiaries to, make any loans or advances
to any of their respective officers, directors, shareholders or Affiliates
(other than the Company or another Subsidiary), other than: (a) expense advances
made by the Company or such Subsidiary to its officers and employees in the
ordinary course of business and (b) other loans and advances to officers of the
Company or such Subsidiary in an aggregate principal amount outstanding at any
time not to exceed $200,000. The Company will not, and will not permit, any of
its Subsidiaries to, engage in any transactions with Affiliates (other than the
Company or another Subsidiary) other than in the ordinary course of business and

                                       10


<PAGE>   15



on terms no less favorable to the Company or such Subsidiary than those
obtainable from unaffiliated third parties.

                  6E. CHANGE OF ACCOUNTANTS, ACCOUNTING PRACTICES. The Company
will not change its accountants without the prior written consent of the
Required Holder(s), which consent shall not be unreasonably withheld, and the
Company will not change its accounting practices except in compliance with GAAP.

                  6F. LIMITATIONS ON SALE. Except for a Permitted Sale (as
defined herein), the Company will not, and will not permit any of its
Subsidiaries to, sell, transfer or otherwise dispose, in a single transaction or
a series of related transactions, a Substantial Part of the Company's stock,
property or assets, without the prior written consent of the Required Holder(s).
A "Permitted Sale" shall mean (i) the sale, abandonment or other disposition of
obsolete or worn out property or assets or property or assets no longer useful
in the Company's business in the ordinary course of business; or (ii) the sale
or other disposition of any property or assets in the ordinary course of
business.

                  6G. CHANGE IN BUSINESS. The Company will not cause or effect
a Change in Business.

                  6H. RESTRICTIONS ON PAYMENT. Except as set forth in SCHEDULE
6H, the Company will not be bound by any instrument and will not, and will not
permit any of its Subsidiaries to, enter into, become a party to or otherwise
become subject to any instrument evidencing or governing the terms of any Debt
or other contract or agreement or any amendments or modifications of the
foregoing, the provisions of which restrict or limit the Company's ability or
obligation to make any payment due in respect of the Preferred Stock or perform
its other obligations under this Agreement and the Other Agreements.

                  6I. NO AMENDMENT OF ORGANIZATIONAL DOCUMENTS. The Company will
not permit any amendment of or modification to its Articles of Incorporation or
Bylaws without the written consent of the Required Holder(s), which consent will
not be unreasonably withheld, which amendment or modification would adversely
affect the rights of the Purchasers.

                  6J. COMPLIANCE WITH ERISA.  The Company will not, and will 
not permit any of its ERISA Affiliates to:

                  (i) engage in any transaction in connection with which the
         Company or any of its Subsidiaries could be subject to either a
         material civil penalty assessed pursuant to section 502(i) or (1) of
         ERISA or a material tax imposed by section 4975 of the Code;

                  (ii) terminate or partially terminate any Plan, or withdraw or
         partially withdraw from a Multiemployer Plan, in a manner, or take any
         other action, which in any case may

                                       11


<PAGE>   16



         reasonably be expected to result in any material liability of the
         Company or any of its ERISA Affiliates to the PBGC or any Multiemployer
         Plan;

                  (iii) fail to make full payment when due of all amounts which,
         under the provisions of any Plan, the Company or any of its ERISA
         Affiliates is required to pay as contributions thereto under section
         302 of ERISA and section 412 of the Code, or permit to exist any
         accumulated funding deficiency, whether or not waived, with respect to
         any such Plan (other than a Multiemployer Plan);

                  (iv) fail to make full payment when due of all amounts which,
         under the provisions of any Multiemployer Plan or collective bargaining
         agreement, the Company or any of its ERISA Affiliates is required to
         pay as contributions thereto. The Company agrees (x) upon the request
         of any Purchaser to use its best efforts to obtain a current statement
         of withdrawal liability from each Multiemployer Plan to which the
         Company or any of its ERISA Affiliates contributes or to which the
         Company or any of its ERISA Affiliates has an obligation to contribute
         and (y) to transmit a copy of such statement to each Purchaser, so long
         as such Purchaser or its nominee shall be the holder of any shares of
         Preferred Stock, and to each other Purchaser, within 15 days after the
         Company receives the same; or

                  (v) amend or permit an ERISA Affiliate to amend a Plan
         resulting in an increase in current liability for the plan year such
         that either the Company or an ERISA Affiliate is required to provide
         security to such Plan under section 401 (a)(29) of the Code.

                  6K. FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT. The Company 
will not become a "United States real property holding corporation," as defined
in section 897 of the Code and in applicable regulations thereunder.

         7.       EVENTS OF DEFAULT. If any of the following events shall occur
and be continuing for any reason whatsoever (and whether such occurrence shall
be voluntary or involuntary or come about or be effected by operation of law or
otherwise), such event shall constitute an Event of Default:

                  (i) the Company defaults in the payment of any other amount
         due from time to time under this Agreement or any of the Other
         Agreements (provided that the Company has been notified of such other
         amount due and such default shall continue for ten days after the date
         of such notice); or

                  (ii) the Company or any of its Subsidiaries defaults in any
         payment of principal of or interest on any Debt (excluding trade
         payables) in excess of $500,000 or any covenant or obligation contained
         in any document governing the terms of any such debt beyond any period
         of grace provided with respect thereto and the effect of such failure
         is

                                       12


<PAGE>   17



         to cause such Debt to become due or to be repurchased or otherwise
         retired prior to stated maturity thereof; or

                  (iii) any representation or warranty made in writing by or on
         behalf of the Company in this Agreement or in any of the Other
         Agreements or in any writing furnished in connection with or pursuant
         to this Agreement or in any of the Other Agreements or in connection
         with the transactions contemplated by this Agreement shall be false in
         any material respect on the date as of which made; or

                  (iv) the Company fails to perform or observe any agreement
         contained in paragraphs 5I or 5J, or paragraph 6, and such default
         continues for 30 Business Days after notice thereof to the Company; or

                  (v) the Company shall fail to perform or observe any other
         material agreement, term or condition contained in this Agreement or in
         any of the Other Agreements, and such failure shall not have been
         remedied within 30 days after such failure shall first have become
         known to any Responsible Officer of the Company or written notice
         thereof shall have been received by the Company (regardless of the
         source of such notice); or

                  (vi) the Company or any of its Subsidiaries (other than
         Inactive Companies) makes an assignment for the benefit of creditors or
         is generally not paying its debts as such debts become due; or

                  (vii) any order or decree for relief in respect of the Company
         or any of its Subsidiaries (other than the Inactive Companies) is
         entered under any bankruptcy, reorganization, compromise, arrangement,
         insolvency, readjustment of debt, dissolution or liquidation or similar
         law, whether now or hereafter in effect (herein called the "Bankruptcy
         Law"), of any jurisdiction; or

                  (viii) the Company or any of its Subsidiaries (other than the
         Inactive Companies) petitions or applies to any tribunal for, or
         consents to, the appointment of, or taking possession by, a trustee,
         receiver, custodian, liquidator or similar official of the Company or
         any of its Subsidiaries (other than the Inactive Companies), or of any
         Substantial Part of the assets of the Company or any of its
         Subsidiaries (other than the Inactive Companies), or commences a
         voluntary case under the Bankruptcy Law of the United States or any
         proceedings (other than proceedings for the voluntary liquidation and
         dissolution of a Subsidiary) relating to the Company or any of its
         Subsidiaries (other than the Inactive Companies) under the Bankruptcy
         Law of any other jurisdiction; or

                  (ix) any petition or application described in clause (x) below
         is filed, or any such proceedings are commenced, against the Company or
         any of its Subsidiaries (other than the Inactive Companies) and the
         Company or such Subsidiary by any act indicates its approval thereof,
         consent thereto or acquiescence therein, or an order, judgment or
         decree

                                       13


<PAGE>   18



         is entered appointing any such trustee, receiver, custodian, liquidator
         or similar official, or approving the petition in any such proceedings,
         and such order, judgment or decree remains unstayed and in effect for
         more than 60 days; or

                  (x) any order, judgment or decree is entered in any
         proceedings against the Company or any of its Subsidiaries (other than
         the Inactive Companies) decreeing the dissolution of the Company or
         such Subsidiary and such order, judgment or decree remains unstayed and
         in effect for more than 60 days; or

                  (xi) any order, judgment or decree is entered in any
         proceedings against the Company or any of its Subsidiaries (other than
         the Inactive Companies) decreeing a split-up of the Company or such
         Subsidiary which requires the divestiture of a Substantial Part, or the
         divestiture of the stock of a Subsidiary of the Company the assets of
         which constitute a Substantial Part, of the assets of the Company and
         its Subsidiaries and such order, judgment or decree remains unstayed
         and in effect for more than 60 days; or

                  (xii) a final judgment (not fully covered by insurance) in an
         amount in excess of $500,000 is rendered against the Company or any of
         its Subsidiaries (other than the Inactive Companies) and, within 30
         Business Days after entry thereof, such judgment is not discharged or
         execution thereof stayed pending appeal, or within 30 days after the
         expiration of any such stay, such judgment is not discharged.

                  7A. PURCHASERS' REMEDIES.

                  (i) Upon the occurrence of an Event of Default and subject to
         any rights of cure set forth in this Agreement, the holder of any
         shares of Preferred Stock may proceed to protect and enforce its rights
         under this Agreement and the Articles of Amendment by exercising such
         remedies as are available to such holder in respect thereof under
         applicable law, either by suit in equity or by action at law, or both,
         whether for specific performance of any covenant or other agreement
         contained in this Agreement or in aid of the exercise of any power
         granted in this Agreement. Subject to section 7A(ii), no remedy
         conferred in this Agreement upon the holder of any shares of Preferred
         Stock is intended to be exclusive of any other remedy, and each and
         every such remedy shall be cumulative and shall be in addition to every
         other remedy conferred herein or now or hereafter existing at law or in
         equity or by statute or otherwise.

                  (ii) In the event that (a) Suntrust refuses to give its
         consent pursuant to Exhibit I (the "Consent") to the payment of a
         dividend, or (b) the enforcement of any right or remedy accorded to the
         holders pursuant to paragraph 7A would violate, or cause the Company to
         be in violation of, or otherwise be restricted by, any covenant
         contained in, any Debt agreement or instrument to which the Company or
         any of its Subsidiaries is or may be a party and upon the written
         request by the Company to each holder, the holders agree to not assert
         any such right or remedy, as the case may be, the Company will

                                       14


<PAGE>   19



         thereafter and until Suntrust shall give its consent or until such
         Event of Default is cured, pay or accrue to the holders a cumulative
         dividend of 14% of the purchase price per annum per each share of
         Preferred Stock payable quarterly in cash. Upon such consent or cure by
         the Company, and upon payment of all due and accrued dividends, the
         cumulative dividend per share shall thereupon reduce to the dividend,
         if any, to which the holders would be entitled but for the failure of
         Suntrust to give its consent or such Event of Default.

         8.       REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company 
represents, covenants and warrants as follows:

                  8A. ORGANIZATION: CORPORATE AUTHORITY.

                  (i) The Company is a corporation duly organized, validly
         existing and in good standing under the laws of Tennessee and has all
         requisite corporate power and authority to own and operate its
         properties and to carry on its business, as it is now conducted. The
         Company has all requisite corporate power and authority to enter into
         and perform all of its obligations under this Agreement and the Other
         Agreements and to issue and sell the Preferred Stock as contemplated
         hereby. The execution, delivery and performance of this Agreement, the
         Other Agreements and the Preferred Stock have been duly authorized by
         the Board of Directors and all other necessary action on the part of
         the Company. The Company is duly qualified and in good standing as a
         foreign corporation authorized to do business in each jurisdiction in
         which the character of the properties owned or held under lease by it
         or the nature of the business transacted by it requires such
         qualification, except where the failure to be so qualified would not
         have a material adverse effect on the Company. The Company has all
         requisite power and authority to own or hold under lease the properties
         it purports to own or hold under lease and to carry on its business as
         now being conducted.

                  (ii) SCHEDULE 8A is a complete and correct list identifying
         each Subsidiary of the Company as of the date of this Agreement and
         showing, as to each such Subsidiary, the correct name thereof, the
         jurisdiction of its organization and the percentage of shares of each
         class of securities of such Subsidiary owned by the Company or another
         Subsidiary of the Company. All of the outstanding shares or other
         ownership interests of each of the Subsidiaries shown in Schedule 8A
         have been validly issued, are fully paid and nonassessable and are
         owned by the Company or another Subsidiary of the Company free and
         clear of any Lien or encumbrance. No Subsidiary of the Company owns any
         shares or other ownership interests of the Company.

                  Each Subsidiary of the Company is duly organized and validly
existing and is duly qualified and in good standing as an entity authorized to
do business in each jurisdiction in which the character of the properties owned
or held under lease by it or the nature of the business transacted by it
requires such qualification, except where failure to be so qualified would not
have

                                       15


<PAGE>   20



a materially adverse effect on such Subsidiary. Each such Subsidiary has all
requisite power and authority to own or hold under lease the properties it
purports to own or hold under lease and to carry on its business as now being
conducted.

                  8B. BUSINESS; FINANCIAL STATEMENTS.

                  (i) The Company has furnished the Purchasers with the
         following financial statements: (i) the audited consolidated and
         consolidating balance sheets of the Company at December 31, 1995 and
         the related audited statements of operations, stockholders' equity and
         cash flows for each of the two years in the period ended December 31,
         1995, all reported on by Deloitte & Touche, LLP, and (ii) the
         unaudited consolidated and consolidating balance sheet of the Company
         at September 30, 1996 and the related unaudited statement of
         operations, stockholders' equity and cash flows for the period ended on
         such date (the "Historical Financial Statements"). The Historical
         Financial Statements (i) have been prepared in conformity with GAAP
         applied on a consistent basis and disclose all liabilities, direct and
         contingent, required to be shown in accordance with such principles and
         (ii) present fairly the financial position of the Company at the dates
         indicated and results of operations for the periods indicated (subject,
         in the case of such unaudited financial statements, to normal year-end
         and audit adjustments and the absence of footnotes).

                  (ii) No document, certificate or written statement furnished
         to the Purchasers by or on behalf of the Company in connection with the
         transactions contemplated hereby contains any untrue statement of a
         material fact or omits to state a material fact necessary in order to
         make the statements contained therein, in the light of the
         circumstances under which they were made, not misleading.

                  (iii) Except as set forth in SCHEDULE 8B, no event has
         occurred peculiar to the Company or any of its Subsidiaries which
         materially adversely affects or in the future would reasonably be
         expected to (so far as the Company can now reasonably foresee)
         materially adversely affect the business, prospects, condition
         (financial or other) or operations of the Company or any of its
         Subsidiaries which has not been disclosed in this Agreement. The
         Company and its Subsidiaries have not sustained since September 30,
         1996 any loss or interference with its business from fire, explosion,
         flood or other calamity, whether or not covered by insurance, or from
         any labor dispute or court or governmental action, order or decree
         which is material to the Company or any of its Subsidiaries; and,
         except as contemplated hereby, since September 30, 1996, there has not
         been any material change in the outstanding capital stock or long-term
         or short-term debt of the Company or any of its Subsidiaries or in the
         capitalization of the Company or any material adverse change, or any
         development which the Company has reasonable cause to believe (so far
         as the Company can now reasonably foresee) will involve a prospective
         material adverse change, in or affecting the business, condition
         (financial or other), assets, properties, operations or prospects of
         the Company or any of its Subsidiaries.

                                       16


<PAGE>   21



                  8C. CAPITAL STOCK AND RELATED MATTERS. As of the Closing Date
(or other indicated date) and after giving effect to the transactions
contemplated hereby (i) the authorized Capital Stock of the Company will consist
of 40,000,000 shares of Common Stock, and 5,000,000 shares of Preferred Stock,
of which 27,292,677 shares of Common Stock and 2,750,000 shares of Preferred
Stock will be issued and outstanding, 2,830,000 shares of Common Stock will be
reserved for issuance pursuant to the Stock Option Plan, (ii) no shares of
Common Stock will be owned or held by or for the account of the Company as
treasury stock or otherwise, (iii) the Company will not have outstanding any
stock or other securities convertible into or exchangeable for any shares of
Capital Stock any rights to subscribe for or to purchase, or any options for the
purchase of, or any agreements providing for the issuance (contingent or other)
of, or any calls, commitments or claims of any other character relating to the
issuance of, any Capital Stock or any stock or preferred stock convertible into
or exchangeable for any Capital Stock (other than the Preferred Stock described
in clause (i) above or as described in SCHEDULE 8C hereto) and (iv) stock which
the Company may issue as a result of any "fundamental regulatory change"
pursuant to documents which it has executed in connection with any surgery
center acquisition or development transactions. Except pursuant to this
Agreement, or as set forth in Schedule 8C, the Company will not be subject to
any obligation (contingent or other) to repurchase, otherwise acquire or retire
any shares of Capital Stock. Except pursuant to the Shareholders' Agreement, the
Registration Agreement, dated as of April 2, 1992, as amended, and all
shareholders agreements to which the Company is a party in connection with the
acquisition of surgery centers or physician practices or the development of
surgery centers, the Company has not granted or agreed to grant any rights
relating to the registration of the Common or Preferred Stock under applicable
federal and state securities laws, including piggyback rights.

                  8D. LITIGATION. There are no claims, actions, suits,
proceedings, labor disputes or investigations in process by or against the
Company or any of its Subsidiaries or, to the best knowledge of the Company,
threatened either by a written communication directed to the Company or any of
its Subsidiaries or by an oral communication directed to the Company or any of
its Subsidiaries by a stockholder of the Company, before any federal or state
court, arbitrator or governmental authority by or against the Company or any of
its Subsidiaries, except actions, suits or proceedings which (A) individually do
not represent a potential claim in excess of $50,000 and (B) in the aggregate,
if adversely determined, would not result in any material liability or material
adverse change in the business, condition (financial or other), assets,
properties, operations or prospects of the Company. There are no such claims,
actions, suits, proceedings, disputes or investigations which question the
validity or legality of or seek damages in connection with this Agreement or the
Other Agreements or any action taken or to be taken pursuant to this Agreement
or the Other Agreements. There are no outstanding judgments, decrees or orders
of any court or governmental authority against the Company or any of its
Subsidiaries which may reasonably be expected to result in any material adverse
change in the business, condition (financial or other), assets, properties,
operations or prospects of the Company or in any liability on the part of the
Company or its Subsidiaries which would be material to the Company or any of its
Subsidiaries.


                                       17


<PAGE>   22



                  8E. OUTSTANDING DEBT. After giving effect to the Closing and
the transactions contemplated by this Agreement and the Other Agreements there
will exist no default(s) by the Company or any of its Subsidiaries under the
provisions of any instrument evidencing any Debt or of any agreement relating
thereto which default(s) exceeds $1,000,000 in the aggregate.

                  8F. TITLE TO PROPERTIES. The Company and each of its
Subsidiaries has good and marketable title to all of its respective properties
and assets, owned by any of them, free and clear of all Liens other than Liens
in connection with existing Debt. The Company and each of its Subsidiaries
enjoys peaceful and undisturbed possession under all leases and subleases
necessary in any material respect for the operation of its properties and
businesses; and none of such leases or subleases contain any unusual and
burdensome provisions which might reasonably be expected to materially adversely
affect or impair the operation of such properties and businesses. Except to
perfect and protect security interests in connection with existing Debt at the
time of the Closing, (i) no effective financing statement under the Uniform
Commercial Code which names the Company or any of its Subsidiaries as debtor or
lessee will be on file in any jurisdiction and (ii) neither the Company nor any
of its Subsidiaries will have signed any effective financing statement or any
effective security agreement authorizing any secured party thereunder to file
any such financing statement.

                  8G. TAXES. The Company and each of its Subsidiaries has filed
all tax returns required by law to be filed by it (or obtained valid extensions
thereof), and all taxes, assessments and other governmental charges levied upon
the Company or any of its Subsidiaries or any of their respective properties,
assets, income or franchises which are due and payable, other than those
presently payable without penalty or interest, have been paid, other than
charges or claims being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted and with respect to which an
accrual or other appropriate provision, if any, as required by GAAP shall have
been made therefor. There are no tax liens upon any assets of the Company or any
of its Subsidiaries.

                  8H. CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the
execution or delivery of this Agreement or the Preferred Stock or the Other
Agreements, nor the offering, issuance and sale of the Preferred Stock, nor
fulfillment of or any compliance with the terms and provisions hereof and
thereof, will conflict with, or result in a breach of the terms, conditions or
provisions of, or constitute a default under, or result in any violation of, or
result in the creation of any Lien upon any of the properties or assets of the
Company or any of its Subsidiaries pursuant to, the charter or Bylaws of the
Company or any of its Subsidiaries, any award of any arbitrator or any material
agreement, instrument, order, judgment, decree, statute, law, rule or regulation
to which the Company or any of its Subsidiaries, or any of their respective
properties or assets is subject. Other than with respect to the Suntrust
Agreement, the Company is not a party to or otherwise subject to any contract or
agreement which limits the amounts of, or otherwise imposes restrictions on, the
incurring of Debt or which contains dividend or redemption limitations on any
Capital Stock of the Company, or which restricts the issuance of the Preferred
Stock, except for this Agreement.

                                       18


<PAGE>   23



                  8I. PATENTS, ETC. All patents, trademarks, service marks,
trade names, licenses, franchises or other rights (collectively, "Intangible
Rights") owned or held by the Company and its Subsidiaries that are material to
the business of the Company and its Subsidiaries are described on SCHEDULE 8I
hereto. All such Intangible Rights are free and clear of any Lien. Nothing has
come to the attention of the Company and its Subsidiaries to the effect that (i)
any activity in operating the business of the Company and its Subsidiaries as
presently conducted or as proposed to be conducted may infringe any patent,
trademark, service mark, trade name, copyright, permit, license, franchise or
other right owned by any other Person, (ii) there is pending or threatened any
claim or litigation against or affecting the Company or any of its Subsidiaries
contesting its right to carry on such activities or (iii) there is, or there is
pending or proposed, any statute, law, rule, regulation, standard or code which
would prevent or inhibit, or substantially reduce the projected revenues of, or
otherwise adversely affect the business, condition (financial or other), or
operations of, the Company or any of its Subsidiaries, other than any statute,
law, rule, regulation, standard or code which would be applicable to all
companies or other businesses conducting business in the applicable
jurisdiction.

                  8J. PRIVATE OFFERING. Neither the Company nor anyone acting on
behalf of the Company has, directly or indirectly, offered any of the Preferred
Stock or any similar security of the Company, and neither the Company nor any
agent acting on its behalf has taken or will take any action which would subject
the issuance or sale of any of the Preferred Stock to the provisions of section
5 of the Securities Act or to the provisions of any securities or Blue Sky law
of any applicable jurisdiction.

                  8K. BROKER'S OR FINDER'S COMMISSIONS; TRANSACTION FEES. No
broker's or finder's fee, commissions (whether payable in cash, any equity
interest in the Company or any of its Subsidiaries or Affiliates, or any other
form of compensation), or other transaction fees will be payable by the Company
with respect to the issuance and sale of the Preferred Stock or the transactions
contemplated hereby, other than the Transaction Fees and fees payable to J.C.
Bradford & Co. with respect thereto.

                  8L.  COMPLIANCE WITH LAW.

                       (a)   Neither the Company nor any of its Subsidiaries 
has received notice of or citation or summons for, and no complaint has been
filed, no penalty has been assessed and no investigation or review is in
process or, to the best knowledge of the Company, threatened by any
governmental authority with respect to, any violation or alleged violation of
any law, regulation, order or other legal requirement, or failure by the
Company or any of its Subsidiaries to have any permit, certificate, license,
approval, registration or authorization required in connection with the
operation of its business, other than where such violation or failure would not
reasonably be expected to have a material adverse effect on the business,
condition (financial or other), assets, properties, operations or prospects of
the Company. Neither the Company nor any of its Subsidiaries is in default with
respect to any order, writ, judgment, award, injunction or decree of any
federal, state or local court or governmental or regulatory authority or
arbitrator,

                                       19


<PAGE>   24



domestic or foreign, applicable to or in connection with its business or any of
its assets, properties or operations.

                   (b) With respect to the operation of its business, the 
Company and each of its Subsidiaries possesses and is in compliance with all
permits, certificates, licenses, approvals, registrations and authorizations
required under all applicable laws, rules and regulations, all of which are in
full force and effect, and the business has been conducted and is now being
conducted in compliance with all applicable laws, rules, regulations, judgments
and orders of the United States, its states, counties, municipalities and
agencies and of any other jurisdiction, including, without limitation, laws,
rules and regulations relating to pollution and environmental control, equal
employment opportunity, health and safety, the provision of health care
services, insurance and zoning, except for such noncompliance which,
individually or in the aggregate, would not reasonably be expected to have a
material adverse effect on the business, condition (financial or other), assets,
properties, operations or prospects of the Company.

                  8M. INVESTMENT COMPANY ACT.  Neither the Company nor any of 
its Subsidiaries is an "investment company," or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.

                  8N. PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Company
nor any of its Subsidiaries is a "holding company," or a "subsidiary company" of
a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended.

                  8O. GOVERNMENTAL CONSENTS, ETC. No consent, approval
authorization, exemption or other action by, or notice to or filing with, any
court or administrative or governmental body which has not been obtained, taken
or made is required in connection with the execution and delivery of this
Agreement and the Other Agreements or the consummation of the transactions
contemplated hereby or thereby or fulfillment of or compliance with the terms
and provisions hereof.

                  8P. COMPLIANCE WITH ERISA.

                      (a) Prohibited Transactions. Neither the Company nor any 
ERISA Affiliate has engaged in a transaction in connection with which the
Company could be subject to a material liability for either a civil penalty
assessed pursuant to section 502(i) or (1) of ERISA or a tax imposed by section
4975 of the Code.

                      (b) Plan Termination; Material Liabilities. There has been
no termination or partial termination of a Plan or trust, insurance contract or
other funding arrangement maintained or created under any Plan that would give
rise to a material liability to the PBGC on the part of the Company or an ERISA
Affiliate. No material liability to the PBGC has been or is expected to be
incurred with respect to any Plan by the Company or an ERISA

                                       20


<PAGE>   25



Affiliate. The PBGC has not instituted proceedings to terminate any Plan with
respect to which the Company or an ERISA Affiliate has liabilities. There exists
no condition or set of circumstances which presents a material risk of
termination or partial termination of any Plan by the PBGC. The Company and each
ERISA Affiliate have paid all premiums to the PBGC when due.

                  (c) Accumulated Funding Deficiency. Full payment has been made
of all amounts which are required under the terms of each Plan to have been paid
or accrued as contributions to such Plan as of the last day of the most recent
fiscal year of such Plan ended on or before the date of this Agreement (except
such contributions as have not been made but that can be timely made at a later
date without penalty in accordance with sections 412 and 4971 of the Code), and
no accumulated funding deficiency (as defined in section 302 of ERISA and
section 412 of the Code), whether or not waived, exists with respect to any
Plan. Neither the Company nor an ERISA Affiliate has failed to make a required
installment under section 412(m) of the Code.

                  (d) Relationship Of Benefits to Pension Plan Assets. The
current value of the "benefit liabilities" (as defined in section 4001 (a)(16)
of ERISA) of each Plan subject to Title IV of ERISA and section 412 of the Code
does not exceed the fair market value of the assets of such Plan, except, in the
case of Plans established after the date hereof, as permitted by the applicable
funding requirements of Section 412 of the Code. Neither the Company nor any
ERISA Affiliate is required to provide security to any Plan. No Lien under
section 412(n) of the Code or sections 302(f) or 4068 of ERISA has been or is
reasonably expected by the Company to be imposed on the assets of the Company or
any ERISA Affiliate.

                  (e) Compliance with ERISA. All Plans which are intended to be
"qualified" have been determined by the Internal Revenue Service to be
"qualified" under section 401 (a) of the Code. All Plans and Welfare Plans
contributed to or maintained by the Company or an ERISA Affiliate have been
administered substantially in compliance with ERISA and the applicable
provisions of the Code. There are no pending issues before the Internal Revenue
Service or any court of competent jurisdiction related to the qualification of,
or payment of benefits under, any Plan or Welfare Plan.

                  (f) Execution of Agreements; Purchase and Sale of Preferred
Stock, etc. The execution and delivery of this Agreement, the issue and sale of
the Preferred Stock and the consummation of the transactions contemplated by
this Agreement and the Other Agreements will not involve any transaction which
is subject to the prohibitions of section 406 of ERISA or in connection with
which a tax could be imposed pursuant to section 4975 of the Code. The
representation by the Company in the preceding sentence is made in reliance upon
and subject to the accuracy of the Purchasers' representations in paragraph 9 as
to the source of funds used to pay the purchase price of the Preferred Stock.


                                       21


<PAGE>   26



                  8Q. MATERIAL AGREEMENTS. This Agreement, the Other Agreements
and the existing Debt facilities and the agreements contemplated hereby and
thereby and the agreements set forth on SCHEDULES 8Q and 8T comprise all
material agreements, contracts and other arrangements (collectively,
"Contracts") to which the Company is a party, other than agreements executed in
connection with physician practice acquisitions, surgery center acquisition and
development transactions and the operations thereof, including, without
limitation, contracts or other agreements for the employment or compensation of
any officer, director, stockholder, consultant or key employee of the Company,
joint venture agreements, or similar arrangements, contracts or other agreements
of the Company. No party to any Contracts has given the Company written notice
of or made a claim with respect to any breach or default under any such Contract
the consequences of which, individually or in the aggregate, would reasonably be
expected to have a material adverse effect on the business, condition (financial
or other), assets, properties, operations or prospects of the Company. Each of
the Contracts is valid, binding and enforceable to the best of the Company's
knowledge against the other parties thereto, in accordance with its terms and is
in full force and effect. Each of the Company, and, to the best of the Company's
knowledge, each of the other parties thereto, has performed all material
obligations required to be performed by it to date under, and is not in default
in respect of, any of the Contracts and, to the best of the Company's knowledge,
no event exists which, with notice or lapse of time, or both, would constitute
such a default, other than where failure to perform such obligations or such
default would not reasonably be expected to have a material adverse effect on
the business, condition (financial or other), assets, properties, operations or
prospects of the Company.

                  8R. ENVIRONMENTAL MATTERS.

                      (a) To the best of the Company's knowledge, none of the 
real property owned or leased by the Company or any of its Subsidiaries (the
"Real Property") contains or has previously contained any hazardous or toxic
wastes or substances or underground storage tanks.

                      (b) To the best of the Company's knowledge, the Real 
Property is in compliance with all applicable federal, state and local
environmental standards and requirements affecting such Real Property and, to
the best of the Company's knowledge, there are no environmental conditions which
could interfere with the continued use of the Real Property.

                       (c) Neither the Company nor any of its Subsidiaries has
received any notice of violation or advisory action from any regulatory agency
regarding environmental laws or regulations or permit regulations.

                       (d) To the best of the Company's knowledge, neither the
Company nor any of its Subsidiaries has transferred hazardous waste from any of
the Real Property to any other location which is not in compliance with all
applicable environmental laws and regulations and permit regulations.


                                       22


<PAGE>   27



                       (e) With respect to the Real Property, there are no
proceedings, governmental administrative actions or judicial proceedings pending
or, to the best knowledge of the Company, threatened under any federal, state,
or local law regulating the discharge of hazardous or toxic materials or
substances into the environment, in which the Company or any of its Subsidiaries
is named as a party.

                  8S. FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT. As of the
date hereof and as of the Closing Date, the Company is not a "United States real
property holding corporation," as defined in section 897 of the Code and in
applicable regulations thereunder.

                  8T. LEASES. SCHEDULE 8T sets forth a list of all material real
and personal properties in which the Company has a leasehold or concession
interest and which are used in connection with its business (each a "Lease" and,
collectively, the "Leases"), other than Leases executed or assumed in connection
with physician practice acquisitions, surgery center acquisition and development
transactions and the operations thereof, including, without limitation, all
material leases of equipment, machinery, furniture, vehicles and tangible
personal property. No party to any Lease has given the Company written notice of
or made a claim with respect to any breach or default under any such Lease the
consequences of which, individually or in the aggregate, would reasonably be
expected to have a material adverse effect on the business, condition (financial
or other), assets, properties, operations or prospects of the Company. Each of
the Leases is valid, binding and enforceable to the best of the Company's
knowledge against the other parties thereto, in accordance with its terms and is
in full force and effect. Each of the Company and, to the best of the Company's
knowledge, each of the other parties thereto, has performed all material
obligations required to be performed by it to date under, and is not in default
in respect of, any of the Leases and, to the best of the Company's knowledge, no
event exists which, with notice or lapse of time, or both, would constitute such
a default, other than where failure to perform such obligations or such default
would not reasonably be expected to have a material adverse effect on the
business, condition (financial or other), assets, properties, operations or
prospects of the Company.

                  8U. PROFESSIONAL LIABILITY. Except for lawsuits, claims
(asserted or unassorted), damages and expenses adequately covered by insurance,
there are no liabilities of the Company or any of its Subsidiaries, fixed or
contingent, asserted or, to the best knowledge of the Company, unasserted, with
respect to any professional services liability or any similar claim that relates
to any services performed in connection with the business of the Company or any
of its Subsidiaries prior to the Closing Date, except where such liabilities do
not or would not reasonably be expected to have a material adverse effect on the
business, condition (financial or other), assets, properties, operations or
prospects of the Company.

                  8V. EMPLOYEE MATTERS. There are no open National Labor
Relations Board claims, petitions, proceedings, charges, complaints or notices
with respect to the Company or any of its Subsidiaries, (b) the Company and its
Subsidiaries have no labor negotiations in process with any labor union or other
labor organization, (c) no labor disputes, including, but not limited to,

                                       23


<PAGE>   28



strikes, slowdowns, picketing or work stoppages or other labor difficulty exist
or to the best of the Company's knowledge are threatened, with respect to any
employees of the Company or any of its Subsidiaries, (d) no grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement relating to the employees of the Company or any of its Subsidiaries is
in process, and to the best knowledge of the Company, no claim thereunder
exists, (e) neither the Company nor any of its Subsidiaries is experiencing any
labor disputes, including but not limited to strikes, slowdowns, picketing or
work stoppages with respect to the employees of the Company or any of its
Subsidiaries and (f) no "plant closing" or "mass layoff" has been effectuated by
the Company or any of its Subsidiaries (in each case as defined in the Worker
Adjustment and Retraining Notification Act (29 U.S.C. ss. 2101, et seq.), as
amended). To the best knowledge of the Company, there are no efforts in process
by unions to organize any employees of the Company who are not now represented
by recognized collective bargaining agents.

                  8W. SOLVENCY. As of and at the Closing, upon consummation of
the transactions contemplated by this Agreement and the Other Agreements, each
of the Company and its Subsidiaries:

                  (i) is and will be able to pay its debts as they become due;

                  (ii) owns and will own property whose fair saleable value is
         greater than the amount required to pay its debts (including a
         reasonable estimate of the amount of all contingent liabilities);

                  (iii) has and will have adequate capital to carry on its
         business, and has and will have capital which is not unreasonably small
         for the businesses in which it is engaged or proposes to engage; and

                  (iv) is making no transfer of property and is incurring no
         obligation in connection with the transactions contemplated by this
         Agreement and the Other Agreements with the intent to hinder, delay or
         defraud any of the present or future creditors of such company.

                  8X. PROJECTIONS. The projections set forth in the Offering
Memorandum, reflect the Company's management's good faith estimate that such
projections are reasonable and attainable when taken in the aggregate.

         9. REPRESENTATIONS AND AGREEMENTS OF THE PURCHASERS. Each of the
Purchasers represents, and in making this sale to such Purchaser it is
specifically understood and agreed, that (i) each institutional Purchaser is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization, having the corporate or other power and authority
to execute, deliver and perform this Agreement and the Other Agreements and has
taken all action required by law, the Purchaser's governing documents or
otherwise to authorize such execution, delivery and performance, (ii) the
Purchaser is purchasing the Preferred

                                       24


<PAGE>   29



Stock for the Purchaser's own account, for investment purposes and not with a
view to or for sale in connection with any distribution thereof in violation of
applicable federal and state securities laws, (iii) the Purchaser has received,
or has had access to, all information which it considers necessary or advisable
to enable the Purchaser to make a decision concerning its purchase of the
Preferred Stock, and possesses such knowledge and experience in financial and
business matters that the Purchaser is capable of evaluating the merits and
risks of the Purchaser investment hereunder, and (iv) the source of the funds
used by such Purchaser to purchase the Preferred Stock or otherwise to effect
the transactions contemplated hereunder will not involve any transaction which
is subject to the prohibitions of section 406 of ERISA or in connection with
which a tax could be imposed pursuant to section 4975 of the Code, provided the
Company is neither a "party in interest," as such term is defined in section
3(14) of ERISA, nor a "disqualified person," as such term is defined in section
4975(e)(2) of the Code, with respect to any "employee benefit plan," as such
term is defined in section 3(3) of ERISA, whose assets include such source of
funds for purposes of Department of Labor regulations at 29 CFR 2510.3-101.

                  By accepting any Preferred Stock, each holder of any Preferred
Stock that receives any information with respect to the Company or any
Subsidiary agrees to use each holder's best efforts not to disclose any such
information that should reasonably be expected by the recipient to be
confidential and proprietary to the Company without the prior consent of the
Company (other than to such holder's employees, auditors or counsel, its limited
partners or to another holder of shares of Preferred Stock) provided that any
such holder may disclose any such information (a) as has become generally
available to the public, (b) upon prior notice to the Company (i) as may be
required or appropriate in any report, statement or testimony submitted to any
municipal, state or Federal or other national regulatory body having or claiming
to have jurisdiction over such holder, (ii) as may be required or appropriate in
response to any summons or subpoena or in connection with any litigation, (iii)
in order to comply with any law, order, regulation or ruling applicable to such
holder, or (iv) to the prospective transferee in connection with any
contemplated transfer of any of the Preferred Stock by such holder and provided
further that the foregoing restrictions shall not apply to any information with
respect to the Company or any Subsidiary that such holder of Preferred Stock
acquires, develops or receives from a source other than the Company or a Person
which, to the holder's knowledge, would be in violation of any confidentiality
agreement with the Company by disclosing such information.

         10. DEFINITIONS. For the purpose of this Agreement, the terms defined
in paragraphs 1, 2 and 3 and elsewhere in this Agreement shall have the
respective meanings specified therein, and, except as otherwise indicated, the
following additional terms shall have the meanings specified with respect
thereto below:

         "AFFILIATE" shall mean, with respect to any Person, other than AHC,
directly or indirectly controlling, controlled by or under direct or indirect
common control with, such Person. The term Affiliate shall include, without
limitation, (i) any director or executive officer of such Person or of an
Affiliate of such Person, (ii) any group, acting in concert, of such director,
executive officer

                                       25


<PAGE>   30



or relative (a "group"), (iii) any Person controlled by any such director,
executive officer or group, and (iv) any Person or group which beneficially owns
or holds 10% or more of any class of voting securities or a 10% or greater
equity or profits interest in such Person. The term Affiliate shall not include
the Purchasers and any Transferee that might be deemed to be an Affiliate solely
by reason of its ownership of the Preferred Stock (or any other securities
issued in exchange for any such Preferred Stock) or by reason of its benefiting
from any agreements or covenants of the Company or its Subsidiaries contained in
or contemplated by this Agreement. The term control (including, with correlative
meanings, controlling, controlled by or under common control with) shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities or by contract or otherwise.

         "AHC" means American Healthcorp, Inc.

         "BOARD OF DIRECTORS" shall mean the Board of Directors of the Company.

         "BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a 
day on which commercial banks in Washington, D.C. are required or authorized to
be closed.

         "CAPITAL STOCK" shall mean any and all shares, interests, rights to
purchase, warrants, options, participation or other equivalents of or interests
in (however designated) corporate stock.

         "CHANGE IN BUSINESS" with respect to the Company shall mean any change
in or addition to the primary business of the Company that has not been approved
by the Required Holder(s) such that more than 20% of the Consolidated Net
Earnings of the Company are derived from a business other than the Current
Business.

         "CHANGE IN CONTROL" shall mean the occurrence of any of the following
events: (a) the sale, lease or other disposition of all or substantially all of
the Capital Stock or assets of the Company (other than in an initial public
offering), or a merger or consolidation of the Company with or into another
entity in a transaction in which the shareholders of the Company own less than
50% of the voting securities of the surviving or resulting corporation
immediately after such merger or consolidation; or (b) any liquidation,
dissolution or winding up of the Company.

         "CHP" shall have the meaning specified in the first paragraph hereof.

         "CLOSING" shall have the meaning specified in paragraph three hereof.

         "CLOSING DATE" shall have the meaning specified in paragraph three 
hereof.

         "CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.


                                       26


<PAGE>   31



         "COMMON STOCK" shall have the meaning specified in the recitals to 
this Agreement

         "COMMISSION" shall mean the United States Securities and Exchange
Commission or any governmental body or agency succeeding to the functions
thereof.

         "COMPANY SALE" shall mean (i) the sale or other disposition by the
Company of all or substantially all of the stock or assets of the Company to an
independent third party in an arms-length transaction, including disposition by
merger, share exchange or lease yielding net proceeds to the Company of at least
$25,000,000, or in the event that the Company has completed a Spin Off, such
disposition yielding to the Company and/or its Shareholders net cash proceeds or
freely marketable securities of at least $20,000,000.

         "CONSOLIDATED NET EARNINGS" means consolidated gross revenues of the
Company and its Subsidiaries less all operating and nonoperating expenses of the
Company and its Subsidiaries, including all charges of a proper character
(including current and deferred taxes on income, provision for taxes on income,
provision for taxes on unremitted foreign earnings which are included in gross
revenues, and current additions to reserves), all determined in accordance with
GAAP applied on a basis consistent with prior years, but not including in gross
revenues any gains (net of expenses and taxes applicable thereto) in excess of
losses resulting from the sale, conversion or other disposition of capital
assets (i.e., assets other than current assets) any gains resulting from the
write-up of assets, any gains resulting from an acquisition by the Company or
any of its Subsidiaries at a discount of any Debt of the Company or any of its
Subsidiaries, any equity of the Company or any of its Subsidiaries in the
unremitted earnings of any corporation which is not a Subsidiary of the Company,
any earnings of any Person acquired by the Company or any of its Subsidiaries
through purchase, merger or consolidation or otherwise for any time prior to the
date of acquisition, or any deferred credit representing the excess of equity in
any Subsidiary of the Company at the date of acquisition over the cost of the
investment in such Subsidiary.

         "CONVERTIBLE DESIGNATION" shall have the meaning accorded such term in
paragraph 1.

         "CONVERTIBLE STOCK" shall have the meaning specified in paragraph 1.

         "CONTRACTS" shall have the meaning specified in paragraph 8Q.

         "CONVERTIBLE STOCK" shall have the meaning specified in paragraph 1.

         "CURRENT BUSINESS" shall mean the business of the Company as described 
in the Offering Memorandum.

         "DEBT" means, with respect to any Company, all obligations of the
Company, contingent or otherwise, which in accordance with GAAP would be
classified on a balance sheet of the Company as liabilities of the Company, but
in any event including (a) liabilities secured by any

                                       27


<PAGE>   32



mortgage, pledge or lien existing on Property owned by the Company and subject
to such mortgage, pledge or lien, whether or not the liability secured thereby
shall have been assumed by the Company, (b) all indebtedness and other similar
monetary obligations of the Company, (c) all guaranties, obligations in respect
of letters of credit, endorsements (other than endorsements of negotiable
instruments for purposes of collection in the ordinary course of business),
obligations to purchase goods or services for the purpose of supplying funds for
the purchase of payment of Debt of others and other contingent obligations in
respect of, or to purchase, or otherwise acquire, or advance funds for the
purchase of, Debt of others, (d) all obligations of the Company to indemnify
another Company to the extent of the amount of indemnity, if any, which would be
payable by the Company at the time of determination of Debt and (e) all
obligations of the Company under capital leases.

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.

         "ERISA AFFILIATE" shall mean each trade or business (whether or not
incorporated) which together with the Company is treated as a "single employer"
under sections (b), (c), (m), (n) or (o) of section 414 of the Code; provided
that in no event shall Electra or any of its Affiliates be deemed to be an ERISA
Affiliate for purposes of this Agreement.

         "EVENT OF DEFAULT" shall mean any of the events specified in paragraph
7, provided that there has been satisfied any requirement in connection with
such event for the giving of notice, or the lapse of time, or the happening of
any further condition, event or act, and "Default" shall mean any of such
events, whether or not any such requirement has been satisfied.

         "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as 
amended.

         "EXPENSES" shall have the meaning specified in paragraph 12B hereof.

         "GAAP" shall mean generally accepted accounting principles as set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board, or statements by
such other entity as have been approved by a significant segment of the
accounting profession, which are in effect from time to time.

         "INACTIVE COMPANIES" shall mean all corporations, partnerships, joint
ventures or other entities in which the Company owns at least 5% of the
outstanding interests and that do not conduct any business or own any material
assets.

         "LEASE" shall have the meaning specified in paragraph 8T.

         "LIEN" shall mean any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any agreement to give any of the
foregoing, any conditional sale or other

                                       28


<PAGE>   33



title retention agreement, any lease in the nature thereof and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction).

         "MULTIEMPLOYER PLAN" shall mean "multiemployer plan" (as such term is
defined in section 3(37) of ERISA and section 414(f) of the Code) to which
contributions are or have been made by the Company or any of its Subsidiaries.

         "OFFERING MEMORANDUM" means the Confidential Offering Memorandum 
described in paragraph 4K.

         "OFFICERS' CERTIFICATE" shall mean a certificate signed in the name of
the Company by its Chief Executive Officer, President or its Vice Presidents and
by its Chief Financial Officer, Treasurer or Controller.

         "OTHER AGREEMENTS" shall mean, collectively, the Preferred Stock, the
Shareholders' Agreement and the Registration Agreement dated as of April 2, 1992
between the Company and the Investors named therein.

         "PBGC " shall mean the Pension Benefit Guaranty Corporation or any
corporation or governmental body or agency succeeding to the functions thereof.

         "PERSON" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a government
or any department or agency thereof.

         "PLAN" shall mean an employee pension benefit plan within the meaning
of section 3(2) of ERISA, maintained or contributed to by the Company or an
ERISA Affiliate.

         "PREFERRED STOCK" means the Company's Series A Redeemable Preferred
Stock and Series B Convertible Preferred Stock sold to Purchasers pursuant to
this Agreement.

         "PURCHASERS" shall have the meaning specified in the first paragraph 
hereof.

         "QUALIFIED INITIAL PUBLIC OFFERING" mean (i) an initial public offering
of Common Stock of the Company yielding net cash proceeds to the Company of at
least $25,000,000 or (ii) in the event that the Company has completed a Spin
Off; a public offering of Common Stock of the Company yielding net cash proceeds
to the Company and/or its Shareholders of at least $20,000,000.

         "REAL PROPERTY" shall have the meaning specified in paragraph 8R.

         "REDEEMABLE DESIGNATION" shall have the meaning accorded to it in
paragraph 1.

                                       29


<PAGE>   34



         "REDEEMABLE STOCK" shall have the meaning specified in paragraph l.

         "REQUIRED HOLDER(S)" shall mean (i) Electra for so long as it holds at
least 50% of the shares of the Redeemable Stock, the Convertible Stock or Common
Stock of the Company received on conversion thereof (on a fully-diluted and
as-converted basis) held by it upon the Closing hereunder, and (ii) CHP for so
long as it holds at least 50% of the shares of the Redeemable Stock, the
Convertible Stock or Common Stock of the Company received on conversion thereof
(on a fully-diluted and as-converted basis) held by it upon the Closing
hereunder.

         "RESPONSIBLE OFFICER" shall mean, with respect to the Company, its
Chairman of the Board, Chief Executive Officer, President, Chief Operating
Officer, Chief Financial Officer, Treasurer, Secretary, and any Vice President.

         "PREFERRED STOCK" shall have the meaning specified in paragraph 1.

         "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.

         "SENIOR DEBT" shall mean existing senior indebtedness and any
extension, refunding or replacement thereof from time to time with the same or
different lenders subject to the restrictions of Section 6A.

         "SHAREHOLDERS' AGREEMENT" shall have the meaning specified in 
paragraph 4C.

         "SPIN OFF" means the recapitalization of all of the issued and
outstanding Common Stock in a transaction intended to qualify as a tax-free
reorganization under Section 368(a)(i)(E) of the Internal Revenue Code of 1986,
as amended, and the distribution of all shares of Common Stock held by AHC pro
rata among the shareholders of AHC in a tax-free distribution under Section 355
of the Code.

         "STOCK OPTION PLAN" means the Company's 1992 Stock Option Plan, as it
may be amended from time to time and any other similar share incentive plans
which the Company may adopt and any options granted to members of the Board of
Directors and Medical Directors of the Company.

         "SUBSIDIARY" means any corporation or other entity of which more than
fifty percent (50%) of the issued and outstanding voting power is owned or
controlled at the time as of which any determination is being made directly or
indirectly, by the Company or one or more of the Company's Subsidiaries.

         "SUBSTANTIAL PART" shall mean, as of any date, assets (i) having a net
book value equal to or in excess of 20% of the consolidated assets of the
Company and its Subsidiaries (determined

                                       30


<PAGE>   35



in accordance with GAAP) or (ii) which have provided 20% or more of Consolidated
Net Earnings in the most recent fiscal year of the Company.

         "SUNTRUST" means Suntrust Bank, Nashville, NA.

         "SUNTRUST AGREEMENT" means that certain Amended and Restated Loan
Agreement between the Company and Suntrust, dated as of June 25, 1996, as
amended from time to time.

         "TRANSACTION FEE" shall have the meaning specified in paragraph 3 
hereof.

         "TRANSFEREE" shall mean any direct or indirect transferee of all or any
part of any Preferred Stock issued under this Agreement.

         "TRIGGERING EVENT" shall mean the occurrence of either

                  (a)      a Company Sale or

                  (b)      a Qualified Initial Public Offering.

         "WELFARE PLAN" shall mean an employee welfare benefit plan within the
meaning of section 3(1) of ERISA, maintained or contributed to by the Company or
an ERISA Affiliate.

          11. INDEMNIFICATION.

              11A. INDEMNIFICATION BY COMPANY. The Company agrees to indemnify,
defend, and hold the Purchasers harmless from and against all claims,
demands, losses, liabilities or judgments including, without limitation, all
interest, penalties, fines and other sanctions, and any reasonable costs or
expenses in connection therewith, including, without limitation, attorneys' fees
and expenses, arising out of or in connection with (i) the breach or failure by
the Company or its Subsidiaries to observe, pay or perform any of its or their
respective warranties, representations, covenants or agreements set forth herein
and (ii) any violation by the Company or its Subsidiaries of any applicable
statute, law or regulation relating to the environment or occupational health or
safety, or any material expenditures required to comply therewith.

              11B. INDEMNIFICATION BY PURCHASERS. The Purchasers hereby
agree to indemnify, defend, and hold the Company harmless from and against all
claims, demands, losses, liabilities or judgments, including, without
limitation, all interest, penalties, fines and other sanctions, and any
reasonable costs or expenses in connection therewith, including, without
limitation, attorneys' fees and expenses, arising out of or in connection with
the breach or failure by the Purchasers to observe, pay or perform any of the
warranties, representations, covenants or agreements set forth herein.


                                       31


<PAGE>   36



              11C. PROCEDURES UNDER INDEMNIFICATION. In the event that any
legal proceedings shall be instituted or that any claim or demand shall be
asserted by any person in respect of which payment may be sought by either party
from the other party under the provisions of this paragraph 11, the party
seeking indemnification (the "Indemnitee") shall promptly cause written notice
of the assertion of any claim of which it has knowledge and which is covered by
this paragraph 11 to be forwarded to the party from which indemnification is
sought (the "Indemnitor"); provided, however, that failure to give notice shall
not relieve the Indemnitor of its indemnity obligation, except to the extent the
Indemnitor is actually prejudiced in its defense of the action as a result of
such failure. The Indemnitor shall have the right, at its option and at its
expense, to be represented by counsel of its choice and to participate in, or to
take exclusive control of, the defense, negotiation and/or settlement of any
proceeding, claim or demand which relates to any losses or potential losses
indemnified against hereunder provided that (i) the Indemnitor acknowledges in
writing its obligation to fully indemnify the Indemnitee pursuant to paragraph
11A or 11B, as applicable, with respect to such claim or demand and (ii) such
claim or demand involved seeks (and continues to seek) solely monetary damages,
and provided, further, that the Indemnitee may participate in any such
proceeding with counsel of its choice and at its own expense. To the extent that
the Indemnitor elects not to defend or settle, or fails to adequately defend or
prosecute, such proceeding, claim or demand, the Indemnitee may in accordance
with its good faith business judgment elect reasonably to defend against, settle
or otherwise deal with any such proceeding, claim or demand. Any settlement
shall be made only with the consent of the Indemnitee (which consent shall not
be unreasonably withheld or delayed, and shall be deemed given by the Indemnitee
unless the Indemnitee shall notify the Indemnitor of its objection to such
settlement and the reasons for such objection by notice given within ten (10)
days after such consent shall be requested by the Indemnitor). Indemnitor shall
not, without the prior written consent of the Indemnitee, enter into any
compromise or settlement which commits the Indemnitee to take, or to forbear
from taking, any action. The parties agree to cooperate fully with each other in
connection with the defense, negotiation or settlement of any such legal
proceeding, claim or demand, provided that Indemnitor shall reimburse Indemnitee
for all reasonable out-of-pocket expenses in connection therewith. After any
final judgment or award shall have been rendered by a court, arbitration board
or administrative agency of competent jurisdiction and the time in which to
appeal such final judgment or award shall have expired, or a settlement shall
have been consummated, or the Indemnitee and the Indemnitor shall have arrived
at a mutually binding agreement with respect to each separate matter indemnified
by the Indemnitor, the Indemnitee shall forward to the Indemnitor notice of any
sums due and owing by the Indemnitor with respect to such matter and the
Indemnitor shall be required to pay all of such sums owing by reason of such
judgment, award or settlement to the Indemnitee by wire transfer in immediately
available funds within thirty (30) days after the date of such notice. If
defendants in any action include both the Indemnitor and the Indemnitee, and (a)
the Indemnitee shall have been advised by its counsel that there may be legal
defenses available to the Indemnitee which are different from or additional to
those available to the Indemnitor or (b) if there are any conflicts of interest
between the Indemnitor and the Indemnitee with respect to such action, the
Indemnitee shall have the right to employ its own counsel in such action, and in
such event, the fees and

                                       32


<PAGE>   37



expenses of such counsel shall be borne by the Indemnitor and shall be advanced
by the Indemnitor to the Indemnitee as they are incurred.

         12. MISCELLANEOUS.

             12A. PAYMENTS. The Company agrees that, so long as the Purchasers
shall hold any Preferred Stock it will make payments, if any, with respect to
the Preferred Stock, in compliance with the terms of this Agreement, by wire
transfer of immediately available funds for credit to: (i) in the case of
Electra, NatWest Bank N.A., New York, New York, ABA No. 021 200339 for the
account of Electra Investment Trust, P.L.C., account number 2753 10 3670, (ii)
in the case of CHP, NationsBank, N.A., Washington, D.C., ABA No. 054001204 for
the checking account of Capitol Health Partners, L.P., account number
1933056188, (iii) in the case of Michael E. Stephens, Am South Bank, ABA No.
062000019, For Further Credit To Michael E. Stephens, Account No. 12781304 or
(iv) to such other account or accounts as the Purchasers or any other holder of
the Preferred Stock may designate in writing, notwithstanding any contrary
provision herein with respect to the place of payment. The Company agrees to
afford the benefits of this paragraph 12A to any Transferee which shall have
made the same agreement as the Purchasers have made in this paragraph 12A.

             12B. EXPENSES AND FEES. The Company agrees, provided the
transactions hereby contemplated shall be consummated, to pay, and save the
Purchasers and their Affiliates harmless against liability for the payment of,
all reasonable out-of-pocket expenses of the Purchasers arising in connection
with this Agreement, the Preferred Stock, the Other Agreements and the
transactions contemplated hereunder and thereunder, including, without
limitation, the following expenses incurred by Electra and/or CHP (the "Electra
Expenses" and the "CHP Expenses", respectively): (i) all document production and
duplication charges, (ii) all fees and expenses of Electra and CHP's counsel,
accounting firm and other advisers engaged by such Purchasers or any of their
Affiliates in connection with this Agreement and the Other Agreements and the
transactions contemplated hereunder and thereunder, (iii) all expenses,
including attorneys' fees and expenses, incurred by Electra or CHP or any of
their Affiliates or Transferees with respect to the enforcement of any rights or
provisions of any such agreement or instrument, or in responding to any subpoena
or other legal process issued in connection with such agreements and instruments
or the transactions contemplated hereunder or thereunder, or in connection with
any subsequent proposed modification of, or proposed consent under, this
Agreement or the Other Agreements, whether or not such proposed modification
shall be effected or proposed consent granted, and (iv) all expenses incurred in
connection with the printing of such agreements and instruments which may be
payable in respect of the execution and delivery of such agreements or
instruments, or the issuance, delivery or purchase by the Purchasers of any
shares of Preferred Stock.

             12C.  CONSENT TO AMENDMENT; WAIVERS. This Agreement may be amended
and the Company may take any action herein prohibited, or omit to perform any
act or covenant herein required to be performed by it, only if the Company shall
have obtained the written consent to such amendment, action or omission to act,
of the Required Holder(s), and each holder of any

                                       33


<PAGE>   38



shares of Preferred Stock at the time or thereafter outstanding shall be bound
by any consent authorized by this paragraph 12C, whether or not the shares of
Preferred Stock shall have been marked to indicate such consent, but any shares
of Preferred Stock issued thereafter may bear a notation referring to any such
consent; provided that without the written consent of the holder or holders of
all the Preferred Stock at the time outstanding, no consent, amendment or waiver
to or under this Agreement shall affect the exchange, conversion or put rights
of the Preferred Stock, or reduce the proportion of the amount of shares of
Preferred Stock required with respect to any consent, amendment or waiver of, or
contemplated by, this Agreement or alter the rights or obligations of any holder
of Preferred Stock without so altering the rights or obligations of all holders
of Preferred Stock. No course of dealing between the Company and a holder of
Preferred Stock nor any delay in exercising any rights hereunder or under the
Preferred Stock shall operate as a waiver of any rights of any holder of
Preferred Stock. As used herein, the term "this Agreement" and references
thereto shall mean this Agreement as it may from time to time be amended or
supplemented.

         12D. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All
representations and warranties contained herein or made in writing by or on
behalf of the Company in connection herewith shall survive the execution and
delivery of this Agreement, the Other Agreements and the Preferred Stock, the
transfer by the Purchasers of any shares of Preferred Stock or portion thereof
or interest therein, and may be relied upon by any Transferee regardless of any
investigation made at any time by or on behalf of any Purchaser or any
Transferee. Subject to the preceding sentence, this Agreement, the Other
Agreements and the Preferred Stock embody the entire agreement and understanding
among the Purchasers and the Company and supersede all prior agreements and
understandings relating to the subject matter hereof.

         12E. SUCCESSORS AND ASSIGNS. All covenants and other agreements in this
Agreement contained by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and assigns of the parties
hereto (including, without limitation, any Transferee) whether so expressed or
not.

         12F. NOTICES. All written communications provided for hereunder shall
be sent by first-class mail or nationwide overnight delivery service (with
charges prepaid) or via receipted facsimile transmission and shall be directed
to the holder at the holder's last requested address or facsimile number:

                  If to Electra:
                          
                           Electra Investment Trust, P.L.C.
                           65 Kingsway
                           London, England WC2B 6QT
                           Attention: Philip J. Dyke, Company Secretary
                           Telecopy No.: 011-44-71-404-5388


                                       34


<PAGE>   39



                  with copies to:

                           Electra, Inc.
                           70 East 55th Street
                           New York, New York 10022
                           Attention: Scott D. Steele
                           Telecopy No.: (212) 319-3069

                  and

                           Willkie Farr & Gallagher
                           One Citicorp Center
                           153 East 53rd Street
                           New York, New York 10022
                           Attention: Peter J. Hanlon, Esq.
                           Telecopy No.: (212) 821-8111

                  If to CHP:

                           Capitol Health Partners, L.P.
                           3000 P Street, N.W.
                           Washington, D.C. 20005
                           Attention: Debora A. Guthrie
                           Telecopy No.: (202) 965-2344

                  with copies to:

                           Manatt, Phelps & Phillips, LLP
                           1501 M Street N.W.
                           Washington, D.C. 20009
                           Attention: Joseph F. Kelly, Jr.
                           Telecopy No.: (202) 463-4394

                  If to Michael E. Stephens:

                           One Perimeter Park South
                           Suite 100N
                           Birmingham, AL 35243
                           Telecopy No.: (205) 970-6524


                                       35


<PAGE>   40



         with copies to:

                           Bradley, Arant Rose & White
                           2001 Park Place
                           Suite 1400
                           Birmingham, AL 35203
                           Attention: Thomas Carruthers
                           Telecopy No.: 205/252-0264

         If to any other holder of any shares of Preferred Stock addressed to
such holder at such address as such other holder shall have specified to the
Company in writing or, if any such other holder shall not have so specified an
address to the Company, then addressed to such other holder in care of the last
holder of such shares of Preferred Stock which shall have so specified an
address. Each party may, by notice given hereunder, designate any further or
different addresses to which subsequent notices, certificates or other
communications shall be sent.

                  If to the Corporation:

                           AmSurg Corp.
                           One Burton Hills Boulevard
                           Suite 350
                           Nashville, TN 37215
                           Attention: Claire M. Gulmi
                           Telecopy No. (615) 665-0755

                  with copies to:

                           Bass, Berry & Sims PLC
                           2700 First American Center
                           Nashville, TN 37238
                           Attention: Cynthia Y. Reisz
                           Telecopy No.: (615) 742-6293

         12G. DESCRIPTIVE HEADINGS, ETC. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement. References herein to a paragraph are,
unless otherwise specified, to one of the paragraphs of this Agreement and
references to an "Exhibit" are, unless otherwise specified, to one of the
Exhibits to this Agreement.

         12H. GOVERNING LAW; RESOLUTION OF DISPUTES. This Agreement shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the law of the State of New York without regard to the conflicts
of laws provisions thereof. The Company and the Purchasers shall not seek a jury
trial in any action based upon or arising out of

                                       36


<PAGE>   41



this Agreement or any related document or agreement. The Company will not seek
to consolidate any such action with any other action in which trial by jury has
not been waived.

         12I. COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, and it shall
not be necessary in making proof of this Agreement to produce or account for
more than one such counterpart.

     IN WITNESS WHEREOF, the Company and the Purchasers have executed this
Agreement as of the date first above written.


                              AMSURG CORP.                        
                                                                  
                              By:
                                 ---------------------------------
                                       Title                      
                                                                  
                              ELECTRA INVESTMENT TRUST, P.L.C.    
                                                                  
                              By:                              
                                 ---------------------------------   
                                       Title                      
                                                                  
                                                                  
                              CAPITOL HEALTH PARTNERS, L.P.       
                                                                  
                              By: CAPITOL HEALTH ADVISORS, L.P.   
                              Its General Partner                 
                                                                  
                              By: CAPITOL HEALTH, INC.            
                              Its General Partner                 
                                                                  
                              By:   
                                  --------------------------------
                                       Debora A. Guthrie          
                                       President                  
                                                                  
                               -----------------------------------
                                       Michael E. Stephens        
                                                                  
                              

                                       37


<PAGE>   42


                                LIST OF EXHIBITS

<TABLE>

<S>               <C>
Exhibit A         Series A Convertible Preferred Stock
Exhibit B         Series B Convertible Preferred Stock
Exhibit C         Articles of Amendment
Exhibit D         Bass, Berry & Sims, PLC Opinion
Exhibit E         Shareholders' Agreement
Exhibit F         Registration Agreement
Exhibit G         Suntrust's Amended and Restated Loan Agreement
Exhibit H         Consent of Suntrust
Exhibit I         Prospectus

                                LIST OF SCHEDULES

Schedule 4L       Structure and Capital Stock
Schedule 6D       Transactions with Affiliates
Schedule 6H       Restrictions on Payment/Debts
Schedule 8A       Subsidiaries
Schedule 8B       Business
Schedule 8C       Capital Stock and Related Matters
Schedule 8I       Patents, Trademarks, etc.
Schedule 8Q       Material Agreements
Schedule 8T       Leases
</TABLE>









                                       38