MANAGEMENT AND HUMAN RESOURCES AGREEMENT
This MANAGEMENT AND HUMAN RESOURCES AGREEMENT (as amended and
supplemented from time to time, this "Agreement") is made as of November __,
1997, by and between AmSurg Corp., a Tennessee corporation ("AmSurg"), and
American Healthcorp, Inc., a Delaware corporation ("AHC").
WHEREAS, AHC and AmSurg are parties to that certain Amended and
Restated Distribution Agreement, dated as of November 3, 1997 (the
"Distribution Agreement"), pursuant to which, as of the date hereof, AHC has
distributed all of the shares of capital stock of AmSurg owned by AHC to the
stockholders of AHC (the "Distribution");
WHEREAS, AHC is supplying to AmSurg and its Subsidiaries (as defined
herein) certain accounting and financial services pursuant to that certain
January 1, 1997 letter agreement between AHC and AmSurg, as amended (the
"Letter Agreement"); and
WHEREAS, AHC and AmSurg desire that AHC continue to provide the same
types of accounting and financial services to AmSurg and its Subsidiaries on a
transition basis following the Distribution with the intent that AmSurg is to
acquire the personnel, systems and expertise necessary to become
self-sufficient in the provision of these
services during the Transition Period
(as defined herein).
NOW, THEREFORE, in consideration of the mutual promises contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound,
the parties agree that AHC shall provide certain services to AmSurg and its
Subsidiaries pursuant to the following terms and conditions:
1.1 Services During the Transition Period. During the Transition
Period (as defined in Section 1.6), AHC shall provide the following accounting
and financial services with respect to the corporate office operations of
AmSurg (collectively, the "Services"): (a) processing payroll and associated
payroll tax returns and accounts payable for the AmSurg corporate office, (b)
maintaining general accounting records for the AmSurg corporate operations and
the operations of its Subsidiaries, (c) preparing consolidated AmSurg financial
statements, (d) preparing such AmSurg corporate tax returns and the tax returns
of its Subsidiaries as may be required during the Transition Period, (e)
preparing such estimated tax reports for AmSurg and its Subsidiaries as may be
required during the Transition Period, and (f) preparing financial statements
in connection with periodic
reports required to be filed by AmSurg with the Securities and Exchange
Commission. Such Services will be provided in a manner and at a time
consistent with services provided by AHC under the Letter Agreement.
1.2 Services Not Included. The Services described in Section 1.1
do not include (a) additional outside professional services or fees needed to
review the referenced tax returns or consultations with outside accounting and
tax advisors on specific issues and questions or the costs of AmSurg's annual
independent audit, (b) accounting and financial services in connection with any
offering of securities or acquisition on behalf of AmSurg or any of its
Subsidiaries, as provided below, (c) services and costs as a result of changes
and modifications requested by AmSurg, (d) services and costs in connection
with the conversion to new systems implemented by AmSurg, and (e) services and
costs in connection with any audit of AmSurg's tax returns. Any services and
costs referred to in clauses (b), (c), (d) and (e) of this Section 1.2 may be
provided if specifically agreed by AHC and AmSurg in a written agreement
identifying such services and costs and the fees therefor. Any such services
and costs so agreed to are referred to herein as "Additional Services."
1.3 Compensation for Services.
(a) As compensation for the Services, AmSurg shall pay
(i) A fixed fee of $4,166.67 per month during the
Transition Period, and
(ii) A variable fee of $625.00 per month for each
accounting unit identified on Schedule A hereto during the Transition Period.
(b) As compensation for any Additional Services, AmSurg
will pay to AHC the fees agreed to by AHC and AmSurg in the written agreement
referred to in Section 1.2 above relating to such Additional Services.
1.4 Payment. AmSurg shall pay all amounts payable pursuant to
Section 1.3 hereof by check or by wire transfer of immediately available funds
into an account designated by AHC. Each such payment shall be made in arrears
on the fifth day of the calendar month following the provision of the Services
or Additional Services.
1.5 Responsibility for Accuracy and Integrity. It is understood
and agreed, and AmSurg hereby acknowledges, that AmSurg has sole responsibility
for the accuracy and integrity of the financial statements and tax returns
prepared by AHC. AmSurg will provide oversight and review on a timely basis of
the Services and any Additional Services provided by AHC.
1.6 Transition Period. The Services and any Additional Services
will be provided during the period (the "Transition Period") beginning on the
date hereof and ending on the earlier of (a) the end of the twelfth
consecutive month following the date hereof, or (b) the date as of which AmSurg
elects to terminate the Services and any Additional Services by giving notice
to AHC as provided in Section 5.1 hereof.
1.7 Certain Definitions. For purposes of this Agreement, the
following terms shall have the following respective meanings:
(a) "Entity" means any partnership, limited liability
company, corporation, association, business trust, joint venture, governmental
entity, business entity or other entity of any kind or nature.
(b) "Subsidiary" means, with respect to AmSurg, an Entity
identified on Schedule A hereto which, directly or indirectly through one or
more intermediaries is controlled by AmSurg, including but not limited to, any
ambulatory surgery center, physician practice group or operational specialty
network identified on Schedule A hereto managed by AmSurg.
1.8 Termination of Letter Agreement. The Letter Agreement is
hereby terminated as of the date hereof.
1.9 Services to be Provided by AHC; Quality. All Services and any
Additional Services will be performed by employees of AHC, unless otherwise
reasonably agreed to by AHC and AmSurg. The Services and any Additional
Services will be of a level of quality at least consistent with the services
historically provided under the Letter Agreement.
AHC will be responsible for claims incurred on or prior to the date
hereof by AmSurg Employees (as hereinafter defined) under any medical or dental
plans offered by AHC to AmSurg Employees on or prior to the date of this
Agreement in accordance with the terms of such plans. AHC will not be
responsible for any claims incurred following the date of this Agreement by any
AmSurg Employees under any plan. For purposes of this Section 2.1, the term
"AmSurg Employee" means any covered employee or covered former employee of
AmSurg or any of its Subsidiaries and any covered dependent of any such
employee or former employee.
REPRESENTATIONS, WARRANTIES AND COVENANTS
3.1 AHC hereby represents, warrants and covenants to AmSurg and
(a) AHC shall use its reasonable efforts in performing
its obligations under this Agreement.
(b) AHC shall comply with all applicable material
statutes, ordinances, rules, regulations, orders of public authorities or
regulatory agencies and laws of the United States and/or any state thereof
(collectively, "Laws") relating to this Agreement or to the provision of the
Services and any Additional Services.
3.2 AmSurg hereby represents, warrants and covenants to AHC that
AmSurg and its Subsidiaries shall comply with all applicable Laws relating to
this Agreement or to the use of the Services and any Additional Services.
ACCESS TO INFORMATION AND CONFIDENTIALITY; ACCURACY
4.1 Access to AmSurg Information During the Transition Period;
Cooperation. AmSurg will provide AHC and its authorized accountants, counsel
and other designated representatives access to all records, books, contracts,
instruments, computer data and other data and information of AmSurg and its
Subsidiaries required or requested by AHC in the performance of the Services
and any Additional Services during the Transition Period. AmSurg shall, and
shall cause each of its Subsidiaries, officers, employees, agents, consultants
and advisors to cooperate with AHC in connection with the Services and any
Additional Services. AHC shall deliver to AmSurg all records of AmSurg in
AHC's possession as soon as practicable upon the termination of the Transition
4.2 Confidentiality. Each party shall hold, and shall cause its
subsidiaries, officers, employees, agents, consultants and advisors to hold, in
strict confidence, unless compelled to disclose by judicial or administrative
process or, in the opinion of its counsel, by other requirements of law, all
non-public information concerning the other party obtained by such party in
connection with the performances of the Services hereunder (except to the
extent that such information can be shown to have been (a) available to such
party on a non-confidential basis prior to its disclosure by the other party,
(b) in the public domain through no fault of such party or (c) later lawfully
acquired from other sources by the party to which it was furnished), and each
party shall not release or disclose such information to any other person,
except its auditors, attorneys, financial advisors, bankers and other
consultants and advisors who agree to be bound by the provisions of this
Section 4.2. Each party shall be deemed to have satisfied its obligation to
hold confidential information concerning or supplied by the other party if it
exercises the same care as it takes to preserve confidentiality for its own
similar confidential information.
4.3 Accuracy of Information. AHC shall not be responsible for
determining whether any information provided to AHC in connection with the
Services or any Additional Services is accurate or complete or whether there is
any additional information not furnished to AHC which is required for any
financial statements, estimated tax report or tax return prepared by AHC on
AmSurg. In the absence of gross negligence on behalf of AHC, AHC shall not be
responsible for the accuracy, completion or timely filing of any financial
statements, estimated tax report or tax return prepared by AHC. AmSurg will
indemnify and hold AHC, its directors, officers, employees and agents and any
person who controls AHC within the meaning of the Securities Act of 1933, as
amended, and their respective successors and assigns (each of AHC and such
directors, officers, employees, agents and controlling persons, and their
respective successors and assigns, being referred to herein as an "Indemnified
Person") harmless from and against any and all liabilities, claims or damages
incurred by them in connection with any actual or threatened action, claim or
proceeding arising out of or relating to any Services or Additional Services
performed by AHC or any transactions or conduct in connection therewith, in the
absence of gross negligence on the part of AHC.
After receipt by an Indemnified Person of notice of any complaint or
the commencement of any action or proceeding with respect to which
indemnification is being sought hereunder, such person will promptly notify
AmSurg in writing of such complaint or of the commencement of such action or
proceeding, but failure so to notify AmSurg will relieve AmSurg from any
liability which AmSurg may have hereunder only if, and to the extent that, such
failure results in the forfeiture by AmSurg of substantial rights and defenses,
and will not in any event relieve AmSurg from any obligation or liability that
AmSurg may have to any Indemnified Person otherwise than under this Section
4.3. If AmSurg so elects or is requested by an Indemnified Person, AmSurg will
assume the defense of such action or proceeding, including the employment of
counsel reasonably satisfactory to the Indemnified Person and the payment of
the fees and disbursements of such counsel; provided, however, that without
regard to whether AmSurg assumes such defense, AmSurg shall have the right to
participate in any such action or proceeding. In the event, however, that an
Indemnified Person reasonably determines in its judgment that having common
counsel would present such counsel with a conflict of interest or if the
defendants in, or targets of, any such action or proceeding include both an
Indemnified Person and AmSurg, and such Indemnified Person concludes that there
may be legal defenses available to it or other Indemnified Persons that are
different from or in addition to those available to AmSurg, or if AmSurg fails
to assume the defense of the action or proceeding or to employ counsel
reasonably satisfactory to such Indemnified Person, in either case in a timely
manner, then such Indemnified Party may employ separate counsel reasonably
satisfactory to AmSurg to represent or defend it in any such action or
proceeding and AmSurg will pay the reasonable fees and disbursements of such
counsel. In any action or proceeding the defense of which is assumed by
AmSurg, the Indemnified Person will have the right to participate in such
litigation and retain its own separate counsel at its own expense. AmSurg will
not be liable to any Indemnified Person under this Section 4.3 for the cost of
any settlement, compromise or consent to the entry of any judgment in any
action or proceeding unless AmSurg has consented in writing to such settlement,
compromise or consent, which consent will not be unreasonably withheld or
delayed. AmSurg agrees that it will not, without the prior written consent of
AHC and any Indemnified Person (which consent shall not be unreasonably
withheld or delayed), settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution under this Section 4.3 may be
sought and to which AHC or any other Indemnified Person is an actual party to
such claim, action, suit or proceeding or in connection with which any
publicly available statement is made which names or refers to AHC or any
Indemnified Person, unless such settlement, compromise or consent includes an
unconditional release of AHC and each other Indemnified Person hereunder from
all liability arising out of such claim, action, suit or proceeding.
AmSurg agrees that if any indemnification sought by an Indemnified
Person pursuant to this Section 4.3 is held to be unavailable for any reason
other than the gross negligence of AHC, then AmSurg and AHC will contribute to
the liabilities, claims or damages for which such indemnification is held
unavailable; provided, however, that no person guilty of fraudulent
misrepresentation shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. In determining the amount of
contribution to which the respective parties are entitled, there shall be taken
into account the relative benefits of this Agreement to AHC as compared to the
benefits to AmSurg of this Agreement and the transactions giving rise to such
liabilities, claims or damages, the parties' relative knowledge and access to
information concerning the matter with respect to which the claim was asserted,
the opportunity to correct and prevent any statement or omission, and any other
equitable considerations appropriate under the circumstances. AmSurg and AHC
agree that it would not be just and equitable if the amount of such
contribution were determined by pro rata or per capita allocation. Neither AHC
nor any Indemnified Person shall be obligated to make contribution hereunder
which in the aggregate exceeds the fees received by AHC under this Agreement,
less the aggregate amount of any damages which AHC and the Indemnified Persons
have otherwise been required to pay in respect of the same or any similar
AmSurg will promptly reimburse AHC and any other Indemnified Person
for all expenses (including reasonable fees and disbursements of counsel) as
they are incurred by AHC or such other Indemnified Person in connection with
investigating, preparing for or defending, or providing evidence in, any
pending or threatened action, claim, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not AHC or
any other Indemnified Person is a party) and in enforcing this Agreement.
MISCELLANEOUS AND GENERAL
5.1 Termination; Modification or Amendment. The Transition
Period may be terminated at any time by AmSurg by giving thirty days' prior
written notice to AHC. It is contemplated that (a) as AmSurg becomes
self-sufficient during the Transition Period certain of the Services may no
longer be required and that appropriate adjustments in the list of Services and
the fees therefor will be made by written agreement between AHC and AmSurg, and
(b) Schedule A may be modified from time to time by written agreement between
AHC and AmSurg. The obligations of the parties under Sections 4.2, 4.3 and 5.8
hereof shall survive the Transition Period or any termination of the Transition
Period or this Agreement. The parties hereto may modify or amend this
Agreement by written agreement executed and delivered by authorized officers of
the respective parties.
5.2 Counterparts. For the convenience of the parties hereto,
this Agreement may be executed in any number of separate counterparts, each
such counterpart being deemed to be an original instrument, and all such
counterparts shall together constitute the same agreement.
5.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
transactions occurring solely within the State of Delaware.
5.4 Notices. Any notice, request, instruction or other document
to be given hereunder by any party to the other shall be in writing and shall
be deemed to have been duly given (i) on the date of delivery if delivered by
facsimile (upon confirmation of receipt) or personally, (ii) on the first
business day following the date of dispatch if delivered by Federal Express or
other next-day courier service, or (iii) on the third business day following
the date of mailing if delivered by registered or certified mail, return
receipt requested, postage prepaid. All notices hereunder shall be delivered
as set forth below, or pursuant to such other instructions as may be designated
in writing by the party to receive such notice:
(a) If to AHC:
American Healthcorp, Inc.
One Burton Hills Boulevard
Nashville, Tennessee 37215
Attention: Thomas G. Cigarran
with a copy to:
James H. Cheek III
Bass, Berry & Sims PLC
2700 First American Center
Nashville, TN 37238
(b) If to AmSurg:
One Burton Hills Boulevard
Nashville, Tennessee 37215
Attention: Ken P. McDonald
with a copy to:
Byron R. Trauger
Doramus, Trauger & Ney
222 Fourth Avenue North
Nashville, Tennessee 37219
5.5 Captions. All section captions herein are for convenience of
reference only, do not constitute part of this Agreement and shall not be
deemed to limit or otherwise affect any of the provisions hereof.
5.6 Assignment. This Agreement and all the provisions hereof
shall be binding upon and inure to the benefit of the parties and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by either
party without the prior written consent of the other party and any such
assignment of obligation shall not relieve the assigning party from its
responsibility hereunder. Except as provided in Section 4.3 or otherwise
expressly provided herein, nothing contained in this Agreement or the
agreements referred to herein is intended to confer on any person or entity
other than the parties hereto and their respective successors and permitted
assigns any benefit, rights or remedies under or by reason of this Agreement
and such other agreements.
5.7 Further Assurances. AHC and AmSurg will do such additional
things as are necessary or proper to carry out and effectuate the intent of
this Agreement or any part hereof or the transactions contemplated hereby.
5.8 Dispute Resolution.
(a) Submission of Disputes to Arbitration. Any claims,
demands, disputes, differences, controversies, and/or misunderstandings arising
under, out of, or in connection with, or in relation to this Agreement
(collectively, a "Dispute"), shall be settled by submission of such Dispute
(if not theretofore resolved by the parties hereto) within 45 days of assertion
to arbitration in accordance with the provisions of this Section 5.8 and the
Commercial Arbitration Rules of the American Arbitration Association.
(b) Selection of Arbitrators.
(i) The parties may agree upon one arbitrator
whose decision will be final and binding on them; otherwise there shall be
three arbitrators, with one named in writing by each party and the third chosen
by these two arbitrators (without necessary delay), and the decision in writing
signed by those assenting thereto of any two of the arbitrators shall be final
and binding on the parties.
(ii) No one shall be nominated or act as an
arbitrator who is in any way financially interested in this Agreement or in the
business of either party hereto.
(c) Consent to Jurisdiction. Any and all arbitrations
shall take place pursuant to the laws of the State of Delaware, and consent is
hereby given to jurisdiction of courts of the State of Delaware over the
parties to this Agreement in reference to any matter arising out of arbitration
or this Agreement, including but not limited to confirmation of any award and
enforcement thereof by entry of judgment thereon or by any other legal remedy.
(d) Costs of Arbitration. The cost of any arbitration
(including the fees of the arbitrator or arbitrators) pursuant to this
Agreement shall be borne equally by each party to the Dispute, unless otherwise
determined by the arbitrator or arbitrators.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed and become effective as of the day and year first written above.
AMERICAN HEALTHCORP, INC.
Subsidiaries and Accounting Units
Facility/Subsidiary Name: Number of Accounting Units*:
*Each AmSurg corporate location will be assigned two accounting units. Each
practice-based ambulatory surgery center will be assigned one accounting unit.
Each managed physician practice group will be assigned two accounting units.
The number of accounting units to be assigned to operational specialty networks
is to be determined by good faith negotiation between AHC and AmSurg.