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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0000950170-01-000468.txt : 20010409
<SEC-HEADER>0000950170-01-000468.hdr.sgml : 20010409
ACCESSION NUMBER:		0000950170-01-000468
CONFORMED SUBMISSION TYPE:	10-K
PUBLIC DOCUMENT COUNT:		7
CONFORMED PERIOD OF REPORT:	20001231
FILED AS OF DATE:		20010402

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			AMERIPATH INC
		CENTRAL INDEX KEY:			0001027532
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-MEDICAL LABORATORIES [8071]
		IRS NUMBER:				650642485
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-K
		SEC ACT:		
		SEC FILE NUMBER:	000-22313
		FILM NUMBER:		1592344

	BUSINESS ADDRESS:	
		STREET 1:		7289 GARDEN RD
		STREET 2:		SUITE 200
		CITY:			RIVER BEACH
		STATE:			FL
		ZIP:			33404
		BUSINESS PHONE:		5618451850

	MAIL ADDRESS:	
		STREET 1:		7289 GARDEN RD
		STREET 2:		SUITE 200
		CITY:			RIVER BEACH
		STATE:			FL
		ZIP:			33404
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>0001.txt
<DESCRIPTION>FORM 10-K
<TEXT>


                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                   FORM 10-K

[X]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
       ACT OF 1934

                     FOR THE YEAR ENDED DECEMBER 31, 2000

                                      OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

         FOR THE TRANSITION PERIOD FROM ____________ TO ____________.

                                AMERIPATH, INC.
            (Exact Name of Registrant as Specified in Its Charter)

                Delaware                                     65-0642485
       (State or Other Jurisdiction                      (I.R.S. Employer
      Incorporation or Organization)                    Identification No.)

           7289 Garden Road, Suite 200, Riviera Beach, Florida 33404
                   (Address of Principal Executive Offices)

      Registrant's Telephone Number, Including Area Code: (561) 845-1850

      Securities Registered Pursuant to Section 12(B) of the Act:

      Securities Registered Pursuant to Section 12(G) of the Act:

                    Common Stock (Par Value $.01 Per Share)
                               (Title of Class)

      Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

      Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

      The aggregate market value of voting stock held by non-affiliates of the
Registrant as of March 16, 2001 was approximately $430.4 million based on the
$17.44 closing sale price for the Common Stock on the NASDAQ National Market
System on such date. For purposes of this computation, all executive officers
and directors of the Registrant have been deemed to be affiliates. Such
determination should not be deemed to be an admission that such directors and
officers are, in fact, affiliates of the Registrant.

      The number of shares of Common Stock of the Registrant outstanding as of
March 16, 2001 was 24,941,749.

                      DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's definitive Proxy Statement relating to the
Registrant's 2001 Annual Meeting of Shareholders to be filed with the Securities
and Exchange Commission no later than 120 days after the end of the year covered
by this Report are incorporated by reference into Part III of this Report.
<PAGE>

                                INDEX TO ITEMS

<TABLE>
<CAPTION>
                                                                                     Page
                                                                                     ----
<S>                                                                                  <C>
PART I
          Item 1.   General Business                                                    1
          Item 2.   Properties                                                         17
          Item 3.   Legal Proceedings                                                  17
          Item 4.   Submission of Matters to a Vote of Security Holders                17

PART II.
          Item 5.   Market for the Registrant's Common Stock and Related
                    Stockholder Matters                                                18
          Item 6.   Selected Financial Data                                            18
          Item 7.   Management's Discussion and Analysis of Financial
                    Condition and Results of Operations                                20
          Item 7A.  Quantitative and Qualitative Disclosures about Market Risk         38
          Item 8.   Financial Statements and Supplementary Data; Index to
                    Consolidated Financial Statements                                  39
          Item 9.   Changes in and Disagreements with Accountants on
                    Accounting and Financial Disclosure                                39

PART III.
          Item 10.  Directors and Executive Officers of the Registrant                 40
          Item 11.  Executive Compensation                                             40
          Item 12.  Security Ownership of Certain Beneficial Owners and Management     40
          Item 13.  Certain Relationships and Related Transactions                     40

PART IV.
          Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K    41

Exhibits                                                                               41
Signatures                                                                             45
Financial Statements                                                                  F-1
</TABLE>
<PAGE>

                                    PART I

ITEM 1.   GENERAL BUSINESS

     AmeriPath, Inc. and its subsidiaries ("AmeriPath" or the "Company") is the
largest physician and laboratory company focused on providing anatomic
pathology, cancer diagnostic, genomics, and healthcare information services.
Since the first quarter of 1996, the Company has completed the acquisition of 49
physician practices (the "Practices") located in 21 states. These practices are
either directly owned by the Company or managed by the Company through one of
its subsidiaries. This includes the acquisition of Pathology Consultants of
America, Inc., d/b/a Inform DX ("Inform DX"). This transaction was accounted for
as a pooling of interests and therefore all prior year information has been
restated to reflect the acquisition of Inform DX. As a result of the Inform DX
acquisition, the Company now manages several Practices through which it derives
management fees (each a "Managed Practice"). Although such Managed Practices are
not owned by the Company, the statistical data appearing throughout this report
on form 10-K including the description of such items as the number of
pathologists, hospital contracts, employees and outpatient laboratories
incorporates the statistical data from the Managed Practices as if they were
owned by the Company. Unless otherwise indicated, the information presented in
the current and previous years includes Inform DX for all periods. The Company's
425 pathologists provide medical diagnostic services in outpatient laboratories
owned, operated and managed by the Company, hospitals, and outpatient ambulatory
surgery centers. Of these pathologists, 419 are board certified in anatomic and
clinical pathology, and 190 are also board certified in a subspecialty of
anatomic pathology, including dermatopathology (study of diseases of the skin),
hematopathology (study of diseases of the blood) and cytopathology (study of
abnormalities of the cells).

     As of December 31, 2000, the Company and the Managed Practices had
contracts with a total of 224 hospitals to manage their clinical pathology and
other laboratories and provide professional pathology services. The majority of
these hospital contracts are exclusive provider relationships of the Company and
the Managed Practices. The Company and the Managed Practices also have 42
licensed outpatient laboratories. The historical information included in this
statistical data chart includes Inform DX changes as if the acquisition had
occurred prior to 1998.

Statistical Data:
<TABLE>
<CAPTION>
                                                  December 31,
                                   ------------------------------------------
                                       1998           1999           2000
                                   ------------   ------------   ------------
     <S>                           <C>            <C>            <C>
     .  Pathologists                    299              370             425
     .  Hospital Contracts              168              207             224
     .  Employees                     1,616            1,865           2,325
     .  Outpatient laboratories          28               36              42
</TABLE>

     The Company essentially operates as a pathology group practice and is
legally structured so as to comply with the different laws dealing with the
corporate practice of medicine. Refer to the section entitled "AmeriPath
Corporate Structure" for a more detailed discussion of the Company's legal
structure in the various states.

     AmeriPath manages and controls all of the non-medical functions of the
Practices, including:

     .    recruiting, training, employing and managing the technical and support
            staff of the Practices;
     .    developing, equipping and staffing laboratory facilities;
     .    establishing and maintaining courier services to transport specimens;
     .    negotiating and maintaining contracts with hospitals, national
            clinical laboratories and managed care organizations and other
            payors;
     .    providing financial reporting and administration, clerical,
            purchasing, payroll, billing and collection, information systems,
            sales and marketing, risk management, employee benefits, legal, tax
            and accounting services;
     .    maintaining compliance with applicable laws, rules and regulations;
            and
     .    providing slide preparation and other technical services for the
            Practices.

                                       1
<PAGE>

     During 2000, the Company acquired eight Practices, including Inform DX, in
14 states (adding a total of 128 pathologists): six of these were in states in
which the Company previously operated (Pennsylvania, New York, Georgia, Florida,
Mississippi and Texas) and eight were in additional states (Virginia, Oklahoma,
Missouri, Tennessee, Massachusetts, California, Colorado and West Virginia).

Anatomic Pathology; Industry Overview

     Pathologists are medical doctors who specialize in the science of
pathology, the study of disease. Following college and medical school,
pathologists typically spend five or more years to become eligible to sit for
certification by the American Board of Pathology in anatomic and clinical
pathology. Many pathologists spend additional years of training to receive
certification in subspecialty areas of pathology such as dermatopathology (study
of diseases of the skin), hematopathology (study of diseases of the blood and
bone marrow), immunopathology (study of diseases of the immune system), and
cytopathology (study of abnormalities of cells).

     Anatomic pathology involves evaluating tissues (surgical pathology) and
cells (cytopathology) through variable magnifications using a microscope. In
surgical pathology, the goal of such microscopic evaluations is to make a
definitive diagnosis of a patient's disease. Virtually all tissues removed from
patients during surgery (hence the term "surgical" pathology) are examined under
the microscope by pathologists in order to determine whether or not a disease is
present; examples of surgical pathology specimens seen by pathologists include
breasts, prostate, skin, and bone marrow biopsies. Thus, pathologists play an
indispensable role in determining whether a patient's illness is benign,
inflammatory or cancerous. The surgical patient's subsequent treatment almost
always depends on the diagnosis rendered by the surgical pathologist. For this
reason, doctors often refer to pathologists as the "physician's physician" a
compliment that acknowledges the fact that the pathologist's diagnosis
represents a critical factor in determining a patient's future care.

     Pathologists receive tissue samples from surgical procedures performed on
both inpatients (patients seen in hospitals) and outpatients (patients seen in
physician offices and in ambulatory surgery centers). Subspecialties within the
area of surgical pathology include dermatopathology and hematopathology. The
Company currently employs 419 pathologists who are board certified in anatomic
pathology (6 are board eligible); over 190 of them have additional subspecialty
board certification.

     Cytopathology involves the evaluation of cells under the magnification of a
microscope. Pathologists examine cells obtained from body fluids, from solid
tissues aspirated through needles and from scrapings of body tissues. The most
widely known cytopathologic examination is the "Pap" smear, developed by George
Papanicolaou in 1940. A conventional "Pap" smear consists of a scraping of cells
taken from the cervix, spread on a slide, stained with a dye to color the cells,
and examined by a pathologist using a microscope. To help reduce the number of
false negatives, another form of cell accumulation was developed. This mono-
layer technology collects a sample from the cervix using a cyto-brush, which is
then rinsed into a vial filled with preserved solution. The cell solution is
processed at a laboratory by a technician. The device filters the blood and
mucous and spreads cells in a thin layer, making the slide easier to read.
Despite the higher cost of mono-layer methods, the technology is rapidly gaining
acceptance in the medical community. "Pap" smears are considered screening
tests, which provide another physician with information that suggests whether or
not a potentially dangerous condition is present. If an abnormality is detected,
the pathologist recommends what additional diagnostic procedures (such as biopsy
of the affected tissue) may be necessary. Other cytopathology examinations may,
in and of themselves, be diagnostic of a specific disease condition. As with
surgical pathology specimens, cytopathology specimens may come from hospitalized
patients, from patients in ambulatory surgery centers, from patients being seen
in private physician offices, from clinics, or from pathologists taking
aspiration biopsies directly from patients. Experts in this subspecialty of
pathology are called cytopathologists. All of the Company's anatomic
pathologists possess board certification that qualifies them to read cytology
cases. Of these pathologists, 62 are also board certified cytopathologists.

     Clinical pathology represents the second major category of pathology.
Broadly defined, clinical pathology involves the study of diseases identified by
analyzing blood or other body fluids such as urine or spinal fluid (the liquid
that surrounds the brain and spinal cord). Frequently, high volume, high
technology automated equipment performs these analyses. Pathologists'
responsibilities related to automated testing revolve around their roles as
medical directors and clinical consultants. Pathologists are legally responsible
for the validity and accuracy of clinical laboratory test results and for the
function of the clinical laboratory under the federal Clinical Laboratory
Improvement Act of 1988 ("CLIA"), for identifying

                                       2
<PAGE>

additional diagnostic and/or therapeutic approaches suggested by the laboratory
result; and for discussing the possible clinical significance of laboratory
results with attending physicians in light of the patient's history and
symptoms.

     In other words, pathologists play a critical role in ensuring that
laboratory tests are performed accurately and in a timely fashion. Once again,
the pathologist's role as a "physician's physician" makes a critical
contribution to the proper diagnosis and efficient management of patients with
virtually every disease.

     Pathologists perform their duties in laboratories within hospitals, within
free-standing local, regional, and national laboratories independent of
hospitals, within ambulatory surgery centers, and within a variety of other
settings. Because tissue and fluid samples are readily transportable,
pathologists working within one of these settings may actually receive specimens
for evaluation and diagnosis from multiple sources including physician offices,
clinics, other laboratories, and even other hospitals. This ability to deliver
work to sites having capacity to handle additional volume enhances the
pathologists' productivity and allows a pathology practice to serve a larger
geographic area. The Company uses this strategy to ensure the growth of "same
practice net revenues," while making its pathologists more productive and
efficient, and enabling the Company to better serve the customer by utilizing
the specialized expertise available within the Company's pathologists.

     The Company expects the market for anatomic pathology services to grow
primarily due to the aging of the United States population, the increasing
incidence of cancer, and accelerating medical advancements that allow for the
earlier diagnosis and treatment of diseases. The American Cancer Society
estimates that approximately 13 million Americans alive today have had, or still
have, some form of cancer and in 2000, about 1.2 million new cancer cases are
expected to be diagnosed, 47,700 of which will be new melanoma cases. Studies
published by the American Cancer Society revealed that there were approximately
1.3 million new cases of non-melanoma cases (basal cell carcinoma and squamous
cell carcinoma) diagnosed in 1999. According to the American Medical
Association, there are approximately 14,000 practicing pathologists in the
United States.

     Current trends within healthcare may accelerate the demand for the
Company's services. Healthcare cost containment pressures, the increasing
influence of managed care, and medical and technological advancements drive
hospitals to reduce the length of patient stays, decrease the number of
procedures being performed as inpatients, and increase the number of procedures
shifted to the outpatient setting. The Company expects to capitalize on this
trend by working with hospitals to eliminate the redundancies within the typical
anatomic pathology laboratories that exist within hospitals, thereby reducing
hospitals' costs. By consolidating and centralizing these functions into more
efficient and cost effective outpatient anatomic pathology laboratories, the
Company will also be able to broaden the range of subspecialty services it
offers and to develop new esoteric testing capabilities. Because the trend
toward providing medical services in outpatient settings almost certainly will
continue, the Company will be well positioned to capitalize on these
opportunities.

     Although the selection of a pathologist is primarily made by individual
referring physicians, a trend is evolving toward decisions being made by managed
care organizations and other third-party payors. While the majority of referrals
by managed care organizations for outpatient anatomic pathology services are
made directly to pathology practices on a local basis, in certain instances
managed care organizations contract with national clinical laboratories.
Generally, these national clinical laboratories subcontract anatomic pathology
and cytology services to large practices that can provide a comprehensive range
of anatomic pathology and cytology services. The Company believes that hospitals
and national clinical laboratories will continue to outsource for the provision
of anatomic pathology services.

     Historically, the anatomic pathology industry has been highly fragmented,
with the majority of the services being provided by relatively small practices.
The Company estimates that there are over 3,300 pathology practices operating in
outpatient laboratories in the United States. There is an evolving trend among
pathologists to form larger practices to provide a broader range of outpatient
and inpatient services and enhance the utilization of the practice's
pathologists. The Company believes this trend can be attributed to several
factors, including cost containment pressures by government and other third-
party payors, increased competition, managed care and the increased costs and
complexities associated with operating a medical practice. Moreover, given the
current trends of increasing outpatient services, outsourcing and the
consolidation of hospitals, pathologists are seeking to align themselves with
larger practices and physician practice management companies that can assist
providers in the evolving healthcare environment. Larger practices and corporate
structures can offer physicians certain advantages, such as:

                                       3
<PAGE>

     .    obtaining and negotiating contracts with hospitals, managed care
          providers and national clinical laboratories;
     .    marketing and selling of professional services;
     .    providing continuing education and career advancement opportunities;
     .    making available a broad range of specialists with whom to consult;
     .    providing access to capital and business and management experience;
     .    establishing and implementing more efficient and cost effective
          billing and collection procedures; and
     .    expanding the practice's geographic coverage area.

     Each of the foregoing factors support the pathologists in the efficient
management of the complex and time-consuming non-medical aspects of their
practice.

Business Strategy

     The Company's objective is to enhance its position as the largest provider
of anatomic pathology services through the following strategies:

     Focus on Anatomic Pathology. The Company believes that its focus of
providing management services to anatomic pathology practices provides it with a
competitive advantage in the management of such practices. As a result of the
Company's single focus, pathologists are able to form an internal network for
consultations and to offer specialized services and testing to their clients.
The Company also believes that its single specialty focus enhances its expertise
in managing both inpatient and outpatient pathology practices.

     In the fourth quarter of 1998, the Company began the operation of its
Center for Advanced Diagnostics ("CAD") in Fort Myers, Florida. In the second
quarter of 2000, this operation was moved to an expanded facility in Orlando,
Florida. CAD focuses on the detection and diagnosis of cancers. CAD offers a
full array of diagnostics for hematopoietic and solid tissue malignancies,
including molecular genetics, cytogenetics, flow cytometry, specialized
immunohistochemistry, and minimal residual disease detection. CAD's staff
includes multiple doctoral scientists with extensive experience and reputations
in molecular genetics, cytogenetics, flow cytometry, and pathology.
Pathologists, board certified in anatomic and clinical pathology, with
subspecialty expertise in hematopathology, cytopathology, and solid tumor
diagnosis complete the medical and scientific staff. In addition to diagnostic
testing for both AmeriPath and non-AmeriPath physicians, hospitals, and other
healthcare providers, CAD will be able to perform developmental work for
diagnostic manufacturers, clinical research organizations ("CROs"), and big
pharmaceutical companies using AmeriPath's unparalleled access to normal,
abnormal, and cancerous tissues.

     During the second quarter of 1999, the Company entered into a services
agreement with A. Bernard Ackerman, M.D., widely regarded as the preeminent
dermatopathologist in the world. In order to maximize the effectiveness of Dr.
Ackerman's affiliation with the Company, AmeriPath established the "Ackerman
Academy of Dermatopathology" and a diagnostic facility in New York City. The
Academy has an accredited dermatopathology fellowship training program with
state-of-the-art instrumentation, including a 27-head microscope, and one of the
most technologically advanced audiovisual systems available. The diagnostic
facility, AmeriPath New York, operates as a licensed independent outpatient
laboratory specializing in dermatopathology and offers adjunctive methods for
diagnosis, including immunoperoxidase, marker studies, gene rearrangement, and
immunofluorescence.

     Acquire Leading Practices. The Company expects to increase its presence in
existing markets and enter into new markets through acquisitions of,
affiliations with and strategic minority investments in leading practices. The
Company's acquisition criteria include market demographics, size, profitability,
local prominence, payor relationships, synergy with other acquisitions in a
given geographic region and opportunities for growth of the acquired practice.
The Company intends to continue to source acquisitions and affiliations by
capitalizing on the professional reputations of its acquired practices and its
pathologists, and the Company's management experience and the benefits of being
part of a public company, including increased resources and access to capital.
In existing markets, the Company targets acquisitions and affiliations that can
expand its presence, provide specialization, such as dermatopathology, and
provide operational efficiencies for the practices in that market. In new
markets, the Company seeks to acquire and affiliate with prominent practices to
serve as a platform for building upon their long-standing relationships and
reputations. The Company is revisiting its acquisition strategy, particularly
its pace of

                                       4
<PAGE>

acquisitions, and will focus on fold-in acquisitions that will densify its
operations in strategically targeted markets and larger pedestal acquisitions.

     Diagnostic Healthcare Provider. The Company has commenced its transition to
becoming a fully integrated healthcare diagnostic information provider, which
includes the Company's development of new ways to generate additional revenues
through leveraging the Company's personnel, technology and resources. In
addition to the Company's establishment of its Center for Advanced Diagnostics,
the Company has taken the steps described in the paragraph above in connection
with such transition. Although the Company believes that such new endeavors are
promising, there can be no assurance that they will be profitable.

     During the second quarter of 2000, the Company formed an alliance with
Genomics Collaborative, Inc. ("GCI") to provide fresh frozen samples from
normal, diseased, and cancerous tissue to GCI for subsequent sale to researchers
in industry and academic laboratories who are working to discover genes
associated with more common disease categories, such as heart disease,
hypertension, diabetes, osteoporosis, depression, dementia, asthma, and cancer,
with a special focus on breast, colon, and prostate tumors. This alliance
utilizes the Company's national network of hospitals, physicians, and
pathologists and GCI's capabilities in large scale DNA tissue analysis and
handling, all tied together by proprietary information systems and
bioinformatics. The financial results of the alliance with GCI were not material
to the Company's operations during 2000. The Company is working with GCI to
develop procedures to comply with informed consent requirements and other
regulations regarding the taking and processing of specimens from donors and
related records. However, failure to comply with such regulations could result
in adverse consequences including potential liability of the Company. On
September 15, 2000, the Company made a $1.0 million investment in GCI in
exchange for 333,333 shares of Series D Preferred Stock, par value $0.01.

     Expand Sales and Marketing Efforts. The Company focuses on generating
internal growth for the Practices by augmenting their existing physician and
contractual relationships through a professional sales and marketing program.
The Company's marketing program is designed to: increase relationships with
physicians over a broader geographic region; expand contracts with national
clinical laboratories that subcontract for anatomic pathology services; and
capitalize on existing managed care relationships. Since specimens are readily
transportable, the Company's sales and marketing efforts focus on expanding the
geographic scope of the Practices. Ten Practices presently have contracts to
provide outpatient anatomic and cytopathology pathology services with the two
major national clinical laboratories. These contracts generally are exclusive to
the individual Practice. The Company is seeking to extend its existing contracts
with the national clinical laboratories to include multiple Practices that cover
broader geographic regions. The Company believes that its regional business
model offers national clinical laboratories and managed care organizations a
convenient single source for anatomic pathology services.

     Increase Contracts with Hospitals. The Company seeks to obtain additional
exclusive hospital contracts for each Practice in a region through the
acquisition of other anatomic pathology practices, as well as through the
expansion of the Company's existing relationships with multi-hospital systems.
The Company believes that multi-hospital systems can benefit from contracting
with a single provider of pathology services in a geographic region through the
consolidation of clinical laboratory, histology and other ancillary hospital
support functions, thereby reducing costs, and simplifying and consolidating
contractual relationships with managed care organizations and other third party
payors. In addition, the Company believes that providing inpatient laboratory
services to multiple hospitals within a geographic area facilitates the
development and effectiveness of a successful outpatient services network by
creating market presence and economies of scale offering a broader range of
pathology expertise while maintaining the important physician relationships.

     Achieve Operational Efficiencies. The Company believes that its Practices
will benefit from the management and administrative support provided by the
Company's corporate staff, which provides oversight and technical and
administrative support services. The Company has centralized accounting and
financial reporting, payroll, benefits administration, purchasing, managed care
contracting, risk management and corporate compliance. Furthermore, the Company
has achieved and continues to pursue certain cost and operational efficiencies,
enhancing the Practices' profitability and efficiency by utilizing the Company's
collective buying power to negotiate discounts on laboratory equipment and
medical supplies and reductions in premiums for health, property, casualty and
professional liability insurance. Also, prior to their acquisition, each of the
Practices either managed their billing and collections in-house or outsourced
these functions. The Company continues to evaluate the billing and collection
systems of the Practices and centralizes such functions to the extent determined
practicable and efficient.

                                       5
<PAGE>

Regional Business Model

     The Company believes that its regional business model offers short and
long-term benefits to the Company, its pathologists, referring physicians, third
party payors and patients. The Company continues to integrate the Practices'
administrative and technical support functions, including accounting, payroll,
purchasing, risk management, billing and collections, and expects such
integration to result in enhanced operational efficiencies. The Company's
courier system for transporting specimens enables the Practices to penetrate
areas outside their current markets and enhance the utilization of their
laboratory facilities. The Company also integrates and coordinates the sales and
marketing personnel of the Practices to promote the Practices to physicians,
hospitals, surgery centers, managed care organizations and national clinical
laboratories. This marketing effort is based upon promoting the broad geographic
coverage, professional pathologist expertise and the extensive professional
services offered by the Company. The Company's strategy is to leverage its size
to expand its contracts with national clinical laboratories to all of the areas
covered by its Practices. The Company markets its services under the name
"AmeriPath" in order to develop brand identification of products and services to
payors and other clients. The Company plans to integrate the Practices'
management information systems into a single system (or at a minimum consolidate
the information resident on the various lab information systems) that will
expand the financial and diagnostic reporting capabilities of each of the
Practices and the Company. Based on the foregoing, the Company believes that
implementation of this regional model increases the revenues and profitability
of the Practices in the region, and the Company is applying this regional
business model, in whole or in part, to other states in which it operates.

     Through the implementation of its operating strategies, the Company
continues to develop integrated networks of anatomic pathology practices on a
regional basis. These networks consist of a number of practices that together:
(i) have a substantial regional market presence; (ii) offer a broad range of
services; (iii) have extensive physician contacts; and (iv) possess
complementary strengths and opportunities for operational and production
efficiencies. The Company has developed its regional business model in Florida
and is replicating its model in Texas and the Midwest. The Company believes that
Florida represents an attractive market due to its population, demographics,
including the growth of the general population and a large elderly population,
as well as the Company's familiarity and understanding of the anatomic pathology
market in Florida. The Company currently owns, controls and manages anatomic
pathology practices throughout Florida including Miami, Fort Lauderdale,
Jacksonville, Orlando, Daytona, Fort Myers and Tampa. In addition, the Company
contracts with Quest Diagnostics ("Quest"), a national clinical laboratory, to
provide anatomic pathology services on an exclusive basis in most of Florida's
counties.

     The Company believes that its improving performance in Florida, as
reflected in the following table, is due in part to the favorable results of its
regional model in Florida:

<TABLE>
<CAPTION>
                                                                 December 31,
                                                 ---------------------------------------
                                                     1998            1999           2000
                                                 ------------    ------------   ------------
<S>                                              <C>             <C>            <C>
Florida Statistics                                       (dollars in millions)
Number of Practices                                     11              12              14
Pathologists                                            82              80              83
Hospital contracts                                      31              31              32
Net revenues                                         $85.1           $92.5          $104.0
Operating margin before amortization                 $25.6           $27.7          $ 30.4
Operating margin as a percent of net revenues         30.1%           30.0%           29.2%
</TABLE>

AmeriPath Corporate Structure

     AmeriPath is a holding company that, through its subsidiaries, provides
pathology services and management services to other pathology laboratories. The
Company's revenues are primarily derived from two segments: its Owned Practices
and its Managed Practices, as further described below. The Owned Practices
consist of subsidiaries (the "Practice Subsidiaries") that directly employ
physicians, and subsidiaries (the "Manager Subsidiaries") that enter into
management services agreements with affiliated practices (each, a "PA
Contractor") which, in turn, employ the physicians. The Manager Subsidiaries are
typically utilized in states with laws that restrict the corporate practice of
medicine. As a result of the corporate practice of medicine doctrine, the
affiliated physicians in these states retain ownership of the PA Contractor, but
the Manager Subsidiaries typically enter into contractual arrangements that
generally (i) prohibit the affiliated physicians from transferring their
ownership interests in the PA Contractor, except in very limited circumstances,
and (ii) require the affiliated physicians to transfer their ownership in the PA
Contractor to designees of AmeriPath upon the occurrence of specified

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events. The Managed Practices are affiliated practices that are not owned by the
Company, but they contract with the Company to provide management services. The
manner in which AmeriPath operates a particular Practice is determined primarily
by whether it is an Owned or Managed Practice and the corporate practice of
medicine restrictions of the state in which the Practice is located and other
applicable regulations. The Company believes that it exercises care in its
efforts to structure its practices and arrangements with hospitals and
physicians and its subsidiaries so as to comply with relevant federal and state
laws and believes that such current arrangements and practices comply with all
applicable statutes and regulations. However, due to uncertainties in the law
there can be no assurance that such arrangements or practices could be deemed to
be in noncompliance in the future, or that such occurrence could not result in a
material adverse effect on the Company.

     Corporate practice of medicine restrictions, which are discussed in further
detail under "Government Regulation" below, generally prohibit corporate
entities from employing or otherwise exercising control over physicians. In
states that do not prohibit a for-profit corporation from employing physicians
such as Florida, Alabama, Mississippi and Kentucky, AmeriPath operates its Owned
Practices through Practice Subsidiaries, which are subsidiary corporations of
AmeriPath that directly employ the physicians. In states that prohibit a for-
profit corporation from employing physicians, such as Texas, Indiana, Ohio,
North Carolina, Michigan, Wisconsin, New York and Pennsylvania, AmeriPath
operates each Owned Practice through a Manager Subsidiary, which is a subsidiary
of AmeriPath that has a long-term management agreement with the applicable PA
Contractor, which in turn employs the physicians (see "--Ownership and
Management of the PA Contractor" for explanation of PA Contractor). In many
cases, several Practices are included within or organized under a single
Practice Subsidiary or PA Contractor, as the case may be.

     Owned Practices. Owned practices are operated through Manager and Practice
Subsidiaries. The Manager and Practice Subsidiaries are wholly-owned
subsidiaries of AmeriPath and the officers and directors of such companies are
generally members of AmeriPath's executive management team. The financial
statements of the Manager and Practice Subsidiaries are included in the
consolidated financial statements of AmeriPath.

     Ownership and Management of the PA Contractors. The term PA Contractor, is
used throughout this document to refer to an entity which has a contractual
relationship with the Company but is not owned directly by AmeriPath. These
entities can be a professional corporation or professional association, as
permitted and defined in various state statutes. The PA Contractors operating in
North Carolina, Wisconsin, New York, Michigan and Pennsylvania are owned by
physicians affiliated with AmeriPath. To the extent permitted by law, the
officers and directors of the PA Contractors are members of AmeriPath's
executive management team. However, in states where law prohibits such non-
licensed physician personnel from serving as an officer or director of a PA
Contractor, eligible affiliated physicians serve in such positions. The
affiliated physicians who own PA Contractors have entered into agreements with
AmeriPath that generally (i) prohibit such affiliated physicians from
transferring their ownership interests in the PA Contractor, except in very
limited circumstances and (ii) require such affiliated physicians to transfer
their ownership in the PA Contractor to designees of AmeriPath upon the
occurrence of specified events.

     The PA Contractors in Ohio and Indiana are owned by trusts. The beneficiary
of such trusts is AmeriPath and the Trustees of such trusts are affiliated
physicians. The PA Contractors operating in Texas are organized as not-for-
profit 5.01(a) corporations, which are discussed in greater detail under the
caption "Government Regulation" below. The sole member of the not-for-profit PA
Contractors in Texas is AmeriPath.

     Each PA Contractor is party to a long-term management agreement with one of
the Company's Manager Subsidiaries. Under the terms of these management
agreements, AmeriPath generally provides all non-medical and administrative
support services to the Practices including accounting and financial reporting,
human resources, payroll, billing, and employee benefits administration. In
addition, the management agreements give the Manager Subsidiaries certain rights
with respect to the management of the non-medical operations of the PA
Contractors. The management agreements require the PA Contractors to pay a
management fee to the applicable Manager Subsidiaries. The fee structure is
different for each Practice based upon various factors, including applicable
law, and includes fees based on a percentage of earnings, performance-based
fees, and flat fees that are adjusted from time to time.

     In accordance with Emerging Issues Task Force 97-2:"Application of FASB
Statement No. 94 and APB Opinion No. 16 to Physician Practice Management
Entities and Certain Other Entities with Contractual Management Agreements"
("EITF 97-2"), the financial statements of the PA Contractors are included in
the consolidated financial statements of AmeriPath

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since AmeriPath has a controlling interest in the PA Contractor.

     Managed Practices. The term Managed Practices refers to AmeriPath's
operation and management of pathology practices under long-term service
agreements with affiliated physician groups. Generally, the Company acquires the
practice's assets, and the physician groups maintain their separate corporate or
partnership entities and enter into employment and noncompete agreements with
the practicing physicians. Costs of obtaining service agreements are amortized
using the straight-line method over 25 years.

     Service agreements represent the exclusive right to operate the Company's
practices in affiliation with the related physician groups during the term of
the agreements. Pursuant to the service agreements, the Company provides the
physician groups with equipment, supplies, support personnel, and management and
financial advisory services. Physician groups are responsible for the
recruitment and hiring of physicians and all other personnel who provide
pathological services, and for all issues related to the professional, clinical
and ethical aspects of the practice. As part of the service agreements,
physician groups are required to maintain medical malpractice insurance which
names the Company as an additional insured. The Company is also required to
maintain general liability insurance and name the physician groups as additional
insureds. Upon termination of the service agreements, the respective physician
groups are required to obtain continuing liability insurance coverage under
either a "tail policy" or a "prior acts policy."

     The management services fees charged under the service agreements are based
on a predetermined percentage of net operating income of the Managed Practices.
Management service revenue is recognized by the Company at the time physician
service revenue is recorded by the physician group. The Company also
participates to varying degrees in non-physician revenues generated from
ancillary services offered through the laboratories. The Company charges a
capital fee for the use of depreciable assets owned by the Company and
recognizes revenue for all practice expenses that are paid on behalf of the
practices. Practice expenses exclude the salaries and benefits of the
physicians.

     AmeriPath does not consolidate the financial statements of the Managed
Practices because it does not have a controlling financial interest, as defined
by EITF 97-2.

     Operation of Practices Generally. AmeriPath manages and controls all of the
non-medical functions of the Practices. AmeriPath is not licensed to practice
medicine. The practice of medicine is conducted solely by the affiliated
physicians.

     In managing the Owned Practices, the Board of Directors and management of
AmeriPath formulate strategies and policies which are implemented locally on a
day-to-day basis by each Owned Practice, without regard to whether such practice
is organized as a Manager or Practice Subsidiary or PA Contractor. Each Owned
Practice has a pathologist Managing Director who is responsible for overseeing
the day-to-day management of the Owned Practice, who reports to one of four
Regional Managing Directors, three of whom are pathologists, who in turn report
to executive officers of the Company. AmeriPath's Medical Director and Chief
Operating Officer develop and review standards for the affiliated physicians and
their medical practices and review quality and peer review matters with each
Owned Practice's Medical Director (or a medical review committee). AmeriPath's
Chief Operating Officer, a physician, oversees all employment matters with
respect to affiliated physicians and staffing decisions at the Owned Practices.

     The Managed Practices, pursuant to their service agreements, manage all
aspects of the affiliated physician groups other than the provision of medical
services, which is controlled solely by the physician groups. The affiliated
physician group's joint policy board, equally represented by physicians and
employees of AmeriPath, focus on strategic and operational planning, marketing,
managed care arrangements and other major issues facing the group.

     Hospital Contracts and Laboratories. The Practices typically contract with
hospitals to exclusively provide pathology services. The Practices staff each
hospital with at least one pathologist who generally serves as the Medical
Director of the hospital laboratory and who facilitates the hospital's
compliance with licensing requirements. The Practices are responsible for
recruiting, staffing and scheduling the Practice's affiliated physicians in the
local hospital's inpatient laboratories. The Medical Director of the laboratory
is responsible for: (i) the overall management of the laboratory, including
quality of care, professional discipline and utilization review; (ii) serving as
a liaison to the hospital administrators and medical staff; and (iii)
maintaining professional and public relations in the hospital and the community.
Several Practices

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have both outpatient laboratories and hospital contracts, which allow outpatient
specimens to be examined by the hospital pathologists, enhancing the utilization
of pathologists in inpatient facilities. In the hospitals, technical personnel
are typically employed by the hospital, rather than by the Practices. Upon
initiation, the hospital contracts typically have terms of one to five years and
contain conditional renewal provisions. Some of the contracts also contain
clauses that allow for termination by either party with relatively short notice.
Loss of any particular hospital contract would not only result in a loss of net
revenue to the Company, but also a loss of outpatient net revenue that may be
derived from the relationship with a hospital and its medical staff. Continuing
consolidation in the hospital industry may result in fewer hospitals or fewer
laboratories as hospitals move to combine their operations.

     In the past, the Company provided services at four hospitals and an
ambulatory care facility owned by Primary Health Systems ("PHS"), a regional
hospital network in Cleveland, Ohio. During the first quarter of 2000, PHS began
implementing a plan of reorganization filed under Chapter 11 with the U.S.
Bankruptcy Court for the District of Delaware, and closed one hospital. During
the second quarter, the bankruptcy court approved the sale of two hospitals and
the ambulatory care facility to local purchasers in the Cleveland area. The
purchasers, who elected to employ their own pathologists, did not accept the
Company's contracts with these two hospitals and the ambulatory care facility.
One hospital has not been sold and continues to do business with the Company.
This resulted in asset impairment and related charges of $5.2 million in 2000.
In addition, during the fourth quarter of 2000, a hospital in South Florida
where AmeriPath had the pathology contract, requested proposals for its
pathology services, and AmeriPath was unsuccessful in retaining this contract.
Based upon the remaining projected cash flow from this hospital network, the
Company determined that the intangible assets were impaired and recorded a pre-
tax non-cash charge of approximately $1.0 million.

     As of December 31, 2000, the Practices had contracts with 224 hospitals, of
which the majority are exclusive, and 27 of which are owned by HCA - The
Healthcare Company ("HCA"), the country's largest publicly owned hospital
company formerly known as Columbia/HCA Healthcare Corporation. Although the
Company, through its acquisitions, has had relationships with these hospitals
for extended periods of time, the closure and/or sales, or termination of one or
more of these contracts could have a material adverse effect on the Company's
financial position and results of operations. No assurance can be given that
such contracts with hospitals will not be terminated or that they will be
renewed in the future.

     All of AmeriPath's outpatient laboratories are licensed and certified under
the guidelines established by CLIA and applicable state statutes and are managed
by a Medical Director of the laboratory. AmeriPath's corporate compliance,
quality assurance and quality improvement programs are designed to assure that
all laboratories and other operations are in compliance with applicable laws,
rules and regulations.

Information Technology

     During 2000, the Company reorganized its Information Technology Group
("IT") to better serve the existing and planned model for the information needs
of the Company. IT focused on three central issues: increasing reliability of
our information systems, conversion to the new billing program, and beginning in
the fourth quarter, a heightened effort of sales and marketing technology
initiatives. During 2000, the IT staffing was increased, including the hiring of
a Chief Information Officer, Director of IT Operations, Director of Software
Development, and the establishment of a Project Management office. The new team
established a "Best Practice" approach to managing services to the Company
laboratories. These services have resulted in better performing information
systems, increased focus on centralization of information, and a greater level
of standardization across our businesses.

     The Company recognized the opportunity in the market for enhanced reporting
to our customers and has launched a technology initiative to produce reports
that include organ maps, photomicrographs and patient education. Enhanced
reports in GI, Obstetrics and Gynecology, and Urology are available in most of
our markets and the technology initiative is expected to be completed by the end
of the second quarter of 2001. Our programs for acquiring the images and
producing the reports are very efficient and additional programs will be
implemented as customer sales increase.

     Consolidation of data to our data warehouse continues and will be completed
at the end of the first quarter of 2001. The Inform DX acquisition provided
opportunities to reduce the effort and expense in completing this project
because Inform DX had already made a significant amount of investment in program
development and related technology. The information acquisition process and
repository of our utilization data has been completed. The sales and marketing
department will be the early adopters of the new program to manage and market
our business.

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<PAGE>

     The company is focused on being federal Health Insurance Portability and
Accountability Act of 1996 ("HIPAA") compliant and an audit will be conducted to
assure compliance. We are currently in the planning stages of the audit and have
interviewed outside services for engagement.

Sales and Marketing

     Outpatient Market. The Company's marketing efforts are focused on
physicians, hospital and outpatient surgery center administrators, national
clinical laboratories and managed care organizations. Other than Inform DX,
prior to being acquired by the Company, the Practices' marketing efforts were
primarily based on the professional reputations and the individual efforts of
pathologists. The Company believes that there is an opportunity to capitalize on
these professional reputations by hiring experienced personnel and utilizing
professional sales and marketing techniques. Historically, some of the
outpatient practices marketed outpatient services primarily to dermatologists,
over a broad geographic area including neighboring states. The Company continues
to expand its sales force with additional sales personnel and management staff
to accommodate new acquisitions as well as increase same store growth. These
field representatives are supervised by regional sales managers who coordinate
the implementation of regional contracting efforts, leverage operational
capabilities, support national sales strategies and provide ongoing training and
field sales support. The Regional Sales Managers report to the Vice President of
Sales and Marketing to ensure the implementation of consistent and effective
sales activities nationwide. The sales and marketing staff also includes
Directors of Marketing and Managed Care. In 2000, the Company added one position
to the marketing department, a manager of art and creative design, to coordinate
support efforts for its product managers who report directly to the Director of
Marketing. The Director of Managed Care directs regional managers of managed
care in negotiating additional contracts. In 2000, the Company added one
northeast regional manager to its Managed Care Department. The Director of
Managed Care Sales supervises the department's efforts in securing national
contracts, while the Manager of Contract Administration ensures adherence to
contract terms and conditions.

     National Clinical Laboratory Marketing. The national clinical laboratories
contract with managed care organizations to provide clinical laboratory
services, as well as anatomic pathology and cytology services. The clinical
laboratory market is primarily dominated by two laboratories, Quest and
Laboratory Corporation of America Holdings ("LabCorp"). Their contracts with
managed care organizations are typically capitated. Ten Practices have
subcontracts with these two large national clinical laboratories to provide
anatomic pathology and cytology services. Under these contracts, which typically
run from one to three years with automatic renewals unless terminated earlier,
the Practices bill the national clinical laboratories on a discounted fee-for-
service basis. The reduced fee is offset by the national clinical laboratories
provision of courier services, supplies, and reduced billing costs and lower bad
debts, since the national clinical labs bear the capitation risk. The Company is
directing its marketing efforts to national clinical laboratories to expand
these contracts on a regional basis to additional Practices as well as to enter
into new contracts. At the same time, the Company is seeking to secure new
contracts and expand existing provider contracts with managed care organizations
for the provision of anatomic pathology services directly to their members and
is prepared to negotiate flexible arrangements with managed care organizations,
including discounted fee-for-service or capitated contracts. There can be no
assurance that the Company's effort to contract directly with managed care
organizations will not adversely affect the Company's relationship with the
national clinical laboratories.

Client and Payor Relationships

     The Practices also provide services to a wide variety of other healthcare
providers and payors including physicians, government programs, indemnity
insurance companies, managed care organizations and national clinical
laboratories. Fees for anatomic pathology services rendered to physicians are
billed either to the physicians, to the patient or to the patient's third party
payor.

Contracts and Relationships with Owned Practice Physicians

     For the Owned Practices, the Company employs pathologists, or manages the
PA Contractors who employ pathologists, to provide medical services in hospitals
or in other inpatient and outpatient laboratories. Pathologist employment
agreements typically have terms of three to five years and generally can be
terminated at any time upon 60 to 180 days notice. The pathologists generally
receive a base salary, fringe benefits, and may be eligible for an incentive
performance bonus. In addition to compensation, the Company provides its
pathologists with uniform benefit plans, such as disability, supplemental
retirement,

                                       10
<PAGE>

life and group health insurance and medical malpractice insurance. The
pathologists are required to hold a valid license to practice medicine in the
jurisdiction in which they practice and, with respect to inpatient or hospital
services, to become a member of the medical staff at the contracting hospital
with privileges in pathology. The Company is responsible for billing patients,
physicians and third party payors for services rendered by the pathologists.
Most of the employment agreements prohibit the physician from competing with the
Company within a defined geographic area and prohibit solicitation of
pathologists, other employees or clients of the Company for a period of one to
two years after termination of employment.

     The Company's business is dependent upon the recruitment and retention of
pathologists, particularly those with subspecialties, such as dermatopathology.
While the Company has been able to recruit (principally through practice
acquisitions) and retain pathologists, no assurance can be given that the
Company will be able to continue to do so successfully or on terms similar to
its current arrangements. The relationship between the Company's pathologists
and their respective local medical communities is important to the operation and
continued profitability of the Practices. In the event that a significant number
of pathologists terminate their relationships with the Company or become unable
or unwilling to continue their employment, the Company's business could be
materially and adversely affected.

     The experience and specialized certifications of the Company's affiliated
physicians provide opportunities for immediate consultation in complex cases
among the internal network of affiliated physicians. Pathology is a specialized
field of medicine and is a core requirement in a dermatologist's training.
Through teaching at medical institutions, the Company's affiliated physicians
have an opportunity to develop a reputation and following among residents and
practicing physicians. Several affiliated physicians have teaching positions
with universities or affiliations with other educational institutions for the
training and continuing medical education of physicians, particularly
dermatologists.

Government Regulations

     The Company's business is subject to many of governmental and regulatory
requirements relating to healthcare matters as well as laws and regulations that
relate to business corporations. The Company believes that it exercises care to
structure its practices and arrangements with hospitals and physicians to comply
with relevant federal and state law. It also believes such current arrangements
and practices do comply with applicable statutes and regulations. However, there
can be no assurance that the Company's current or prior practices or
arrangements will not be found to be in noncompliance with law, or that such
occurrence will not result in a material adverse effect to the Company.

     The Company derived approximately 20% and 19% of its Owned Practices'
collections for the years ended December 31, 1999 and 2000, respectively, from
payments made by government sponsored healthcare programs (principally Medicare
and Medicaid). The decrease in the percentage of collections attributable to
government sponsored healthcare programs resulted primarily from the acquisition
of practices outside Florida, with smaller Medicare populations. These programs
are subject to substantial regulation by the federal and state governments. Any
change in payment regulations, policies, practices, interpretations or statutes
that places limitations on reimbursement amounts, or changes in reimbursement
coding, or practices could materially and adversely affect the Company's
financial condition and results of operations. Increasing budgetary pressures at
both the federal and state level and concerns over the continued increase of the
costs of healthcare have led, and may continue to lead, to significant
reductions in health care payments. State concerns over the growth in Medicaid
also could result in payment reductions. Although governmental payment
reductions have not materially affected the Company in the past, it is possible
that such changes in the future could have a material adverse effect on the
Company's financial condition and results of operations. In addition, Medicare,
Medicaid and other government sponsored healthcare programs are increasingly
shifting to some form of managed care. Some states have recently enacted
legislation to require that all Medicaid patients be converted to managed care
organizations, and similar legislation may be enacted in other states, which
could result in reduced payments to the Company for such patients. In addition,
a state-legislated shift in a Medicaid plan to managed care could cause the loss
of some, or all, Medicaid business for the Company in that state if the Company
were not selected as a participating provider. Additionally, funds received
under all health care reimbursement programs are subject to audit with respect
to the proper billing for physician services. Retroactive adjustments of revenue
from these programs could occur. The Company expects that there will continue to
be proposals to reduce or limit Medicare and Medicaid payment for services.

     In connection with practice acquisitions, the Company performs certain due
diligence investigations with respect to the potential liabilities of acquired
practices and obtains indemnification with respect to certain liabilities from
the sellers of such practices. Nevertheless, there can be undiscovered claims
that subsequently arise. There can be no assurance that any liabilities for
which the Company becomes responsible (despite such indemnification) will not be
material or will not exceed either the

                                       11
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limitations of any applicable indemnification provisions or the financial
resources of the indemnifying parties. Furthermore, the Company, through its
Corporate Compliance Program, regularly reviews the Practices' compliance with
federal and state health care laws and regulations and revises as appropriate
the operations, policies and procedures of its Practices to conform with the
Company's policies and procedures and applicable law. While the Company believes
that the operations of the Practices prior to their acquisition were generally
in compliance with such laws and regulations, there can be no assurance that the
prior operations of the Practices were in full compliance with such laws, as
such laws may ultimately be interpreted. Moreover, although the Company
maintains an active compliance program, it is possible that the government might
challenge some of the current practices of the Company as not being in full
compliance with such laws. A violation of such laws by a practice or the Company
could result in civil and criminal penalties, exclusion of the physician, the
practice or the Company from participation in Medicare and Medicaid programs
and/or loss of a physician's license to practice medicine.

     Fraud and Abuse. Federal anti-kickback law and regulations prohibit any
knowing and willful offer, payment, solicitation or receipt of any form of
remuneration, either directly or indirectly, in return for, or to induce: (i)
the referral of an individual for a service for which payment may be made by
Medicare and Medicaid or certain other federal health care programs; or (ii) the
purchasing, leasing, ordering or arranging for, or recommending the purchase,
lease or order of, any service or item for which payment may be made by
Medicare, Medicaid or certain other federal healthcare programs. Violations of
federal anti-kickback rules are punishable by monetary fines, civil and criminal
penalties and exclusion from participation in Medicare, Medicaid and other
federal health care programs. Several states have laws that are similar.

     Safe Harbors. The federal government has published regulations that provide
"safe-harbors" that protect from prosecution under federal anti-kickback laws
business transactions that meet certain requirements. Failure to meet the
requirements of a safe harbor, however, does not necessarily mean a transaction
violates the anti-kickback law. The Company believes its operations are in
material compliance with applicable Medicare and fraud and abuse laws and seeks
to structure arrangements to comply with applicable safe harbors where
reasonably possible. There is a risk however, that the federal government might
investigate such arrangements and conclude they violate the anti-kickback
statute. If the Company's arrangements were found to be illegal, the Company,
the physician groups and/or the individual physicians would be subject to civil
and criminal penalties, including exclusion from the participation in government
reimbursement programs, which could materially adversely affect the Company.

     Advisory Opinions. The Department of Health and Human Services Office of
Inspector General ("OIG") issues advisory opinions that provide advice on
whether proposed business arrangements violate the anti-kickback law. In
Advisory Opinion 99-13, the OIG opined when prices for laboratory services for
non-governmental patients are discounted below Medicare reimbursable rate, the
anti-kickback law may be implicated. The OIG found prices discounted below the
laboratory supplier's costs to be particularly problematic. In the same opinion,
OIG suggested that a laboratory may be excluded from federal health care
programs if it charges Medicare or Medicaid amounts substantially in excess of
discounted charges to the physician. In the OIG's opinion, charges are likely
excessive if the profit margin for Medicare business exceeds profit margin for
non-federally reimbursed business.

     The OIG also has addressed physician practice management arrangements in an
advisory opinion. In Advisory Opinion 98-4, the OIG found that management fees
based on a percentage of practice revenues may violate the anti-kickback
statute. These Advisory Opinions suggest that OIG might challenge certain prices
below Medicare reimbursement rates or arrangements based on a percentage of
revenues. While the Company believes its arrangements comply with applicable
law, OIG's advisory opinions suggest there is a risk of an adverse OIG finding
relating to practices reviewed in the advisory opinions. Any such finding could
have a material adverse impact on the Company.

     Self-Referral and Financial Inducement Laws. The Company is also subject to
federal and state statutes and regulations banning payments for referral of
patients and referrals by physicians to health care providers with whom the
physicians have a financial relationship. The federal Stark Law applies to
Medicare and Medicaid and prohibits a physician from referring patients for
certain services, including laboratory services, to an entity with which the
physician has a financial relationship. Financial relationships include both
investment interests in an entity and compensation arrangements with an entity.
If an arrangement is covered by the Stark Law, all of the requirements of a
Stark Law exception must be satisfied. Many states also have laws that are
similar to the Stark Law. These statutes and regulations generally apply to
services reimbursed by both governmental and private payors. Violations of these
laws may result in prohibition of payment for services rendered, loss of
licenses as well as fines and criminal penalties. In addition, violation of the
Stark Law may result in exclusion from Medicare and Medicaid. State statutes and
regulations affecting the referral of patients to health care providers range
from statutes and regulations that are substantially

                                       12
<PAGE>

the same as the federal laws and the safe harbor regulations to a simple
requirement that physicians or other health care professionals disclose to
patients any financial relationship the physicians or health care professionals
have with a health care provider that is being recommended to the patients.
These laws and regulations vary significantly from state to state, are often
vague and, in many cases, have not been interpreted by courts or regulatory
agencies. Adverse judicial or administrative interpretations of any of these
laws could have a material adverse effect on the operating results and financial
condition of the Company. In addition, expansion of the Company's operations to
new jurisdictions, or new interpretations of laws in existing jurisdictions,
could require structural and organizational modifications of the Company's
relationships with physicians to comply with that jurisdiction's laws. Such
structural and organizational modifications could have a material adverse effect
on the operating results and financial condition of the Company.

     Physicians affiliated with the Company may have financial relationships
with the Company, as defined by the federal Stark Law, in the form of
compensation arrangements, ownership of Company shares, contingent promissory
notes with the Company, or a combination of the above. With respect to
compensation arrangements, the Company believes that existing arrangements are
structured to comply with an applicable Stark Law exception. With respect to the
ownership of shares, the Company believes that the ownership of Company shares
by physicians should fall within the publicly traded stock exception to the
Stark Law's definition of financial relationship. However, certain physician-
owned shares do have a transfer restriction and, as a result, the government
could take the position that all of the requirements of this exception are not
met. The contingent notes held by some physicians do not meet an exception to
the Stark Law's definition of financial relationship. In either case, however,
the Company believes that its current operations comply with the Stark Law.
Pathologists are exempted from the Stark regulations for work that they order
themselves and perform themselves or in their associated laboratory. However,
physicians affiliated with the Company do make referrals that could be
considered covered under the Stark law. We believe however, that the Company
does meet, at a minimum, one of the applicable exceptions stated in the Stark
Law and regulations, in the event that the government considers these
transactions to covered by the Stark Law. All physicians affiliated with the
Company have been instructed on the Stark Law and regulations and are believed
to be following such instructions. To the extent physicians affiliated with the
Company may make a referral to the Company and a financial relationship exists
between the Company and the referring physician through either the ownership of
Company shares or contingent notes, the government might take the position that
the arrangement does not comply with the Stark Law. Any such finding could have
a material adverse impact on the Company.

     Government Investigations of Hospitals and Hospital Laboratories.
Significant media and public attention has been focused on the health care
industry due to ongoing federal and state investigations reportedly related to
certain referral and billing practices, laboratory and home health care services
and physician ownership and joint ventures involving hospitals. Most notably,
HCA is under investigation with respect to such practices. The Company operates
laboratories on behalf of and has numerous contractual agreements with
hospitals, including 27 pathology service contracts with HCA hospitals as of
December 31, 2000. The government's ongoing investigation of HCA could result in
a governmental investigation of one or more of the Company's operations that
have arrangements with HCA. In addition, the OIG and the Department of Justice
have initiated hospital laboratory billing review projects in certain states and
are expected to extend such projects to additional states, including states in
which the Company operates hospital laboratories. These projects increase the
likelihood of governmental investigations of laboratories owned and operated by
the Company. Although the Company monitors its billing practices and hospital
arrangements for compliance with prevailing industry practices under applicable
laws, such laws are complex and constantly evolving and there can be no
assurance that the governmental investigators will not challenge the Company's
or industry practices. The government's investigations of entities with which
the Company contracts may have other effects which could materially and
adversely affect the Company, including termination or amendment of one or more
of the Company's contracts or the sale of hospitals potentially disrupting the
performance of services under such contracts.

     Corporate Practice of Medicine. The Company is not licensed to practice
medicine. The practice of medicine is conducted solely by its licensed
pathologists. The manner in which licensed physicians can be organized to
perform and bill for medical services is governed by the laws of the state in
which medical services are provided and by the medical boards or other entities
authorized by such states to oversee the practice of medicine. Business
corporations are generally not permitted under certain state laws to exercise
control over the medical judgments or decisions of physicians, or engage in
certain practices such as fee-splitting with physicians. In states where the
Company is not permitted to directly own a medical practice, the Company
performs only non-medical and administrative and support services, does not
represent to the public or its clients that it offers medical services and does
not exercise influence or control over the practice of medicine. See discussion
"AmeriPath Corporate Structure", above.

                                       13
<PAGE>

     The Company believes that it currently is in material compliance with the
corporate practice laws in the states in which it operates. Nevertheless, there
can be no assurance that regulatory authorities or other parties will not assert
that the Company is engaged in the corporate practice of medicine. If such a
claim were successfully asserted in any jurisdiction, the Company, and its
pathologists could be subject to civil and criminal penalties under such
jurisdiction's laws and could be required to restructure their contractual and
other arrangements. Alternatively, some of the Company's existing contracts
could be found to be illegal and unenforceable. In addition, expansion of the
operations of the Company to other "corporate practice" states may require
structural and organizational modification of the Company's form of relationship
with physicians, PA Contractors or hospitals. Such results or the inability to
successfully restructure contractual arrangements could have a material adverse
effect on the Company's financial condition and results of operations.

     Medicare Fee Schedule Payment for Clinical Diagnostic Laboratory Testing.
Medicare reimburses hospitals based on locality-specific fee schedules on the
basis of a reimbursement methodology with Consumer Price Index ("CPI") related
adjustments. Medicare includes payment for services performed for clinical
diagnostic laboratory inpatients within the prospectively determined Diagnosis
Related Group rate paid to the hospital. Additionally, state Medicaid programs
may pay no more than the Medicare fee schedule amount. Congress also has
implemented a national cap on Medicare clinical diagnostic laboratory fee
schedules. This national cap has been lowered several times and is now at
approximately 74% of the national median. In addition, Congress frequently has
either limited or eliminated the annual CPI adjustments of the Medicare clinical
diagnostic laboratory fee schedules. The Omnibus Budget Reconciliation Act of
1993 eliminated the adjustment for the years 1994 and 1995. In 1996 and 1997,
however, the fee schedule adjustments were 3.2% and 2.7%, respectively. Even
these modest increases were reduced in some areas due to a recalculation of
national medians and by conversion in some carrier areas to a single statewide
fee schedule. In the Balanced Budget Act of 1997 ("BBA"), Congress again
eliminated the annual adjustments, this time for the years 1998 through 2002.
The adjustment limitations and changes in the national cap made to date have not
had, and are not expected by the Company to have, a material adverse effect on
the Company's results of operations. Any further significant decrease in such
fee schedules could have a material adverse effect on the Company.

     Due to uncertainty regarding the implementation of the above-described
Medicare developments, the Company currently is unable to predict their ultimate
impact on the laboratory industry generally or on the Company in particular.
Reforms may also occur at the state level (and other reforms may occur at the
federal level) and, as a result of market pressures, changes are occurring in
the marketplace as the number of patients covered by some form of managed care
continues to increase. In the past, the Company has offset a substantial portion
of the impact of price decreases and coverage changes through the achievement of
economies of scale, more favorable purchase contracts and greater operational
efficiencies. However, if further substantial price decreases or coverage
changes were to occur, or if the government were to seek any substantial
repayments or penalties from the Company, such developments would likely have an
adverse impact on gross profits from the Company's testing services unless
management had an opportunity to mitigate such impact.

     Reevaluations and Examination of Billing. Payors periodically reevaluate
the services they cover. In some cases, government payors such as Medicare also
may seek to recoup payments previously made for services determined not to be
covered. Any such action by payors would have an adverse affect on the Company's
revenues and earnings.

     Moreover, in recent months the federal government has become more
aggressive in examining laboratory billing and seeking repayments and penalties
as the result of improper billing for services (e.g., the billing codes used),
regardless of whether carriers had furnished clear guidance on this subject. The
primary focus of this initiative has been on hospital laboratories and on
routine clinical chemistry tests which comprise only a small part of the
Company's revenues. Although the scope of this initiative could expand, it is
not possible to predict whether or in what direction the expansion might occur.
The Company believes its practices are proper and do not include any allegedly
improper practices now being examined. However, no assurance can be given that
the government will not broaden its initiative to focus on the type of services
furnished by the Company or, if this were to happen, on how much money, if any,
the Company might be required to repay.

     Furthermore, HIPAA and Operation Restore Trust have strengthened the powers
of the OIG and increased the funding for Medicare and Medicaid audits and
investigations. As a result, the OIG has expanded and continues to expand the
scope of its health care audits and investigations. State enforcement actions
are similarly expanding. Federal and state audits and inspections, whether on a
scheduled or unannounced basis, are conducted from time to time at the Company's
facilities.

     Due to the uncertain nature of coding for pathology services, the Company
cannot assure that issues such as those addressed in the 1997 Operation Restore
Trust investigation will not arise again. If a negative finding is made as a
result of such

                                       14
<PAGE>

an investigation, the Company could be required to change coding practices or
repay amounts paid for incorrect practices either of which could have a
materially adverse effect on the operating results and financial condition of
the Company.

     BBA Additions to Coverage. The BBA added coverage for an annual screening
pap smear for Medicare beneficiaries who are at high risk of developing cervical
or vaginal cancer and for beneficiaries of childbearing age effective January 1,
1998, as well as coverage for annual prostate cancer screening, including a
prostate-specific antigen blood test, for beneficiaries over age 50, effective
January 1, 2000. Although most women of childbearing age and men under age 65
are not Medicare beneficiaries, the addition of Medicare coverage for these
tests could provide additional revenues for the Company. With the BBA, Congress
merged the three existing conversion factors into one for all types of services
provided resulting in a single conversion factor for 2000 of $36.61. The
physician fee schedule conversion factor has increased from $36.61 to $38.26 in
2001.

     Laboratory Compliance Plan. In February 1997, OIG released a model
compliance plan for laboratories that is based largely on the corporate
integrity agreements negotiated with the laboratories which settled a number of
government enforcement actions against laboratories under Operation Restore
Trust, initiated in 1995. The Company adopted and maintains a compliance plan,
which includes components of OIG's model compliance plan, as the Company deemed
appropriate to the conduct of its business. The Company's Senior Vice President
of Operations serves as the Company's Compliance Officer and reports directly to
the Chief Executive Officer and the Board of Directors. One key aspect of the
corporate integrity agreements and the model compliance plan is an emphasis on
the responsibilities of laboratories to notify physicians that Medicare covers
only medically necessary services. Although these requirements focus on
chemistry tests, especially routine tests, rather than on anatomic pathology
services or the non-automated tests which make up the majority of the Company's
business, they could affect physician test ordering habits more broadly. The
Company is unable to predict whether or to what extent these developments may
have an impact on the utilization of the Company's services.

     Antitrust Laws. In connection with state corporate practice of medicine
laws discussed above, the physician practices with which the Company is
affiliated in some states are organized as separate legal entities. As such, the
physician practice entities may be deemed to be persons separate both from the
Company and from each other under the antitrust laws and, accordingly, subject
to a wide range of federal and state laws that prohibit anti-competitive conduct
among separate legal entities. In addition, the Company also is seeking to
acquire or affiliate with established and reputable practices in its target
geographic markets. The Company believes it is in compliance with federal and
state antitrust laws and intends to comply with any state and federal laws that
may affect its development of integrated health care delivery networks. There
can be no assurance, however, that a review of the Company's business by courts
or regulatory authorities would not adversely affect the operations of the
Company and it's affiliated physician groups.

     HIPAA Criminal Penalties. HIPAA created criminal provisions, which impose
criminal penalties for fraud against any health care benefit program for theft
or embezzlement involving health care and for false statements in connection
with the payment of any health benefits. HIPAA also provided broad prosecutorial
subpoena authority and authorized property forfeiture upon conviction of a
federal health care offense. Significantly, the HIPAA provisions apply not only
to federal programs, but also to private health benefit programs as well. HIPAA
also broadened the authority of the OIG to exclude participants from federal
health care programs. Because of the uncertainties as to how the HIPAA
provisions will be enforced, the Company currently is unable to predict their
ultimate impact on the Company. If the government were to seek any substantial
penalties against the Company, this could have a material adverse effect on the
Company.

     Licensing. CLIA extends federal oversight to virtually all clinical
laboratories by requiring that laboratories be certified by the government. Many
laboratories must also meet governmental quality and personnel standards,
undergo proficiency testing and be subject to biennial inspection. Rather than
focusing on location, size or type of laboratory, this extended oversight is
based on the complexity of the test performed by the laboratory. The CLIA
quality standards regulations divide all tests into three categories (waived,
moderate complexity and high complexity) and establish varying requirements
depending upon the complexity of the test performed. The Company's outpatient
laboratories are licensed by Health and Human Services ("HHS") under CLIA to
perform high complexity testing. Generally, the HHS regulations require
laboratories that perform high complexity or moderate complexity tests to
implement systems that ensure the accurate performance and reporting of tests
results, establish quality control systems, have proficiency testing conducted
by approved agencies and have biennial inspections. The Company is also subject
to state regulation. CLIA provides that a state may adopt more stringent
regulations than federal law. For example, some state laws require that
laboratory personnel meet certain qualifications, specify certain quality
controls, maintain certain records and undergo proficiency testing.

                                       15
<PAGE>

     Other Regulations. In addition, the Company is subject to licensing and
regulation under federal, state and local laws relating to the collecting,
storing, handling and disposal of medical specimens, infectious and hazardous
waste and radioactive materials as well as the safety and health of laboratory
employees. All Company laboratories are operated in a manner designed to comply
with applicable federal and state laws and regulations relating to the
generation, storage, treatment and disposal of all laboratory specimens and
other biohazardous waste. The Company utilizes licensed vendors for the disposal
of such specimen and waste.

     In addition to its comprehensive regulation of safety in the workplace, the
federal Occupational Safety and Health Administration ("OSHA") has established
extensive requirements relating to workplace safety for healthcare employees,
including clinical laboratories, whose workers may be exposed to blood-borne
pathogens, such as HIV and the hepatitis B virus. These regulations require work
practice controls, protective clothing and equipment, training, medical follow-
up, vaccinations and other measures designed to minimize exposure to, and
transmission of, blood-borne pathogens. Regulations of the Department of
Transportation, the Public Health Services and the U.S. Postal Service also
apply to the transportation of laboratory specimens.

     HIPAA Medical Information Confidentiality, Security and Financial
Transaction Requirements. Among other things, HIPAA established several
requirements regarding the confidentiality, security and transmission of medical
information. HCFA has published proposed and final regulations that explain the
application of such requirements. The final confidentiality regulations have
been reopened for comment by the Bush Administration. The security regulations
are proposed and the transaction standards are final. It is unclear whether
these requirements will result in additional financial obligations for the
Company or pose increased regulatory risk.

Insurance

     The Company's business entails an inherent risk of claims of physician
professional liability for acts or omissions of its physicians and laboratory
personnel. The Company and its physicians periodically become involved as
defendants in medical malpractice lawsuits, some of which are currently ongoing,
and are subject to the attendant risk of substantial damage awards. The Company
has consolidated its physician professional liability insurance coverages with
the St. Paul Fire and Marine Insurance Company, whereby each of the pathologists
is insured under claims-made policies with primary limits of $1.0 million per
occurrence and $5.0 million in the annual aggregate, and share with the Company
in surplus coverage of up to $20.0 million in the aggregate. The Company's
coverage until July 1999 was with Steadfast Insurance Company (Zurich-American).
The policy also provides "prior acts" coverage for each of the physicians with
respect to the practices prior to their acquisition by the Company. Further, the
Company has provided reserves for incurred but not reported claims in connection
with its claims-made policies. The terms of the purchase agreements relating to
each practice acquisition contain certain limited rights of indemnification from
the sellers of the practices. The Company also maintains property and umbrella
liability insurance policies. While the Company believes it has adequate
professional liability insurance coverage for itself, and physicians, there can
be no assurance that a future claim or claims will not be successful and, if
successful, will not exceed the limits of available insurance coverage or that
such coverage will continue to be available at acceptable costs or on favorable
terms. In addition, the Company's insurance does not cover all potential
liabilities arising from governmental fines and penalties, indemnification
agreements and certain other uninsurable losses. A malpractice claim asserted
against the Company, an Owned or Managed Practice, or an affiliated physician
could, in the event of an adverse outcome exceeding limits of available
insurance coverage, have a material adverse effect on the Company's financial
condition and results of operations.

Competition

     The markets for the services provided by the Company, its Practices and
pathologists are in the provision of physician practice management services to
pathology practices and the provision of pathology and cytology diagnostic
services. Competition may result from other anatomic pathology practices,
companies in other healthcare industry segments, such as other hospital-based
specialties, national clinical laboratories, large physician group practices or
pathology physician practice management companies that may enter the Company's
markets, some of which may have greater financial and other resources than the
Company.

     With respect to physician practice management services, the Company
believes that the principal competitive factors are the Company's pathologist
leadership, and single specialty focus, sales and marketing expertise, its
administrative support

                                       16
<PAGE>

capabilities (billing, collections, accounting and financial reporting,
information systems, and human resources). The Company believes that the
infrastructure it is building provides a competitive advantage in such markets.
To date, the Company has not experienced significant competition in its primary
market areas. However, it does compete with several other companies, and such
competition can reasonably be expected to increase. In addition, companies in
other healthcare segments, such as hospitals, national clinical laboratories,
third party payors, and HMO's, many of which have greater financial resources
may become competition in the employment and managers of pathology practices.
The Company competes for acquisitions and affiliations on the basis of its
reputation, management experience, status and resources as a public company and
its single focus on anatomic pathology. There can be no assurance that the
Company will be able to compete effectively or that additional competitors will
not enter the Company's markets or make it more difficult for the Company to
acquire or affiliate with practices on favorable terms.

Service Marks

     The Company has registered the service marks "AmeriPath", "CAD - The Center
for Advanced Diagnostics" and the AmeriPath logo with the United States Patent
and Trademark Office.

Employees

     At December 31, 2000, the Company's Owned and Managed Practices employ
2,325 people, including 425 physicians. In addition to physicians, the employees
of the Company and the Managed Practices include 676 laboratory technicians, 151
couriers and 1,073 billing, marketing, transcription and administrative staff,
of which 98 personnel are located at the Company's executive offices. None of
the Company's employees or prospective employees is subject to collective
bargaining agreements.

ITEM 2.   PROPERTIES

     The Company leases its executive offices located in Riviera Beach, Florida
(approximately 12,000 square feet) and its centralized billing office in Fort
Lauderdale, Florida (approximately 13,000 square feet) and the Company and its
Managed Practices lease 65 other facilities: 20 in Florida, two in Alabama,
three in Kentucky, four in Ohio, eight in Texas, six in Pennsylvania, five in
Tennessee, four in Mississippi, two in Missouri, two in New York, two in
Oklahoma, two in North Carolina and one in Indiana, Colorado, California,
Massachusetts, and Wisconsin. These facilities are used for laboratory
operations, administrative and billing and collections operations and storage
space. The 67 facilities encompass an aggregate of approximately 300,000 square
feet, have an aggregate annual rent of approximately $5.1 million and have lease
terms expiring from 2001 to 2009. As laboratory leases are scheduled to expire,
the Company will consider whether to extend or renegotiate the existing lease or
move the facility to another location within the defined geographic area of the
Practice.

ITEM 3.   LEGAL PROCEEDINGS

     During the ordinary course of business, the Company has become and may in
the future become subject to pending and threatened legal actions and
proceedings. The Company may have liability with respect to its employees and
its pathologists as well as with respect to hospital employees who are under the
supervision of the hospital based pathologists. The majority of the pending
legal proceedings involve claims of medical malpractice. Most of these relate to
cytology services. These claims are generally covered by insurance. Based upon
investigations conducted to date, the Company believes the outcome of such
pending legal actions and proceedings, individually or in the aggregate, will
not have a material adverse effect on the Company's financial condition, results
of operations or liquidity. If the Company is ultimately found liable under
these medical malpractice claims, there can be no assurance that the Company's
medical malpractice insurance coverage will be adequate to cover any such
liability. The Company may also, from time to time, be involved with legal
actions related to the acquisition of and affiliation with physician practices,
the prior conduct of such practices, or the employment (and restriction on
competition of) physicians. There can be no assurance any costs or liabilities
for which the Company becomes responsible in connection with such claims or
actions will not be material or will not exceed the limitations of any
applicable indemnification provisions or the financial resources of the
indemnifying parties.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matter was submitted to a vote of security holders during the fiscal
quarter ended December 31, 2000.

                                       17
<PAGE>

                                    PART II

ITEM 5.   MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
          MATTERS

     AmeriPath's Common Stock, is listed for quotation on the NASDAQ National
Market System under the symbol "PATH". The following table sets forth, the high
and low closing sales prices for the Common Stock, as reported on the NASDAQ
National Market System during the Company's fiscal quarters indicated below. The
Common Stock first began trading on October 21, 1997. As of March 16, 2001,
there were approximately 300 shareholders of record and over 3,000 beneficial
owners based upon broker searches conducted for solicitation purposes.

<TABLE>
<CAPTION>
                                               High           Low
                                             ---------      --------
<S>                                          <C>            <C>
First Quarter 1999                           $ 12 9/16      $  7 1/2
Second Quarter 1999                          $   9 5/8      $  7 1/2
Third Quarter 1999                           $  10 1/8      $ 8 3/32
Fourth Quarter 1999                          $      10      $ 7 7/16
First Quarter 2000                           $ 9 15/16      $      8
Second Quarter 2000                          $  9 7/16      $  7 1/4
Third Quarter 2000                           $  14 5/8      $  8 3/8
Fourth Quarter 2000                          $26 15/16      $13 9/16
</TABLE>

     The Company has not during the past two fiscal years and presently has no
plans to pay any dividends on its Common Stock. All earnings will be retained
for the foreseeable future to support operations and to finance the growth and
development of the Company's business. The payment of future cash dividends, if
any, will be at the discretion of the Board of Directors of the Company and will
depend upon, among other things, future earnings, capital requirements, the
Company's financial condition, any applicable restrictions under credit
agreements existing from time to time and on such other factors as the Board of
Directors may consider relevant. The terms of the Company's existing credit
facility prohibit the payment of dividends without the lenders' consent.

     Recent Sales of Unregistered Securities

     Recent Sales of Unregistered Securities - In connection with two of the
acquisitions completed during the fourth quarter of 2000, the Company issued the
following shares of Common Stock pursuant to Rule 144A promulgated under the
Securities Act of 1933, as amended:

<TABLE>
<CAPTION>
                                                                                            Effective             Shares
                                                                     Location                  Date               Issued
                                                                 -----------------      -----------------       ----------
     <S>                                                         <C>                    <C>                     <C>
     (1)  Pathology Consultants of America, Inc. d/b/a           Nashville, TN          November 30, 2000       2,576,305
          Inform DX
     (2)  Diagnostic Pathology Management Services, Inc.         Oklahoma City, OK      December 1, 2000           81,620
          and Diagnostic Pathology Services, Inc. and
          Tulsa Diagnostics, Inc. and Anatomic Pathology         Tulsa, OK              December 1, 2000           76,334
          Services, Inc.
</TABLE>

ITEM 6.   SELECTED FINANCIAL DATA

     The selected Consolidated Financial Data set forth below have been derived
from the Company's consolidated financial statements and should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations," the Consolidated Financial Statements and the
related Notes thereto and the other financial information included elsewhere in
this Annual Report on Form 10-K. All information for the prior years has been
restated to reflect the acquisition of Inform DX, which has been accounted for
as a pooling of interest.

                                       18
<PAGE>

CONSOLIDATED STATEMENT OF OPERATIONS DATA:
YEAR ENDED DECEMBER 31,
(in thousands, except per share data)

<TABLE>
<CAPTION>
                                                        1996       1997       1998       1999       2000
                                                      --------   --------   --------   --------   --------
<S>                                                   <C>        <C>        <C>        <C>        <C>
Net revenue                                           $ 42,558   $108,406   $193,316   $257,432   $330,094
                                                      --------   --------   --------   --------   --------
Operating costs:
  Cost of services                                      20,106     48,833     87,700    122,685    163,390
  Selling, general and administrative
     expense                                             8,483     21,386     36,709     47,159     58,411
  Provision for doubtful accounts                        3,576     10,892     18,698     25,289     34,040
  Amortization expense                                   1,958      5,763      9,615     12,827     16,172
  Merger-related costs (1)                                  --         --         --         --      6,209
  Asset impairment and related charges (2)                  --         --         --         --      9,562
  Loss on cessation of clinical lab operations (3)         910         --         --         --         --
                                                      --------   --------   --------   --------   --------
     Total                                              35,033     86,874    152,722    207,960    287,784
                                                      --------   --------   --------   --------   --------
Income from operations                                   7,525     21,532     40,594     49,472     42,310
Interest expense                                        (3,540)    (8,772)    (8,560)    (9,573)   (15,376)
Nonrecurring charge (4)                                     --     (1,289)        --         --         --
Other (expense) income, net                               (431)       (96)       150        286        226
                                                      --------   --------   --------   --------   --------
Income before income taxes                               3,554     11,375     32,184     40,185     27,160
Provision for income taxes                               1,528      5,522     13,941     17,474     14,068
                                                      --------   --------   --------   --------   --------
Net income                                               2,026      5,853     18,243     22,711     13,092
Induced conversion and accretion
  of redeemable preferred stock                             --         --        (75)      (131)    (1,604)
                                                      --------   --------   --------   --------   --------
Net income available to common shareholders           $  2,026   $  5,853   $ 18,168   $ 22,580   $ 11,488
                                                      ========   ========   ========   ========   ========

Earnings per share data (5)

  Basic earnings per common share                        $0.53      $0.66      $0.87      $1.03      $0.49
                                                      ========   ========   ========   ========   ========
  Diluted earnings per common share                      $0.22      $0.42      $0.84      $1.00      $0.47
                                                      ========   ========   ========   ========   ========
  Basic weighted average shares outstanding              3,115      8,880     20,911     21,984     23,473
                                                      ========   ========   ========   ========   ========
  Diluted weighted average shares outstanding            9,014     13,986     21,610     22,516     24,237
                                                      ========   ========   ========   ========   ========
</TABLE>

CONSOLIDATED BALANCE SHEET DATA:
DECEMBER 31,
(in thousands)

<TABLE>
<CAPTION>
                                                          1996       1997       1998       1999       2000
                                                      --------   --------   --------   --------   --------
<S>                                                   <C>        <C>        <C>        <C>        <C>
Cash and cash equivalents                             $  2,262   $  2,030   $  6,383   $  1,713   $  2,418
Total assets                                           157,854    272,532    390,413    478,896    562,166
Long-term debt, including current
  portion                                               97,239     77,630    123,917    168,614    201,747
Redeemable equity securities (6)                        18,427         --     15,373     15,504         --
Stockholders' equity                                    12,693    145,603    180,378    206,214    249,665
</TABLE>
- ----------------------
(1)  In connection with the Inform DX merger, the Company recorded $6.2 million
     of costs related to transaction fees, change in control payments and
     various exit costs associated with the consolidation of certain operations.

(2)  In connection with Quest Diagnostics termination of its contract in South
     Florida, the loss of a contract with a hospital in South Florida and the
     loss of three hospital contracts and an ambulatory care facility contract
     in Cleveland, Ohio, the Company recorded non-recurring charges totaling
     $9.6 million. The charges were based on the

                                       19
<PAGE>

     remaining projected cash flows from these contracts in which the Company
     determined that the intangible assets that were recorded from acquisitions
     in these areas had been impaired.

(3)  In connection with the closing of a clinical operation in May 1996, the
     Company recorded a nonrecurring charge to operations aggregating $910,000,
     which included severance payments, write-downs of property, equipment and
     other assets to estimated realizable values, and the write-off of the
     unamortized balances of intangible assets associated with the clinical
     operations.

(4)  In the year ended December 31, 1997, the Company recorded a nonrecurring
     charge of $1.3 million, primarily attributable to professional fees and
     printing costs, as a result of the postponement of the Company's planned
     initial public offering of Common Stock.

(5)  Earnings per share for all periods are computed and presented in accordance
     with Statement of Financial Accounting Standards ("SFAS") No. 128,
     "Earnings Per Share". Basic earnings per share excludes dilution and is
     computed by dividing income attributable to common stockholders by the
     weighted-average number of common shares outstanding for the period.
     Diluted earnings per share reflects the potential dilution that could occur
     if securities or other contracts to issue common stock were exercised or
     converted into common stock or resulted in the issuance of common stock
     that then shared in the earnings of the entity. Prior reported earnings per
     share data have been restated in accordance with SFAS No. 128.

(6)  For December 31, 1996 amounts include Convertible Preferred Stock of $5.2
     million plus accrued and unpaid dividends and $12.2 million of Redeemable
     Common Stock. For December 31, 1998 and 1999 amounts included Convertible
     Preferred Stock of $15.4 million and $15.5 million, respectively.

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

     The following discussion of the Company's results of operations and
financial condition should be read together with the consolidated financial
statements and other financial information included elsewhere in this Report.

General

     AmeriPath operates in two operating segments, Managed and Owned Practices,
as the largest physician and laboratory company focused on providing anatomic
pathology, cancer diagnostic, genomics, and healthcare information services. The
Company operates as a large group practice of pathologists in both hospital
inpatient laboratories and outpatient independent laboratories.

     The pathologists provide diagnostic anatomic pathology and related
histologic services with particular emphasis on dermatopathology (study of
diseases of the skin), hematopathology (study of diseases of the blood), and
cytopathology (study of abnormalities of the cells), as well as surgical
pathology (diagnostic services in connection with surgical procedures).

     Outpatient pathology services are performed in licensed freestanding,
independent pathology laboratories owned and operated by the Company. Services
performed are billed to patients, Medicare, Medicaid, other third party payors,
national clinical laboratories and attending physicians primarily on a fee-for-
service basis, which cover both the professional and technical components of
such services.

     Inpatient pathology services are performed under exclusive contractual
arrangements with hospitals. Net revenue for inpatient pathology services is
dependent in large part on the level of inpatient admissions and outpatient
surgeries performed at the hospitals. Such arrangements typically provide that a
pathologist will provide diagnostic pathology services for the hospital's staff
physicians and serve as the Medical Director of the hospital's laboratories with
responsibility for the clinical laboratory and histology departments, as well as
the hospital's blood banking and microbiology services.

     Achieving growth through acquisitions is one of the Company's principal
business strategies. The following table depicts the Company's growth through
acquisition activity. The table includes the acquisition of Inform DX in 2000,
but does not separately include any practices acquired by Inform DX before being
acquired by AmeriPath.

                                       20
<PAGE>

<TABLE>
<CAPTION>
                                                  Year Ended December 31,
                                             --------------------------------
                                             1996   1997   1998   1999   2000
                                             ----   ----   ----   ----   ----
     <S>                                     <C>    <C>    <C>    <C>    <C>
     Number of practices acquired              11      5     15     10      8
     Pathologists added                        79     45     93     71    128
     Outpatient laboratories added             10      3      5      8     13
     Hospital contracts added                  47     28     47     39     63
</TABLE>

     At December 31, 2000, the Company and its Managed Practices operated in 21
states, with 425 pathologists providing services in 224 hospitals and 42
outpatient laboratories. The Company focuses on developing regional networks,
such as in the state of Florida, and expanding the practices through its
internal marketing efforts. The Company is revisiting its acquisition strategy,
particularly its pace of acquisitions, and will focus on fold-in acquisitions
that will densify its operations in strategically targeted markets and larger
pedestal acquisitions.

Results of Operations

     The following table sets forth, for the periods indicated, certain
consolidated financial data as a percentage of net revenue.

<TABLE>
<CAPTION>
PERCENTAGE OF NET REVENUE                                                       Year Ended December 31,
                                                                           ---------------------------------
                                                                            1998          1999         2000
                                                                           ------        ------       ------
<S>                                                                        <C>           <C>          <C>
Net revenue                                                                100.0%        100.0%       100.0%
Operating costs:
  Cost of services                                                          45.3          47.7         49.5
  Selling, general and administrative expense                               19.0          18.3         17.7
  Provision for doubtful accounts                                            9.7           9.8         10.3
  Amortization expense                                                       5.0           5.0          4.9
  Merger-related charges                                                      --            --          1.9
  Asset impairment and related charges                                        --            --          2.9
                                                                           -----         -----        -----
       Total operating costs and expenses                                   79.0          80.8         87.2
                                                                           -----         -----        -----

Income from operations                                                      21.0          19.2         12.8
Interest expense and other income                                           (4.4)         (3.6)        (4.6)
                                                                           -----         -----        -----

Income before income taxes                                                  16.6          15.6          8.2
Provision for income taxes                                                   7.2           6.8          4.2
                                                                           -----         -----        -----

Net income                                                                   9.4           8.8          4.0
Induced conversion and accretion of redeemable preferred stock                --            --          0.5
                                                                           -----         -----        -----
Net income attributable to common stockholders                               9.4%          8.8%         3.5%
                                                                           =====         =====        =====
</TABLE>

     The Company completed the acquisition of eight Practices in 2000, ten
Practices in 1999 and 15 Practices in 1998, the results of which are included in
the Company's operating results from the date of acquisition. Changes in
operations between years were primarily due to these acquisitions. The
acquisition of Inform DX was accounted for as a pooling of interest and
therefore all prior year amounts have been restated to reflect the combined
historical operations of Inform DX and AmeriPath.

     Net Revenues

     AmeriPath derives its net revenue from the operations of the Owned and
Managed Practices. Net revenue was comprised of net patient service revenue from
our Owned Practices and net management service revenue from our Managed
Practices.

                                       21
<PAGE>

     Net Patient Revenues. The majority of services furnished by AmeriPath's
pathologists are anatomic pathology diagnostic services. Medicare reimbursement
for these services represented approximately 22%, 20% and 19% of AmeriPath's
cash collections in 1998, 1999 and 2000, respectively. The Company typically
bills government programs (principally Medicare and Medicaid), indemnity
insurance companies, managed care organizations, national clinical laboratories,
physicians and patients. Net revenue differs from amounts billed for services
due to:

 .  Medicare and Medicaid reimbursements are limited to annually established
   rates;
 .  payments from managed care organizations limited to discounted fee-for-
   service rates;
 .  negotiated reimbursement rates with other third party payors;
 .  rates negotiated under sub-contracts with national clinical laboratories for
   the provision of anatomic pathology services; and
 .  other discounts and allowances.

     In recent years, there has been a shift away from traditional indemnity
insurance plans to managed care as employers and other payors move their
participants into lower cost plans. AmeriPath benefits more from patients
covered by Medicare and traditional indemnity insurance than managed care
organizations and national clinical laboratories, which contract directly under
capitated agreements with managed care organizations to provide clinical as well
as anatomic pathology services. The Company also contracts with national
clinical laboratories and is attempting to increase the number of such contracts
to increase test volume. Since the majority of the AmeriPath's operating costs
- -- principally the compensation of physicians and non-physician technical
personnel -- are relatively fixed, increases in volume, whether from indemnity
or non-indemnity plans, enhance AmeriPath's profitability. Historically, net
patient service revenue from capitated contracts has represented an
insignificant amount of total net patient service revenue.

     Virtually all of AmeriPath's net patient service revenue is derived from
the Practices' charging for services on a fee-for-service basis. Accordingly,
the Company assumes the financial risk related to collection, including
potential uncollectability of accounts, long collection cycles for accounts
receivable and delays in reimbursement by third party payors, such as
governmental programs, private insurance plans and managed care organizations.
Increases in write-offs of doubtful accounts, delays in receiving payments or
potential retroactive adjustments and penalties resulting from audits by payors
may require AmeriPath to borrow funds to meet its current obligations or may
otherwise have a material adverse effect on AmeriPath's financial condition and
results of operations. In addition to services billed on a fee-for-service
basis, the hospital-based pathologists have supervision and oversight
responsibility for their roles as Medical Directors of the hospitals' clinical,
microbiology and blood banking operations. For this role, AmeriPath bills non-
Medicare patients according to a fee schedule for what is referred to as
clinical professional component charges. For Medicare patients, the pathologist
is typically paid a director's fee or a "Part A" fee by the hospital. For the
year ended December 31, 2000, the Company recorded approximately $9.3 million of
revenue from director fees. For the year 2001, the Company estimates that
director fees will be approximately $10.5 million. Hospitals and third-party
payors are continuing to increase pressure to reduce the payment of these
clinical component billing charges and "Part A" fees, and in the future
AmeriPath may sustain substantial decreases in these payments.

     Medicare calculates and reimburses fees for all physician services ("Part
B" fees), including anatomic pathology services, based on a methodology known as
the resource-based relative value system ("RBRVS"), which Medicare began phasing
in since 1992 and had fully implemented by 1997. Overall, anatomic pathology
reimbursement rates declined during the fee schedule phase-in period, despite an
increase in payment rates for certain pathology services performed by AmeriPath.

     The Medicare Part B fee schedule payment for each service is determined by
multiplying the total relative value units ("RVUs") established for the service
by a Geographic Practice Cost Index ("GPCI"). The sum of this value is
multiplied by a statutory conversion factor. The number of RVUs assigned to each
service is in turn calculated by adding three separate components: work RVU
(intensity of work), practice expense RVU (expense related to performing the
service) and malpractice RVU (malpractice costs associated with the service).

     BBA added coverage for an annual screening pap smear for Medicare
beneficiaries who are at high risk of developing cervical or vaginal cancer and
for beneficiaries of childbearing age effective January 1, 1998, as well as
coverage for annual prostate cancer screening, including a prostate-specific
antigen blood test, for beneficiaries over age 50, effective

                                       22
<PAGE>

January 1, 2000. Although most women of childbearing age and men under age 65
are not Medicare beneficiaries, the addition of Medicare coverage for these
tests could provide additional revenues for the Company. With the BBA, Congress
merged the three existing conversion factors into one for all types of services
provided resulting in a single conversion factor.

     In July 1999, HCFA announced several proposed rule changes, and issued a
final rule on November 2, 1999 that impacts payment for pathology services. The
changes include: (a) the implementation of resource-based malpractice relative
value units ("RVUs"), which should not significantly change reimbursement; and
(b) as noted above, the 1997 regulations required HCFA to develop a methodology
for resource-based practice expense RVUs for each physician service beginning in
1998. The Balanced Budget Act of 1997 provided for a four-year transition
period. HCFA has established, and is proposing, a new methodology for computing
resource-based practice expense that uses available practice expense data. In
the November 2, 1999 final rule, an interim solution was developed which created
a separate practice expense pool for all services with zero work RVUs. As
published in the final rule, certain reimbursement codes were removed from the
zero work RVU pool. The impact of these procedures from the zero work pool
varies by procedure and geographic region. The impact of the changes for
pathology revenue were estimated by HCFA to be 8%, however, the magnitude of the
impact that Medicare has on AmeriPath depends upon the mix of Medicare and non-
Medicare services. For those outpatient facilities that AmeriPath bills
globally, the average percentage increase is 16.6% for a common CPT code 88305.
On August 10, 2000, the Final Update to the 2000 Medicare Physician Fee Schedule
Database was published by HFCA. The changes included increases to various codes
including CPT code 88305. Increases vary by region and averaged 5.7%.

     In addition, HCFA announced that it will cease the direct payment by
Medicare for the technical component of inpatient physician pathology services
to an outside independent laboratory on the basis that it believes that the cost
of the technical component for inpatient services is already included in the
payment to hospitals under the hospital inpatient prospective payment system.
Implementation of this change was scheduled to commence January 1, 2001.
Congress, however, recently "grandfathered" certain existing hospital-lab
arrangements. The physician fee schedule conversion factor increased from $34.73
to $36.61 in 2000. HCFA has increased the physician fee schedule conversion
factor from $36.61 to $38.26 in 2001.

     Due to the implementation of the hospital outpatient prospective payment
system ("PPS"), effective as of January 1, 2001, independent pathology
laboratories providing services to hospital outpatients will no longer be able
to bill Medicare for the technical component ("TC") of those services. Rather,
they will need to bill the hospital for the TC. The hospital will be reimbursed
as part of the new Ambulatory Payment Classification ("APC") payment system.
This change will require new billing arrangements be made with the hospitals
which may result in an increase in the amount of time necessary for collections
and reduction in the amounts paid. The actual change in revenue has not been
determined due to current negotiations in progress with the hospitals. There can
be no assurance that these changes will not have an adverse effect on the
Company.

     As indicated above, a significant portion of AmeriPath's net patient
service revenue is from payments by government-sponsored health care programs,
principally Medicare and Medicaid, and is subject to audit and adjustments by
applicable regulatory agencies. Failure to comply with any of these laws or
regulations, the results of increased regulatory audits and adjustments, or
changes in the interpretation of the coding of services or the amounts payable
for services under these programs could have a material adverse effect on
AmeriPath's financial position and results of operations.

     The impact of legislative changes on AmeriPath's results of operations will
depend upon several factors, including the mix of inpatient and outpatient
pathology services, the amount of Medicare business, and changes in conversion
factors (budget neutrality adjustments) which are published in November of each
year. Management continuously monitors changes in legislation impacting
reimbursement.

     In prior years, AmeriPath has been able to mitigate the impact of
reductions in Medicare reimbursement rates for anatomic pathology services
through the achievement of economies of scale and the introduction of
alternative technologies that are not dependent upon reimbursement through the
RBRVS system. Despite any offsets, the recent substantial modifications to the
physician fee schedule, along with additional adjustments by Medicare, could
have an effect on the average unit reimbursement in the future. In addition,
other third-party payors could adjust their reimbursement based on changes to
the Medicare fee schedule. Any reductions made by other payors could have a
negative impact on the average unit reimbursement.

                                       23
<PAGE>

     Management Service Revenue. Net management service revenue is based on a
predetermined percentage of net operating income of the practices managed by the
Company plus reimbursement of certain practice expenses as defined in each
management service agreement. Management fees are recognized at the time the
physician group revenue is recorded by the physician group.

     The underlying calculation of net management service revenue is net
physician group revenue less amounts retained by the physician groups ("
Physician Group Retainage"). Net physician group revenue is equal to billed
charges reduced by provisions for bad debt and contractual adjustments.
Contractual adjustments represent the difference between amounts billed and
amounts reimbursable by commercial insurers and other third party payors
pursuant to their respective contracts with the physician group. The provision
for bad debt represents management's estimate of potential credit issues
associated with amounts due from patients, commercial insurers, and other third
party payors. Physician Group Retainage is the net physician group revenue less
practice expenses and management fee charged by the Company in accordance with
the terms of the service agreement. The following table illustrates the
computation of net management service revenue.

     Gross physician group revenue                     $ XXX
     Contractual adjustments and bad debt expense       (XXX)
                                                       -----
     Net physician group revenue                         XXX
     Less amounts retained by physician groups          (XXX)
                                                       -----
          Net management service revenue               $ XXX
                                                       =====

     Net revenue for the year 2000 increased by $72.7 million, or 28.2%, from
$257.4 million for 1999 to $330.1 million for 2000. During the fourth quarter,
management reviewed the collectibility of Inform DX's accounts receivable in
light of historical collections, aging of accounts receivable, AmeriPath's
reserve methods and policies, and billing and collection performance. In
addition, two of Inform DX's laboratories converted billing systems in the
fourth quarter of 1999. As the result of these conversions, the billings and
collections for 2000 were negatively impacted. Based on this review and
evaluation, during the fourth quarter AmeriPath recorded an additional estimated
allowance against accounts receivable of $5.2 million. Since the majority of
this allowance relates to the accounts receivable of the Managed Practices, as
discussed above, the additional allowance was recorded as a reduction of net
management service revenue.

     Without the $5.2 million adjustment to net revenue, 2000 net revenue would
have increased $77.9 million or 30% over the year ended 1999. Of the $77.9
million increase, $44.3 million resulted from the operations of practices
acquired during 1999 and 2000. Same practice net revenue for 2000 increased by
$33.6 million, or 14%, over the prior year. Of the same practice increase
AmeriPath estimates that approximately $6.8 million resulted from the increase
in Medicare reimbursement in 2000. The remaining $26.8 million resulted from a
combination of volume increases and price impacts of other payors. Same practice
outpatient net revenue increased $23.8 million, or 24%, same practice hospital
net revenue increased $6.5 million, or 5%, and management service revenue
increased $3.3 million, or 15%, compared to the same period of the prior year.
The expansion of the New York operation contributed approximately $4.2 million
to the same practice outpatient growth for the year 2000. Reference to same
practice means practices at which the Company provided services for the entire
period for which the amount is calculated and the entire prior comparable
period, including acquired hospital contracts, the New York Lab operations and
expanded ancillary testing services added to existing practices.

     During 2000, approximately $29.4 million, or 9%, of AmeriPath's revenue was
from contracts with national labs including Quest and LabCorp. This represents a
35% increase over the prior year revenue from national lab contracts of
approximately $21.7 million. Effective December 31, 2000, Quest terminated
AmeriPath's pathology contract in South Florida. In 2000, this contract
accounted for approximately $1.5 million of net patient service revenue. This
contract termination resulted in a $3.3 million asset impairment charge in the
fourth quarter of 2000. In addition, during the fourth quarter AmeriPath
discontinued its Quest work in San Antonio. Although the Company has had these
national lab contracts for a number of years, these types of decisions by Quest
and/or LabCorp to discontinue or redirect pathology services, at any or all of
its practices, could have a material adverse effect on AmeriPath's financial
position and results of operations.

     Approximately 13% of AmeriPath's net revenue comes from pathology contracts
with 27 HCA hospitals. Generally, these contracts and other hospital contracts
have remaining terms of less than five years and contain renewal provisions.
Some of the contracts also contain clauses that allow for termination by either
party with relatively short notice. HCA has been under government investigation
for some time and is evaluating its operating strategies; including the sale,
spin- off or closure of certain hospitals. During 1999, HCA closed one hospital
and sold another hospital where the Company provided

                                       24
<PAGE>

pathology services. The estimated net revenue from the loss of these contracts
was less than 1% of consolidated net patient revenue. Further closures and/or
sales of HCA hospitals could have a material adverse effect on the Company's
financial position and results of operations. Although the Company, through its
acquisitions, has had relationships with these and other hospitals for extended
periods of time, the termination of one or more of these contracts could have a
material adverse effect on the Company's financial position and results of
operations.

     Net revenue for 1999 increased by $64.1 million, or 33.2%, from $193.3
million for 1998 to $257.4 million for 1999. Of this increase, $55.5 million was
attributable to the acquisitions the Company completed during 1998 and 1999.
Same practice net revenue for 1999 increased by $8.6 million, or 5%. For 1999,
same practice hospital net revenue increased $2.7 million, or 3%, same practice
outpatient net revenue increased $3.8 million, or 5% and management service
revenue increased $2.1 million or 26% compared to 1998. During 1999, the Company
experienced a 1% Medicare reimbursement decrease, which was effective January 1,
1999. Reference to same practice means practices at which the Company provided
services for the entire period for which the amount is calculated and the entire
prior comparable period, including acquired hospital contracts and expanded
ancillary testing services added to existing practices.

     The percent of the Company's net revenue from outpatient and inpatient
pathology and management services is presented below. The type and mix of
business, outpatient, inpatient or management service, which changes as a result
of new acquisitions, may change the ratio of operating costs to net revenue,
specifically the provision for doubtful accounts, as noted in the sections that
follow.

<TABLE>
<CAPTION>
                                    Year Ended December 31,
                                   ------------------------
REVENUE TYPE                       1998      1999      2000
                                   ----      ----      ----
<S>                                <C>       <C>       <C>
Outpatient                          43%       39%       42%
Inpatient                           49%       51%       51%
Management service revenues          8%       10%        7%

</TABLE>

     Cost of Services

     Cost of services consists principally of the compensation and fringe
benefits of pathologists, licensed technicians and support personnel, laboratory
supplies, shipping and distribution costs and facility costs. Cost of services
for 2000 increased by $40.7 million, or 33.2%, from $122.7 million for 1999 to
$163.4 million for 2000. Cost of services, as a percentage of net revenues,
increased from 47.7% in 1999 to 49.5% in 2000. Gross margin decreased from
approximately 52.3% in 1999 to 50.5% in 2000. Excluding the impact of the
increased reimbursement from Medicare, the gross margin would have decreased to
approximately 49.5%. The increase in cost of services, and corresponding
reduction in gross margin, results primarily from higher pathologist and medical
technicians salaries and medical malpractice and health benefit costs. While we
attempt to mitigate the impact of these higher costs through productivity
increases, we expect to see continuing rising costs in these areas for 2001.

     Cost of services for 1999 increased by $35.0 million, or 39.9%, from $87.7
million for 1998 to $122.7 million for 1999. Cost of services, as a percentage
of net revenues, increased from 45.3% in 1998 to 47.7% in 1999. Gross margin
decreased from approximately 54.7% in 1998 to 52.3% in 1999. A portion of the
decline is related to the decrease in Medicare reimbursement rates. In addition,
the Company incurred expenses related to the start-up of a de novo outpatient
dermatopathology laboratory in New York. This facility commenced operations in
late July 1999. Excluding the results of operations for the New York start up,
the Company's gross margin would have been approximately 52.8% in 1999.

     Selling, General and Administrative Expense

     The cost of corporate support, sales and marketing, and billing and
collections comprise the majority of what is classified as selling, general and
administrative expense ("SG&A"). SG&A expense, as a percentage of net revenues
decreased from 18.3% in 1999 to 17.7% in 2000, as the Company imposed measures
to control the growth in these costs and continued to spread these costs over a
larger revenue base. An objective of the Company is to decrease these costs as a
percentage of net revenues, however, these costs, as a percentage of net
revenue, may increase as we continue to invest in marketing, information systems
and billing operations. For 2001, AmeriPath expects to make significant
investments in sales and marketing focused on

                                       25
<PAGE>

attaining double digit same practice revenue growth. Therefore the Company does
not expect any significant reduction in the ratio of SG&A to net revenue in
2001.

     SG&A expense for 1999 increased by $10.5 million, or 28.5%, from $36.7
million for 1998 to $47.2 million for 1999. A portion of the increase relates to
the acquisitions made during 1998 and 1999. The remaining increase was due to
increased staffing levels in marketing, billing, human resources and accounting
and costs incurred to expand the Company's administrative support infrastructure
and to upgrade information systems.

     Provision for Doubtful Accounts

     The provision for doubtful accounts, which relates to our Owned Practices,
increased by $8.8 million, or 34.6%, from $25.3 million for 1999 to $34.0
million for 2000. The dollar increase is primarily due to the increase in net
revenues and accounts receivable from the acquisitions completed during 1998 and
1999. The provision for doubtful accounts as a percentage of net revenues was
9.8% and 10.3% for 1999 and 2000, respectively. The increase in the percentage
of net revenue was primarily attributable to a shift in revenue mix from
management service to outpatient. Management service revenue has no associated
bad debt expense compared to outpatient that has a 4% to 6% ratio of bad debt to
revenue. The provision for doubtful accounts as a percentage of net revenue is
higher for inpatient (hospital) services than for outpatient or management
services due primarily to a larger concentration of indigent and private pay
patients, more difficulties gathering complete and accurate billing information,
and longer billing and collection cycles for inpatient services.

     The provision for doubtful accounts increased by $6.6 million, or 35.2%,
from $18.7 million for 1998, to $25.3 million for the same period in 1999. The
dollar increase is primarily due to the increase in net revenues and accounts
receivable from the acquisitions completed during 1998 and 1999. The provision
for doubtful accounts as a percentage of net revenues was 9.7% and 9.8% for the
year ended December 31, 1998 and 1999, respectively. The increase in the
percentage of net revenue was primarily attributable to an overall increase in
hospital-based revenues. Net revenue from hospital inpatient services increased
as a percentage of consolidated net revenue from 49% in 1998 to 51% in 1999. The
provision for doubtful accounts as a percentage of net revenue is higher for
inpatient (hospital) services than for outpatient services due primarily to a
larger concentration of indigent and private pay patients, more difficulties
gathering complete and accurate billing information, and longer billing and
collection cycles for inpatient services.

     Provision for estimated third-party payor settlements and adjustments are
estimated in the period the related services are rendered and adjusted in future
periods as final settlements are determined. The provision and the related
allowance are adjusted periodically, based upon an evaluation of historical
collection experience with specific payors for particular services, anticipated
collection levels with specific payors for new services, industry reimbursement
trends, and other relevant factors.

     Amortization Expense

     The Company's acquisitions completed since 1996 resulted in significant
increases in net identifiable intangible assets and goodwill. Net identifiable
intangible assets and goodwill, which include hospital contracts, physician
client lists, management service agreements and laboratory contracts acquired in
the acquisitions were approximately $389.8 million and $445.9 million at
December 31, 1999 and 2000, respectively, representing approximately 81.4% and
79.3%, respectively, of the Company's total assets. Net identifiable intangible
assets are recorded at fair value on the date of acquisition and are amortized
over periods ranging from 10 to 40 years, with a weighted average of 29.0 years
as of December 31, 2000. The Company amortizes goodwill on a straight-line basis
over periods ranging from 10 to 35 years, with a weighted average of 30.5 years
as of December 31, 2000. There can be no assurance that the Company will ever
realize the value of intangible assets. The Company continually evaluates
whether events or circumstances have occurred that may warrant revisions to the
carrying values of its goodwill and other identifiable intangible assets, or to
the estimated useful lives assigned to such assets. Any significant impairment
recorded on the carrying values of the Company's goodwill or other identifiable
intangible assets could have a material adverse effect on the Company's
consolidated financial position and results of operations. Such impairment would
be recorded as a charge to operating profit and reduction in intangible assets.
See the discussion of asset impairment charges below.

                                       26
<PAGE>

     Amortization expense increased by $3.4 million, or 26.1%, from $12.8
million for 1999 to $16.2 million for 2000. This increase is attributable to the
amortization of goodwill and net identifiable intangible assets from the
acquisitions the Company completed during 2000 and a full year of amortization
from the acquisitions the Company completed during 1999. In addition, during
2000 AmeriPath made contingent note payments totaling $26.6 million. These
contingent note payments are recorded as goodwill and therefore create
additional amortization expense. Amortization expense is expected to increase on
an annual basis as a result of identifiable intangible assets and goodwill
arising from future acquisitions and any contingent payments required to be made
pursuant to the acquisitions completed since 1996. Amortization expense, as a
percentage of net revenues, was 5.0% and 4.9% in 1999 and 2000, respectively.

     Amortization expense increased by $3.2 million, or 33.4%, from $9.6 million
for 1998 to $12.8 million for 1999. This increase is attributable to the
amortization of goodwill and net identifiable intangible assets from the
acquisitions the Company completed during 1999 and a full year of amortization
from the acquisitions the Company completed during 1998. In addition, during
1999 AmeriPath made contingent note payments totaling $17.4 million. These
contingent note payments are recorded as goodwill and therefore create
additional amortization expense. Amortization expense, as a percentage of net
revenues, was 5.0% in both 1998 and 1999.

     Merger-related Charges and Asset Impairment and Related Charges (Special
Charges)

     During 2000, AmeriPath recorded special charges totaling $21.0 million, for
merger-related charges, an allowance against uncollectible accounts receivable
related to AmeriPath's acquisition of Inform DX and certain asset impairment
charges. AmeriPath expects to record an additional $7.3 million of merger-
related charges in the first quarter of 2001.

The following summarizes these special charges by category for 2000 and first
quarter estimates for 2001 (in millions).

<TABLE>
<CAPTION>
                                                                                     2000      Q1 2001
                                                                                    -----      -------
     <S>                                                                            <C>        <C>
     Merger-related charges (see below)                                             $ 6.2         $7.3
     Allowance against accounts receivable (see previous discussion)                  5.2           --
     Asset impairment and related charges (see below)                                 9.6           --
                                                                                    -----         ----
                        Total special charges                                       $21.0         $7.3
                                                                                    =====         ====
</TABLE>

     Based on the above, the special charges for 2000 and the first quarter of
2001 are estimated to be $28.3 million. Of the total $28.3 million in special
charges, approximately $14.7 million are non-cash charges and the remaining
$13.6 million are cash charges. As of December 31, 2000, the Company has paid
$4.3 million of the cash charges. The remaining cash charges of $9.3 million
will be paid out $7.2 million, $1.6 million and $500,000 in 2001, 2002 and 2003,
respectively.

     During 2000, the Company had discussed these special charges with its bank
syndicate and received amendments that allow $22.9 million of these charges to
be excluded from its covenant computations. The $5.4 million of charges in
excess of the $22.9 million allowed resulted from the formalization of the
Inform DX integration plans, and are expected to result in further synergies.
These additional charges could have caused the Company to be in technical
default of one or more of its covenants under its credit facility at the end of
the first quarter of 2001. Effective March 29, 2001, the Company and the lenders
executed an amendment to the credit facility which excludes an additional $5.4
million, or $28.3 million in total, of charges from its covenant calculations.
In addition, the amendment (i) increased the Company's borrowing rate by 37.5
basis points; (ii) requires the Company to use a minimum of 30% equity for all
acquisitions; (iii) requires the Company to use no more than 20% of
consideration for acquisitions in the form of contingent notes and; (iv)
requires lender approval of all acquisitions with a purchase price greater than
$10 million. The Company will also be required to pay an amendment fee of up to
30 basis points to those lenders which consent to the amendment. The maximum
amount of the amendment fee would be $700,000.

     The merger-related charges of $6.2 million in 2000 relate to AmeriPath's
acquisition of Inform DX and include transaction costs, change in control
payments and costs related to the closing of the Inform DX corporate office in
Nashville. Of the $6.2 million, approximately $4.3 million related to
transaction costs and $1.9 million related to employee-related costs of closing
the Nashville facility. AmeriPath expects to record an additional $7.3 million
of merger-related charges in the first quarter of 2001 related primarily to the
consolidation or closing of the overlapping operations of Inform DX in New York
and

                                       27
<PAGE>

Pennsylvania. Based on its current plans, AmeriPath expects to complete the
closing of the Nashville operations by the end of the second quarter and the
integration of the New York and Pennsylvania operations by the end of the third
quarter of 2001. The restructuring of the combined operations of AmeriPath and
Inform DX should result in potential annual operating synergies of $4.5 to $5.5
million. Since the majority of the positive effect of such savings on operations
will not begin to be realized until the second half of 2001, AmeriPath expects
the acquisition of Inform DX to be nominally dilutive for the first six months
and accretive for the year 2001.

     As more fully described in Note 4 to the consolidated financial statements,
during the second quarter of 2000 AmeriPath recorded a pre-tax non-cash charge
of approximately $4.7 million and related cash charges of approximately $545,000
in connection with the impairment of intangible assets at an acquired practice
in Cleveland, Ohio. During the fourth quarter of 2000, AmeriPath recorded a pre-
tax non-cash charge of approximately $4.3 million related to the impairment of
certain intangible assets. $3.3 million of the fourth quarter charge relates to
Quest Diagnostics' termination of its contract with AmeriPath in South Florida,
effective December 31, 2000. The net patient service revenue in 2000 related to
this contract was approximately $1.5 million. Although the Company has
aggressively marketed and retained a portion of this operating income,
accounting rules require a charge to be taken, as there is no longer a contract.
In addition to the $3.3 million, during the fourth quarter, a hospital in South
Florida where AmeriPath had the pathology contract, requested proposals for its
pathology services, and AmeriPath was unsuccessful in retaining this contract.
Based upon the remaining projected cash flow from this hospital network, the
Company determined that the intangible assets were impaired and recorded a
pre-tax non-cash charge of approximately $1.0 million. For 2000, this contract
accounted for approximately $800,000 of net revenue.

     Interest Expense

     Interest expense increased by $5.8 million, or 60.6%, from $9.6 million for
1999 to $15.4 million for 2000. The increase was due in part to an increase in
the average outstanding balance under the credit facility. In 2000, the average
indebtedness under the credit facility was $175.5 million, compared to $140.0
million outstanding in 1999. In addition, the effective interest rate on the
credit facility increased from 6.8% to 8.7% primarily due to the periodic
increases in interest rates during the year by the Federal Reserve Board and the
expiration of the interest rate swap in October 2000. The interest rate swap was
renewed in October 2000 at approximately 7.65% plus the credit spread (currently
2.0%) compared to 5% plus credit spread for the expired swap, therefore
increasing interest expense.

     Interest expense increased by $1.0 million, or 11.8%, from $8.6 million for
1998, to $9.6 million for 1999. The increase was due in part to an increase in
the average indebtedness outstanding under the credit facility. In 1999, average
indebtedness outstanding was $140.0 million, compared to $101.3 million
outstanding in 1998. This increase in average indebtedness was offset by a
reduction in the effective interest rate from 8.0% to 6.8% primarily due to the
interest rate swap that was in effect for all of 1999. This interest rate swap
was entered into in October 1998.

     Income Tax Rate

     The effective income tax rate was approximately 43.3%, 43.5% and 51.8% for
1998, 1999 and 2000, respectively. Generally, the effective tax rate is higher
than AmeriPath's statutory rates primarily due to the non-deductibility of the
goodwill amortization and section 481(a) adjustments (cash to accrual) related
to the Company's acquisitions. In addition, for 2000 AmeriPath had non-
deductible asset impairment charges and merger-related charges, which further
increased the effective tax rate. The effective tax rate for 2000, excluding
these items would have been approximately 41.8%.

Liquidity and Capital Resources

     At December 31, 2000, AmeriPath had working capital of $40.8 million, a
decrease of $1.7 million from the working capital of $42.5 million at December
31, 1999. The decrease in working capital was primarily due to an increase in
net accounts receivable of $13.2 million, offset by an increase in current
liabilities related to merger-related charges associated with the acquisition of
Inform DX of $2.9 million and accounts payable and accrued expenses of $14.4
million. The majority of these changes resulted from AmeriPath's acquisitions
completed during 2000. AmeriPath manages its cash balances against amounts
available under its revolving credit facility. Cash balances, for the most part,
are managed on a zero-balance basis and all available cash flows are used to
reduce outstanding debt in order to minimize interest cost.

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<PAGE>

     For the years ended December 31, 1999 and 2000, cash provided by operations
was $32.7 million and $31.9 million, respectively. Excluding pooling
merger-related charges paid for Inform DX of $3.8 million, cash flow from
operations would have been S35.7 million. For the year ended December 31, 2000,
cash flow from operations and borrowings under the Company's credit facility
were used primarily: (i) for capital expenditures aggregating $9.2 million; (ii)
to fund the $24.9 million cash portion of the acquisitions the Company; (iii)
for payments on AmeriPath's contingent notes of $26.6 million; (iv) to pay $2.4
million of other merger-related charges, mainly Inform DX; (v) for the $1.0
million investment in GCI and (vi) to make $800,000 in principal payments on
long-term debt.

     During 2000, the Company acquired nine anatomic pathology practices,
including the two practices acquired by Inform DX. The total consideration paid
by the Company in connection with these acquisitions included cash of $32.5
million and approximately 1,532,000 shares of common stock (aggregate value of
$12.2 million based upon amounts recorded on the Company's consolidated
financial statements). Generally, the shares of common stock, excluding the two
practices acquired by Inform DX, are restricted as to transfer, which
restrictions lapse over three to five years, based solely on the passage of
time.

     The Company issued approximately 2,600,000 shares of common stock
(1,219,000 shares of which are included above) in exchange for all the
outstanding common stock of Inform DX. In addition, the Company assumed certain
obligations to issue shares of common stock pursuant to outstanding Inform DX
stock option plans.

     At December 31, 2000, the Company had $32.8 million available under its
credit facility with a syndicate of banks led by Fleet National Bank (formerly
BankBoston, N.A.). The amended facility provides for borrowings of up to $230
million in the form of a revolving loan that may be used for working capital
purposes and to fund acquisitions to the extent not otherwise used for working
capital purposes. As of December 31, 2000, $197.2 million was outstanding under
the revolving loan with an annual effective interest rate of 9.6%. See previous
discussion regarding the recent amendment to the credit facility.

     In May 2000, the Company entered into three interest rate swaps
transactions with an effective date of October 5, 2000, variable maturity dates,
and a combined notional amount of $105 million. See Item 7A. - Quantitative and
Qualitative Disclosures About Market Risk for details on these new swap
agreements. These interest rate swap transactions involve the exchange of
floating for fixed rate interest payments over the life of the agreement without
the exchange of the underlying principal amounts. The differential to be paid or
received is accrued and is recognized as an adjustment to interest expense.
These agreements are indexed to 30 day LIBOR. The Company uses derivative
financial instruments to reduce interest rate volatility and associated risks
arising from the floating rate structure of its credit facility and are not held
or issued for trading purposes. The Company is required by the terms of its
credit facility to keep some form of interest rate protection in place. At
December 31, 2000, the Company believes that it is in compliance with the
covenants of the credit facility. See Note 13 to the consolidated financial
statements.

     In connection with the Company's acquisitions, the Company generally agrees
to pay a minimum purchase price and to pay additional purchase price
consideration to the sellers of the Practices in proportion to their respective
ownership interest in each Practice. The additional payments are generally
contingent upon the achievement of stipulated levels of operating earnings by
each of the Practices over periods of three to five years from the date of the
acquisition as set forth in the respective agreements, and are not contingent on
the continued employment of the sellers of the Practices. In certain cases, the
payments are contingent upon other factors such as the retention of certain
hospital contracts for periods ranging from three to five years. The amount of
the payments cannot be determined until the achievement of the operating
earnings levels or other factors during the terms of the respective agreements.
If the maximum specified levels of operating earnings for each Practice are
achieved, the Company would make aggregate maximum payments, including principal
and interest, of approximately $198.4 million over the next three to five years.
At the mid-point level, the aggregate principal and interest would be
approximately $89.7 million over the next three to five years. A lesser amount
or no payments at all would be made if the stipulated levels of operating
earnings specified in each agreement are not met. Through December 31, 2000, the
Company made contingent note and interest payments aggregating $53.4 million,
which amounts, represent 63% of the maximum amount payable. See Note 3 to the
consolidated financial statements.

     Historically, the Company's capital expenditures have been primarily for
laboratory equipment, IT equipment and leasehold improvements. Total capital
expenditures were $4.4 million, $8.7 million and $9.2 million in 1998, 1999 and
2000, respectively. During 2000, capital expenditures included approximately
$2.9 million related to IT, $2.4 million for laboratory equipment, $2.6 million
for leasehold improvements and $1.3 million for office equipment and furniture
and fixtures. During

                                       29
<PAGE>

1999, capital expenditures included approximately $1.6 million related to
information systems, $2.0 million for laboratory equipment, $1.7 million for
leasehold improvements, $1.5 million for the construction of the New York lab
and $1.2 million for the new billing system at the consolidated billing office
in Fort Lauderdale. During 1998, capital expenditures included approximately
$2.3 million related to information systems, $1.6 million for laboratory
equipment and $258,000 for leasehold improvements.

     Planned capital expenditures for 2001 are estimated to be $5.5 million to
$7.0 million, with priority being given to the new billing system at the
consolidated billing office in Fort Lauderdale and enhancements in financial and
lab information systems. Historically, the Company has funded its capital
expenditures with cash flows from operations. For the years ended December 31,
1998, 1999 and 2000, capital expenditures were approximately 2.3%, 3.4.% and
2.8% of net revenue, respectively. The Company is consolidating and integrating
its financial information, billing and collection systems, which may result in
an increase in capital expenditures as a percentage of net revenue. The Company
believes, however, that such information systems enhancements will result in
cost savings that may enable the Company to continue to fund its capital
expenditures with cash flows from operations.

     The Company expects to continue to use its credit facility to fund
acquisitions and for working capital. The Company anticipates that funds
generated by operations and funds available under the credit facility will be
sufficient to meet working capital requirements and contingent note obligations,
and to finance capital expenditures over the next 12 months. Further, in the
event payments under the contingent notes issued in connection with acquisitions
become due, the Company believes that the incremental cash generated from
operations would exceed the cash required to satisfy the Company's payment, if
any, of the contingent obligations in any one year period. Such payments, if
any, will result in a corresponding increase in goodwill and the related amount
of amortization thereof in periods following the payment. Funds generated from
operations and funds available under the credit facility may not be sufficient
to implement the Company's longer-term growth strategy. The Company may be
required to seek additional financing through additional increases in the credit
facility, to negotiate credit facilities with other banks or institutions or to
seek additional capital through private placements or public offerings of equity
or debt securities. No assurances can be given that the Company will be able to
extend or increase the existing credit facility, secure additional bank
borrowings or complete additional debt or equity financings on terms favorable
to the Company or at all.

Qualification of Forward Looking Statements

     This Annual Report on Form 10-K contains forward-looking statements made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Statements contained anywhere in this Annual Report on Form
10-K that are not limited to historical information are considered forward-
looking statements within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934, including, without
limitation, statements regarding the Company's expectations, beliefs,
intentions, plans or strategies regarding the future. These forward-looking
statements are based largely on the Company's expectations which are subject to
a number of known and unknown risks, uncertainties and other factors discussed
in this report and in other documents filed by the Company with the Securities
and Exchange Commission, which may cause actual results to be materially
different from those anticipated, expressed or implied by the forward-looking
statements. All forward-looking statements included in this document are based
on information available to the Company on the date hereof, and the Company
assumes no obligation to update any such forward-looking statements to reflect
future events or circumstances. Forward-looking statements are sometimes
indicated by words such as "may," "should," "believe," "expect," "anticipate"
and similar expressions.

     In addition to the risks and uncertainties identified elsewhere herein and
in other documents filed by the Company with the Securities and Exchange
Commission, the following factors should be carefully considered when evaluating
the Company's business and future prospects: general economic conditions;
competition and changes in competitive factors; the extent of success of the
Company's operating initiatives and growth strategies (including without
limitation, the Company's continuing efforts to (i) achieve continuing
improvements in performance of its current operations, by reason of various
synergies, marketing efforts, revenue growth, cost savings or otherwise, (ii)
transition into becoming a fully integrated healthcare diagnostic information
provider, including the Company's efforts to develop, and the Company's
investment in, new products, services, technologies and related alliances, such
as the alliance with Genomics Collaborative, Inc., (iii) acquire or develop
additional pathology practices (as further described below), and (iv) develop
and expand its managed care and national clinical lab contracts); federal and
state healthcare regulation (and compliance); reimbursement rates under
government-sponsored and third party healthcare programs and the payments
received under such programs; changes in coding; changes in technology;
dependence upon pathologists and contracts; the ability to attract, motivate,
and retain pathologists; labor and technology costs; marketing and promotional
efforts;

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<PAGE>

the availability of pathology practices in appropriate locations that the
Company is able to acquire on suitable terms or develop; the successful
completion and integration of acquisitions (and achievement of planned or
expected synergies); access to sufficient amounts of capital on satisfactory
terms; and tax laws. In addition, the Company's strategy to penetrate and
develop new markets involves a number of risks and challenges and there can be
no assurance that the healthcare regulations of the new states in which the
Company enters and other factors will not have a material adverse effect on the
Company. The factors which may influence the Company's success in each targeted
market in connection with this strategy include: the selection of appropriate
qualified practices; negotiation, execution and consummation of definitive
acquisition, affiliation, management and/or employment agreements; the economic
stability of each targeted market; compliance with state, local and federal
healthcare and/or other laws and regulations in each targeted market (including
health, safety, waste disposal and zoning laws); compliance with applicable
licensing approval procedures; restrictions under labor and employment laws,
especially non-competition covenants. Past performance is not necessarily
indicative of future results. Certain of the risks, uncertainties and other
factors discussed or noted above are more fully described elsewhere in this
Report, including under the caption -"Risk Factors" below.

Risk Factors

     You should carefully consider each of the following risks and all of the
other information set forth in this report on Form 10-K. The risks and
uncertainties described below are not the only ones we face. Additional risks
and uncertainties not presently known to us or that we currently believe to be
immaterial may also adversely affect our business.

     If any of the following risks actually occur, our business prospects,
financial condition and results of operations could be materially adversely
affected and the trading price of our common stock could decline. In any such
case, you could lose all or part of your investment in our company.

Our business could be harmed by future interpretation or implementation of state
laws regarding prohibitions on the corporate practice of medicine.

     We acquire or affiliate with physician practices located in many states
across the country. However, the laws of many states prohibit business
corporations, including AmeriPath and its subsidiaries, from owning corporations
that employ physicians, or from exercising control over the medical judgments or
decisions of physicians. These laws and their interpretations vary from state to
state and are enforced by both the courts and regulatory authorities, each with
broad discretion. The manner in which we operate each practice is determined
primarily by the corporate practice of medicine restrictions of the State in
which the practice is located and other applicable regulations.

     We believe that we are currently in material compliance with the corporate
practice of medicine laws in each of the states in which we operate. We cannot
assure you that regulatory authorities or other parties will not assert that we
are engaged in the unauthorized corporate practice of medicine. If such a claim
were successfully asserted in any jurisdiction, we could be subject to civil and
criminal penalties under such jurisdiction's laws and could be required to
restructure our contractual and other arrangements. Alternatively, some of our
existing contracts could be found to be illegal and unenforceable. In addition,
expansion of our operations to other "corporate practice" states may require
structural and organizational modification to the form of relationship that we
currently have with physicians, affiliated practices and/or hospitals. Such
results or the inability to successfully restructure contractual arrangements
could have a material adverse effect on our business, financial condition and
results of operations.

We could be hurt by future interpretation or implementation of federal anti-
kickback laws.

     The federal anti-kickback law and regulations prohibit any knowing and
willful offer, payment, solicitation and receipt of any form of remuneration,
either directly or indirectly, in return for, or to induce the referral of an
individual for a service for which payment may be made by Medicare and Medicaid
or certain other federal health care programs, or the purchasing, leasing,
ordering or arranging for, or recommending the purchase, lease or order of, any
service or item for which payment may be made by Medicare, Medicaid or certain
other federal health care programs. Violations of federal anti-kickback law are
punishable by monetary fines, civil and criminal penalties and exclusion from
participation in Medicare, Medicaid and other federal health care programs.
Several states have similar laws.

     The federal government has published regulations that provide "safe-
harbors" that protect business transactions that meet enumerated requirements
from prosecution under the federal anti-kickback law. The failure to meet the
requirements of

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<PAGE>

a safe harbor does not necessarily mean that a transaction violates the anti-
kickback law. While arrangements that we enter into with physicians and third
parties may not satisfy all requirements under applicable safe harbors, we
believe our operations are in material compliance with applicable Medicare and
fraud and abuse laws, including the anti-kickback law. There is a risk however,
that the federal government might investigate arrangements which do not satisfy
the safe harbors. If our arrangements with physicians and third parties were
found to be illegal, we would be subject to civil and criminal penalties,
including exclusion from the participation in government payor programs, which
could materially adversely affect our business, financial condition and results
of operations.

     The Department of Health and Human Services Office of the Inspector General
issues advisory opinions that provide advice on whether proposed business
arrangements violate the anti-kickback statute. In Advisory Opinion 99-13, the
OIG opined that when prices for laboratory services for non-governmental
patients are discounted below Medicare reimbursable rate, the anti-kickback
statute may be implicated. The OIG found prices discounted below the laboratory
supplier's costs to be particularly problematic. In the same opinion, OIG
suggests that a laboratory may be excluded from federal health care programs if
it charges Medicare or Medicaid amounts substantially in excess of discounted
charges to the physician. In the OIG's opinion, charges are likely excessive if
the profit margin for Medicare business exceeds profit margin for non-federally
reimbursed business.

     The OIG also has addressed physician practice management arrangements in an
advisory opinion. In Advisory Opinion 98-4, the OIG found that management fees
based on a percentage of practice revenues may violate the anti-kickback
statute. Although these advisory opinions only apply to the parties who request
them, in the event that we our found to have arrangements that are inconsistent
with the OIG's opinions, the OIG might take the position that the arrangements
violate the anti-kickback law. Any such finding could have a material adverse
impact on us.

Our business could be harmed by future interpretation or implementation of the
federal Stark Law and other state and federal anti-referral laws.

     We are also subject to federal and state statutes and regulations banning
payments for referral of patients and referrals by physicians to health care
providers with whom the physicians have a financial relationship. The federal
Stark Law applies to Medicare and Medicaid and prohibits a physician from
referring patients for certain services, including laboratory services, to an
entity with which a physician has a financial relationship. Financial
relationship includes both investment interests in an entity and compensation
arrangements with an entity. If an arrangement is covered by the Stark Law, all
of the requirements of the Stark Law exception must be satisfied. Many states
also have laws that are similar to the Stark Law. These statutes and regulations
generally apply to services reimbursed by both governmental and private payors.
Violations of these laws may result in prohibition of payment for services
rendered, loss of licenses as well as fines and criminal penalties. In addition,
violation of the Stark Law may result in exclusion from Medicare and Medicaid.
State statutes and regulations affecting the referral of patients to health care
providers range from statutes and regulations that are substantially the same as
the federal laws and the safe harbor regulations to a requirement that
physicians or other health care professionals disclose to patients any financial
relationship the physicians or health care professionals have with a health care
provider that is being recommended to the patients. These laws and regulations
vary significantly from state to state, are often vague and, in many cases, have
not been interpreted by courts or regulatory agencies. Adverse judicial or
administrative interpretations of any of these laws could have a material
adverse effect on our business, financial condition and results of operations.
In addition, expansion of our operations to new jurisdictions, or new
interpretations of laws in existing jurisdictions, could require structural and
organizational modifications of our relationships with physicians to comply with
that jurisdiction's laws. Such structural and organizational modifications could
have a material adverse effect on our business, financial condition and results
of operations.

     We have financial relationships with our physicians, as defined by the
federal Stark Law, in the form of compensation arrangements, ownership of our
shares, contingent promissory notes issued by us in connection with
acquisitions, or a combination of the above. We believe that such existing
compensation arrangements are structured to comply with an applicable Stark Law
exception. We also believe that the ownership of our shares by physicians should
fall within the publicly traded stock exception to the Stark Law's definition of
financial relationship. However, certain physician-owned shares do have transfer
restrictions and, as a result, the government could take the position that all
of the requirements of this exception are not met. The contingent notes held by
some physicians do not meet an exception to the Stark Law's definition of
financial relationship. In either case, however, we believe that our current
operations comply with the Stark law because physicians affiliated with us
ordinarily do not make referrals and in any event have been instructed, and are
believed

                                       32
<PAGE>

to be following such instructions, not to make referrals to us. To the extent
physicians affiliated with us may make a referral to us and a financial
relationship exists between us and the referring physician through either the
ownership of our shares or contingent notes, the government might take the
position that the arrangement does not comply with the federal Stark Law. Any
such finding may have a material adverse impact on our business, financial
conditions or results from operations.

We could be hurt by future interpretation or implementation of state and federal
anti-trust laws.

     In connection with the corporate practice of medicine laws, the physician
practices with which we are affiliated in some states are organized as separate
legal entities. As such, the physician practice entities may be deemed to be
persons separate both from us and from each other under the antitrust laws and,
accordingly, subject to a wide range of laws that prohibit anti-competitive
conduct among separate legal entities. In addition, we are seeking to acquire or
affiliate with established and reputable practices in our target geographic
markets. We believe that we are in compliance with these laws and intend to
comply with any state and federal laws that may affect our development of
integrated health care delivery networks. However, we cannot assure you that a
review of our business by courts or regulatory authorities would not adversely
affect our business, financial condition or results from operations.

Our business could be harmed by future interpretation or implementation of the
Health Care Insurance Portability and Accountability Act

     The Health Care Insurance Portability and Accountability Act, or HIPAA,
created criminal provisions, which impose criminal penalties for fraud against
any health care benefit program for theft or embezzlement involving health care
and for false statements in connection with the payment of any health benefits.
HIPAA also provided broad prosecutorial subpoena authority and authorized
property forfeiture upon conviction of a federal health care offense.
Significantly, the HIPAA provisions apply not only to federal programs, but also
to private health benefit programs as well. HIPAA also broadened the authority
of the OIG to exclude participants from federal health care programs. Because of
the uncertainties as to how the HIPAA provisions will be enforced, we are
currently unable to predict their ultimate impact on us. Although we are unaware
of any current violations of HIPAA, the government may in the future seek
penalties against us for violations of HIPAA, which could have a material
adverse effect on business, financial condition or results from operations.

We charge our clients on a fee-for-service basis, so we incur financial risk
related to collections as well as potentially long collection cycles when
seeking reimbursement from third party payors.

     Substantially all of our net revenues are derived from our practices'
charging for services on a fee-for-service basis. Accordingly, we assume the
financial risk related to collection, including the potential uncollectability
of accounts, long collection cycles for accounts receivable and delays attendant
to reimbursement by third party payors, such as governmental programs, private
insurance plans and managed care organizations. Increases in write-offs of
doubtful accounts, delays in receiving payments or potential retroactive
adjustments and penalties resulting from audits by payors may require us to
borrow funds to meet our current obligations or may otherwise have a material
adverse effect on our business, financial condition and results of operations.

We rely upon reimbursement from government programs for a significant portion of
our revenues, and if reimbursement rates from government programs decline, it
could have a material adverse effect on our business.

     We derive approximately 20% of our collections from payments made by
government sponsored health care programs (principally Medicare and Medicaid).
These programs are subject to substantial regulation by federal and state
governments. Any change in reimbursement regulations, policies, practices,
interpretations or statutes that places limitations on reimbursement amounts, or
changes in reimbursement coding, or practices could materially and adversely
affect our business, financial condition and results of operations. Increasing
budgetary pressures at both the federal and state level and concerns over
escalating costs of health care have led, and may continue to lead, to
significant reductions in health care reimbursements. State concerns over the
growth in Medicaid also could result in payment reductions. Although
governmental payment reductions have not materially affected us in the past, it
is possible that such changes in the future could have a material adverse effect
on our business, financial condition and results of operations. In addition,
Medicare, Medicaid and other government sponsored health care programs are
increasingly shifting to some form of managed care. Some states have recently
enacted legislation to require that all Medicaid patients be converted to
managed care organizations, and similar legislation may be enacted in other
states, which could result in reduced payments to us for such patients. In
addition, a state-

                                       33
<PAGE>

legislated shift in a Medicaid plan to managed care could cause the loss of
some, or all, Medicaid business for us in that state if we were not selected as
a participating provider. Additionally, funds received under all health care
reimbursement programs are subject to audit with respect to the proper billing
for physician services and, accordingly, retroactive adjustments of revenue from
these programs could occur. We expect that there will continue to be proposals
to reduce or limit Medicare and Medicaid reimbursements.

There has been an increasing number of state and federal investigations of
hospitals and hospital laboratories, which may increase the likelihood of
investigations of our business practices to the extent that we have
relationships with the hospitals being investigated.

     Significant media and public attention has been focused on the health care
industry due to ongoing federal and state investigations reportedly related to
certain referral and billing practices, laboratory and home health care services
and physician ownership and joint ventures involving hospitals. Most notably,
HCA is under investigation with respect to such practices. We operate
laboratories on behalf of and have numerous contractual agreements with
hospitals, including 27 pathology service contracts with HCA hospitals as of
December 31, 2000. The government's ongoing investigation of HCA could result in
a governmental investigation of one or more of our operations that have
arrangements with HCA. In addition, the OIG and the Department of Justice have
initiated hospital laboratory billing review projects in certain states and are
expected to extend such projects to additional states, including states in which
we operate hospital laboratories. These projects increase the likelihood of
governmental investigations of laboratories owned and operated by us. Although
we monitor our billing practices and hospital arrangements for compliance with
prevailing industry practices under applicable laws, such laws are complex and
constantly evolving and we cannot assure you that governmental investigators
will not take positions that are inconsistent with our practices or industry
practices. The government's investigations of entities with which we contract
may have other effects which could materially and adversely affect us, including
termination or amendment of one or more of our contracts or the sale of
hospitals potentially disrupting the performance of services under such
contracts. In addition, in certain instances indemnity insurers and other non-
governmental payors have sought repayment from providers, including
laboratories, for alleged overpayments.

There has been a heightened scrutiny of Medicare and Medicaid billing practices
in recent years, which may increase our possibility of being subject to costly
investigations.

     Payors periodically reevaluate the services they reimburse. In some cases,
government payors such as Medicare also may seek to recoup payments previously
made for services determined not to be reimbursable. Any such action by payors
would have an adverse affect on our revenues and earnings.

     Moreover, the federal government has become more aggressive in examining
laboratory billing and seeking repayments and penalties as the result of
improper billing for services (e.g., the billing codes used), regardless of
whether carriers had furnished clear guidance on this subject. The primary focus
of this initiative has been on hospital laboratories and on routine clinical
chemistry tests which comprise only a small portion of our revenues. Although
the scope of this initiative could expand, it is not possible to predict whether
or in what direction the expansion might occur. We believe that our practices
are proper and do not include any allegedly improper practices now being
examined. However, we cannot assure you that the government will not broaden its
initiative to focus on the type of services furnished by us or, if this were to
happen, on how much money, if any, we might be required to repay.

     Furthermore, HIPAA and Operation Restore Trust have strengthened the powers
of the OIG and increased the funding for Medicare and Medicaid audits and
investigations. As a result, the OIG is currently expanding the scope of its
health care audits and investigations. Federal and state audits and inspections,
whether on a scheduled or unannounced basis, are conducted from time to time at
our facilities. If a negative finding is made as a result of such an
investigation, we could be required to change coding practices or repay amounts
paid for incorrect practices either of which could have a material adverse
effect on our business, financial condition and results from operations.

We are dependent on hospital contracts for a significant portion of our
revenues, which are short term and can easily be terminated.

     Our hospital contracts typically have terms of one to five years from their
date of execution and automatically renew for additional terms of one year
unless otherwise terminated by either party. The contracts generally provide
that the hospital

                                       34
<PAGE>

may terminate the agreement prior to the expiration of the initial or any
renewal term. Loss of any particular hospital contract would not only result in
a loss of net revenue to us, but also a loss of outpatient net revenue that may
be derived from the relationship with a hospital and its medical staff.
Continuing consolidation in the hospital industry may result in fewer hospitals
or fewer laboratories as hospitals move to combine their operations. As of
December 31, 2000, our practices had contracts with 224 hospitals, of which the
majority are exclusive, and 27 of which are executed with HCA. We cannot assure
you that such contracts with hospitals will not be terminated or that they will
be renewed in the future.

If we are unable to make acquisitions in the future, our rate of growth will
slow.

     Much of our historical growth has come from acquisitions, and we expect to
continue to pursue growth through the acquisition and development of
laboratories. However, we may be unable to continue to identify and complete
suitable acquisitions at prices we are willing to pay or to obtain the necessary
financing. In addition, since we are a bigger company, the amount that acquired
businesses contribute to our revenue and profits will likely be smaller on a
percentage basis. We also compete with other companies to identify and complete
suitable acquisitions. We expect this competition to intensify, making it more
difficult to acquire suitable companies on favorable terms. Further, the
businesses we acquire may not perform well enough to justify our investment. If
we are unable to make additional acquisitions on suitable terms, we may not meet
our growth expectations.

Our future growth will depend on our ability to secure adequate capital
resources and to effectively integrate newly acquired practices.

     In addition to acquisitions of and affiliations with practices, we intend
to continue to grow through internal expansion. We derive our net revenue from
the net revenue of our practices. Our growth strategy requires: (i) capital
investment; (ii) compliance with present or future laws and regulations that may
differ from those to which we are currently subject; (iii) further development
of our corporate management and operational, financial and accounting resources
to accommodate and manage growth; and (iv) the ability to expand our physician
and employee base and to train, motivate and manage employees. Failure to meet
these requirements could limit our growth potential and may have a material
adverse effect on our business, financial condition and results of operations.
Although we are taking steps to manage our growth, we cannot assure you that we
will be able to do so efficiently or that our growth rate will continue in the
future.

     Our expansion into new markets will require us to maintain and establish
payor and customer relationships and to convert the patient tracking and
financial reporting systems of new practices to our systems. Significant delays
or expenses with regard to this process could have a material adverse effect on
the integration of additional practices and on our financial condition and
results of operations. We cannot assure you that we will be able to maintain or
establish payor and customer relationships, convert management information
systems or integrate new practices into our combined network.

     The integration of additional practices typically requires the
implementation and centralization of purchasing, accounting, human resources,
management information systems, cash management and other systems, which may be
difficult, costly and time-consuming. Our operating results in fiscal quarters
immediately following a new practice affiliation may be adversely affected while
we attempt to complete the integration process. We may encounter significant
unanticipated costs or other problems associated with the future integration of
practices into our combined network of affiliated practices. We cannot assure
you that future affiliations will not have a material adverse effect on our
business, financial condition and results of operations, particularly during the
period immediately following completion of such affiliations.

We may inherit significant liabilities from practices that we acquire.

     We perform due diligence investigations with respect to potential
liabilities of acquired and affiliated practices and obtain indemnification with
respect to liabilities from the sellers of such practices. Nevertheless,
undiscovered claims may subsequently arise and we cannot assure you that any
liabilities for which we become responsible will not be material or will not
exceed either the limitations of any applicable indemnification provisions or
the financial resources of the indemnifying parties. Furthermore, through our
corporate compliance program, we regularly review each practice's compliance
with federal and state health care laws and regulations and revise, as
appropriate, the operations, policies and procedures of our practices to conform
with our policies and procedures and applicable law. While we believe that the
operations of our practices prior to their acquisition were generally in
compliance with such laws and regulations, we cannot assure you that the prior
operations of such practices were in full compliance with such laws, as such
laws may ultimately be interpreted. Moreover, although we

                                       35
<PAGE>

maintain an active compliance program, it is possible that the government might
challenge some of our current practices as not being in full compliance with
such laws. A violation of such laws by a practice could result in civil and
criminal penalties, exclusion of the physician, the practice or us from
participation in Medicare and Medicaid programs and/or loss of a physician's
license to practice medicine.

We have significant contingent liabilities payable to many of the sellers of
practices that we recently acquired.

     In connection with our practice acquisitions, we typically agree to pay to
sellers of the practices additional consideration in the form of debt
obligations, payment of which is contingent upon the practice achieving certain
specified profitability criteria over periods ranging from three to five years
from the date of acquisition. The principal amount and accrued interest of the
contingent amount to be paid cannot be determined until the contingency periods
terminate and achievement of the profitability criteria is determined. As of
December 31, 2000, if the maximum criteria for the contingency payments with
respect to all prior acquisitions were achieved, we would be obligated to make
payments, including principal and interest, of approximately $198.4 million over
the next three to five years. Lesser amounts of cash would be paid if the
maximum financial criteria are not met. Although we believe that we will be able
to make such cash payments from internally generated funds or proceeds of future
borrowings, we cannot assure you that we will be able to do so. Payments of
these contingent amounts will affect our earnings per share and may cause
volatility in the market price of our common stock. We expect to continue to use
contingent notes as partial consideration for acquisitions and affiliations.
While we believe that the contingent notes do not violate federal or state
"anti-kickback" or "self-referral" statutes, we cannot assure you that that such
arrangements will not be challenged by regulatory authorities seeking to enforce
such laws.

We have booked a significant amount of intangible assets, which may never be
realized.

     Our acquisitions have resulted in significant increases in net identifiable
intangible assets and goodwill. Net identifiable intangible assets, which
include hospital contracts, physician client lists, a management service
agreement and laboratory contracts acquired in acquisitions were approximately
$268.6 million at December 31, 2000, representing approximately 47.8% of our
total assets. Net identifiable intangible assets are recorded at fair value on
the date of acquisition and are being amortized over periods ranging from 10 to
40 years. Goodwill, which relates to the excess of cost over the fair value of
net assets of businesses acquired, was approximately $177.3 million at December
31, 2000, representing approximately 31.5% of our total assets. We amortize
goodwill on a straight-line basis over periods ranging from 15 to 35 years. On
an ongoing basis, we make an evaluation, based on undiscounted cash flows, to
determine whether events and circumstances indicate that all or a portion of the
carrying value of intangible assets may no longer be recoverable, in which case
an additional charge to earnings may be necessary. We cannot assure you that we
will ever realize the value of our intangible assets. Any future determination
requiring the write off of a significant portion of unamortized intangible
assets could have a material adverse effect on our business, financial condition
and results of operations.

Our business is highly dependent on the recruitment and retention of qualified
pathologists.

     Our business is dependent upon recruiting and retaining pathologists,
particularly those with subspecialties, such as dermatopathology. While our
practices have been able to recruit (principally through practice acquisitions)
and retain pathologists, we cannot assure you that we or our practices will be
able to continue to do so successfully or on terms similar to our current
arrangements. The relationship between the pathologists and their respective
local medical communities is important to the operation and continued
profitability of each practice. In the event that a significant number of
pathologists terminate their relationships with our practices or become unable
or unwilling to continue their employment, or in the event non-compete
agreements with a number of physicians were terminated or determined to be
invalid or unenforceable, our business, financial condition and results from
operation could be materially and adversely affected.

Proposals to reform the health care industry may have a material adverse effect
on our business.

     Federal and state governments have recently focused significant attention
on health care reform. It is not possible to predict which, if any, proposal
will be adopted. We cannot assure you that the health care regulatory
environment will not change so as to restrict the existing operations of, impose
additional requirements on or limit our expansion. Costs of compliance with
changes in government regulations may not be subject to recovery through price
increases. Some of the proposals under consideration, or others which may be
introduced, could, if adopted, have a material adverse effect on our business,
financial condition and results of operations.

                                       36
<PAGE>

Competition from other providers of pathology services may adversely affect our
business.

     Our services include the provision of physician practice management
services to pathology practices and the provision of pathology and cytology
diagnostic services. Competition may result from other anatomic pathology
practices, companies in other health care industry segments, such as other
hospital-based specialties, national clinical laboratories, large physician
group practices or pathology physician practice management companies that may
enter our markets, some of which may have greater financial and other resources
than us.

     We compete with several companies, and such competition can reasonably be
expected to increase. In addition, companies in other health care segments, such
as hospitals, national clinical laboratories, third party payors, and health
maintenance organizations, many of which have greater financial resources than
us, may become competition in the employment and management of pathology
practices. We compete for acquisitions and affiliations on the basis of our
reputation, management experience, status and resources as a public company and
our focus on anatomic pathology. We cannot assure you that we will be able to
compete effectively or that additional competitors will not enter our markets or
make it more difficult for us to acquire or affiliate with practices on
favorable terms.

We may be subject to significant professional liability claims and we cannot
assure you that our insurance coverage limits will be sufficient to cover such
claims.

     Our business entails an inherent risk of claims of physician professional
liability for acts or omissions of our physicians and laboratory personnel. We
and our physicians periodically become involved as defendants in medical
malpractice lawsuits, some of which are currently ongoing, and are subject to
the attendant risk of substantial damage awards. We have consolidated our
physician professional liability insurance coverages with the St. Paul Fire and
Marine Insurance Company, whereby each of the pathologists is insured under
claims-made policies with primary limits of $1.0 million per occurrence and $5.0
million in the annual aggregate, and share with us in surplus coverage of up to
$20.0 million in the aggregate. The policy also provides "prior acts" coverage
for each of our physicians with respect to our practices prior to their
acquisition by us. Further, we have provided reserves for incurred but not
reported claims in connection with our claims-made policies. The terms of the
purchase agreements relating to each practice acquisition contain certain
limited rights of indemnification from the sellers of the practices. We also
maintain property and umbrella liability insurance policies. While we believe
that we have adequate professional liability insurance coverage, we can give no
assurances that a future claim or claims will not be successful and, if
successful, will not exceed the limits of available insurance coverage or that
such coverage will continue to be available at acceptable costs or on favorable
terms. In addition, our insurance does not cover all potential liabilities
arising from governmental fines and penalties, indemnification agreements and
certain other uninsurable losses. A malpractice claim asserted against us, a
management subsidiary, a practice subsidiary, an affiliated practice or an
affiliated physician could, in the event of an adverse outcome exceeding limits
of available insurance coverage, have a material adverse effect on our business,
financial condition and results of operations.

The continued growth of managed care may have a material adverse effect on our
business.

     The number of individuals covered under managed care contracts or other
similar arrangements has grown over the past several years and may continue to
grow in the future. Entities providing managed care coverage have been
successful in reducing payments for medical services in numerous ways, including
entering into arrangements under which payments to a service provider are
capitated, limiting testing to specified procedures, denying payment for
specified services unless prior authorization for such services has been
obtained and refusing to increase fees for specified services. The continued
growth of the managed care industry and its continued success in reducing
payments to medical service providers could have a material adverse effect on
our business, financial condition and results of operation.

We could be damaged by the loss of our key personnel.

     Our success is dependent upon the efforts and abilities of our key
management personnel, particularly James C. New, our Chairman and Chief
Executive Officer, Brian C. Carr, our President, Gregory A. Marsh, our Vice
President and Chief Financial Officer, Alan Levin, M.D., our Chief Operating
Officer and Dennis M. Smith, Jr., M.D., our Senior Vice President and Medical
Director. The loss of service of any of these persons could have a material
adverse effect on our business, financial condition and results of operations.

                                       37
<PAGE>

Because of the complex nature of our billing and reimbursement arrangements, we
may be at a greater risk of Internal Revenue Service Examinations.

     The Internal Revenue Service, or IRS, conducted an examination of our
federal income tax returns for the tax years ended December 31, 1996 and 1997
and concluded that no changes to the tax reported needed to be made. Although we
believe that we are in compliance with all applicable IRS rules and regulations,
if the IRS should determine that we are not in compliance in any other years, it
could have a material adverse effect on the our financial position and results
of operations.

Our stock price is volatile and the value of your investment may decrease, for
various reasons including reasons that are unrelated to the performance of our
business.

     There has been significant volatility in the market price of securities of
health care companies that often has been unrelated to the operating performance
of such companies. In fact, our common stock, which trades on the Nasdaq
national market, has traded from a low of $8 per share to a high of $26 15/16
per share for the year ended December 31, 2000. We believe that various factors,
such as legislative and regulatory developments, quarterly variations in our
actual or anticipated results of operations, lower revenues or earnings than
those anticipated by securities analysts, the overall economy and the financial
markets could cause the price of our common stock to fluctuate substantially.

Anti-Takeover provisions in our charter documents could make it more difficult
for a third party to acquire us.

     Certain provisions of our Amended and Restated Certificate of
Incorporation, Amended and Restated Bylaws and Preferred Share Purchase Rights
Plan may be deemed to have anti-takeover effects and may delay, defer or prevent
a takeover attempt that a shareholder might consider in its best interest. Any
of these anti-takeover provisions could lower the value of our common stock.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company is subject to market risk associated principally with changes
in interest rates. Interest rate exposure is principally limited to the
revolving loan of $197.2 million at December 31, 2000.

     In May 2000, the Company entered into three interest rate swaps
transactions with an effective date of October 5, 2000, variable maturity dates,
and a combined notional amount of $105 million. These interest rate swap
transactions involve the exchange of floating for fixed rate interest payments
over the life of the agreement without the exchange of the underlying principal
amounts. The differential to be paid or received is accrued and is recognized as
an adjustment to interest expense. These agreements are indexed to 30 day LIBOR.
The following table summarizes the terms of the swaps:

<TABLE>
<CAPTION>
  Notional Amount(in millions)     Fixed Rate     Term in Months      Maturity
  <S>                              <C>            <C>                 <C>
             $45.0                   7.604%            24             10/07/02
             $30.0                   7.612%            36             10/06/03
             $30.0                   7.626%            48             10/05/04
</TABLE>

     The fixed rates do not include the credit spread which is currently 2.0%.
The fixed rates under the new agreements are approximately 2.6% higher than the
prior agreements reflecting the numerous interest rate increases by the Federal
Reserve since October 1998 and the current interest rate environment. Beginning
in October 2000, these higher fixed rates will increase the Company's annual
interest cost by approximately $2.7 million. In addition, further tightening of
interest rates by the Federal Reserve will increase the Company's interest cost
on the outstanding balance of the credit facility not subject to interest rate
protection. All of the Company's swap transactions involve the exchange of
floating for fixed rate interest payments over the life of the agreement without
the exchange of the underlying principal amounts. The differential to be paid or
received is accrued and is recognized as an adjustment to interest expense. The
Company uses derivative financial instruments to reduce interest rate volatility
and associated risks arising from the floating rate structure of its credit
facility and are not held or issued for trading purposes. The Company is
required by the terms of its credit facility to keep some form of interest rate
protection in place.

                                       38
<PAGE>

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA; INDEX TO CONSOLIDATED
          FINANCIAL STATEMENTS

     The Company's consolidated financial statements and financial statement
schedule and independent auditors' report thereon appear beginning on page F-2.
See index to such consolidated financial statements and schedules and reports on
page F-1.

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

     None.

                                       39
<PAGE>

                                   PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT

     The information required by this Item 10 will be contained in the Company's
definitive proxy materials to be filed with the Securities and Exchange
Commission and is incorporated in this Annual Report on Form 10-K by this
reference.

ITEM 11.  EXECUTIVE COMPENSATION

     The information required by this Item 11 will be contained in the Company's
definitive proxy materials to be filed with the Securities and Exchange
Commission and is incorporated in this Annual Report on Form 10-K by this
reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information required by this Item 12 will be contained in the Company's
definitive proxy materials to be filed with the Securities and Exchange
Commission and is incorporated in this Annual Report on Form 10-K by this
reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information required by this Item 13 will be contained in the Company's
definitive proxy materials to be filed with the Securities and Exchange
Commission and is incorporated in this Annual Report on Form 10-K by this
reference.

                                       40
<PAGE>

                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)  1.        Financial Statements:

               Reference is made to the index set forth on page F-1 of this
               Annual Report on Form 10-K.

     2.        Financial Statement Schedules:

               Reference is made to the index set forth on page F-1 of this
               Annual Report on Form 10-K.

     3.        Exhibits:

Exhibit No.                             Description
- -----------                             -----------

2.1            Asset Purchase Agreement, dated February 13, 1998, by and among
               AmeriPath, Inc., Anatomic Pathology Associates, LLP, Robert P.
               Hooker, M.D., Ralph F. Winkler, M.D., Steven A. Clark, M.D.,
               Edward R. Wills, M.D. Robin A. Helmuth, M.D., Garry A. Bolinger,
               M.D., T. Max Warner II, M.D., F. Donald McGovern Jr., M.D.,
               Richard O. McClure, M.D., Ann Moriarty, M.D., Janis K.
               Fitzharris, M.D., Ph. D., James E. McDermott III, M.D., Robert A.
               Quirey, M.D., Isabelle A. Buehl, M.D.(1)

2.2            Agreement and Plan of Merger by and among Ameripath, Inc. AMP
               Merger Corp., and Pathology Consultants of America, Inc. (D/B/A
               Inform DX), dated as of November 7, 2000 (3)

3.1            AmeriPath's Amended and Restated Bylaws (2)

3.2            Certificate of Designations of Series A Junior Participating
               Preferred Stock (8)

3.3            AmeriPath's Certificate of Amendment to the Amended and Restated
               Certificate of Incorporation (2)

4.1            Rights Agreement, dated as of April 8, 1999, between the
               Registrant and American Stock Transfer & Trust Company, as Rights
               Agent including the form of Certificate of Designations of Series
               A Junior Participating Preferred Stock, the form of Rights
               Certificate, and the form of Summary of Rights (8)

10.1           Amended and Restated 1996 Stock Option Plan (5)

10.2           Employment Agreement, dated as of October 24, 1995, between
               AmeriPath and James C. New (2)

10.5           Employment Agreement, dated June 30, 1996, between AmeriPath and
               Alan Levin, M.D. (2)

10.6           Employment Agreement, dated as of September 30, 1996, between
               AmeriPath Florida and Alan Levin, M.D., as amended (2)

10.7           Employment Agreement, dated as of June 30, 1996, between
               AmeriPath Florida and Timothy Kilpatrick, M.D. (2)

10.8           Employment Agreement, dated as of June 30, 1996, between
               AmeriPath Florida and Les Rosen, M.D. (2)

10.9           Credit Agreement originally dated as of May 29, 1996 and amended
               and restated as of June 27, 1997, among AmeriPath, Inc., the
               subsidiaries of AmeriPath, Inc. from time to time party thereto,
               the lenders from time to time party thereto and Bank of Boston,
               N.A. (2)

10.11          Management Agreement by and between AmeriPath APA, L.L.C. and
               AmeriPath Indiana, Inc., dated February 1, 1998 (1)

                                       41
<PAGE>

10.12          Stock Purchase Agreement, dated as of May 23, 1996, among
               AmeriPath, Inc., Derrick & Associates and the shareholders of
               Derrick & Associates (2)

10.13          Stock Purchase Agreement, dated as of September 30, 1996, by and
               among AmeriPath, Inc., David R. Barron, M.D., Inc., Ruth S.
               Kleier, M.D. and David R. Barron, M.D. (2)

10.14          Stock Purchase Agreement, dated as of October 31, 1996 among
               AmeriPath, Inc., Gulf Coast Pathology Associates, Inc., Richard

               Fernandez, M.D., and George Kalemeris, M.D. (2)

10.15          Form of Stock Rights Surrender & Restricted Stock Grant
               Agreement. (2)

10.16          1996 Director Stock Option Plan (2)

10.17          American Laboratory Associates, Inc. Series A Preferred Stock,
               Common Stock and Junior Subordinated Note Purchase Agreement,
               dated as of January 1, 1994 (2)

10.18          Letter Agreement, dated September 18, 1996, between Acquisition
               Management Services, Inc. and AmeriPath, Inc. (2)

10.19          AmeriPath Management Agreement by and between AmeriPath
               Cincinnati, Inc. and AmeriPath Ohio, Inc., dated September 30,
               1996 (2)

10.20          Management Agreement by and between Beno Michel, M.D., Inc. and
               AmeriPath, Inc., dated October 15, 1996 (2)

10.21          Management Agreement by and between Clay J. Cockerell, M.D., P.A.
               and AmeriPath Texas, Inc., dated September 30, 1996, as amended
               January 16, 1997 (2)

10.22          Agreement for Professional Pathology Services between SmithKline
               Beecham Clinical Laboratories, Inc. and Derrick and Associates
               Pathology, P.A., dated April 1, 1992 (2)

10.23          Agreement for Medical Directorship between SmithKline Beecham
               Clinical Laboratories, Inc. and Derrick and Associates Pathology,
               P.A., dated April 1, 1992 (2)

10.24          Agreement for Professional Pathology Services between SmithKline
               Beecham Clinical Laboratories, Inc. and AmeriPath Florida, Inc.,
               dated November 1, 1996 (2)

10.25          Share Exchange Agreement, dated as of February 15, 1996, by and
               among American Laboratory Associates, Inc., AmeriPath, Inc. and
               the holders of common and convertible preferred stock of American
               Laboratory Associates, Inc. (2)

10.26          Trust Agreement, dated as of October 15, 1996, between AmeriPath,
               Inc. and Beno Michel, as trustee (2)

10.27          Trust Agreement, dated as of September 30, 1996, between
               AmeriPath, Inc. and David R. Barron, M.D. as trustee (2)

10.28          Form of Nonqualified Stock Option Agreement (2)

10.29          Stock Purchase Agreement, dated as of October 15, 1996, by and
               among AmeriPath, Inc., Beno Michel, M.D., Inc. and Beno Michel,
               M.D. (2)

10.30          Stock Purchase Agreement, dated as of October 10, 1996, by and
               among AmeriPath, Inc., Drs. Seidenstein, Levine and Associates,
               Inc., Seidenstein, Levine Real Estate Partnership, Lawrence
               Seidenstein, M.D., Steven E. Levine, M.D. and David M. Reardon,
               M.D. (2)

                                       42
<PAGE>

10.31          Stock Issuance Agreement, dated as of June 26, 1996, among
               AmeriPath, Inc., The First National Bank of Boston, FSC Corp.,
               NationsBank, N.A. (South) and Atlantic Equity Corporation (2)

10.32          Stock Issuance Agreement, dated as of August 29, 1996, among
               AmeriPath, Inc., The First National Bank of Boston, FSC Corp.,
               NationsBank, N.A. (South) and Atlantic Equity Corporation (2)

10.33          Stock Issuance Agreement, dated as of November 4, 1996, among
               AmeriPath, Inc., The First National Bank of Boston and FSC Corp.
               (2)

10.34          Stock Purchase Agreement, dated August 21, 1997, by and among
               AmeriPath, Inc., J. Sloan Leonard, M.D., Joseph A. Sonnier, M.D.,
               Van Q. Telford, M.D., William C. Burton, M.D., James Scot
               Milvenan, M.D., Leslie L. Walters, M.D., Thomas M. James, M.D.,
               Stephen W. Aldred, M.D., John E. McDonald, M.D. and Barbara A.
               Shinn, M.D. (2)

10.35          Stock Purchase Agreement, dated August 15, 1997, by and among
               AmeriPath, Inc., Colab Incorporated Professional Corporation,
               Anatomical Pathology Services, P.C., Microdiagnostics, P.C. and
               the sellers set forth therein (2)

10.36          Lease effective June 1, 1995 by and between Dallas Pathology
               Leasing and Unipath, Ltd. (2)

10.37          Trust Agreement, dated August 29, 1997, between AmeriPath, Inc.
               and Jeffery A. Mossler, M.D. (2)

10.38          Management Agreement, by and between Colab, Inc. and AmeriPath
               Indianapolis, L.L.C., effective September 1, 1997 (2)

10.39          Management Agreement by and between AmeriPath Texas, Inc. and DFW
               5.01, effective September 1, 1997 (2)

10.40          Form of Executive Retention Agreement dated August 12, 1999,
               between AmeriPath and each of James C. New, Alan Levin, M.D. and
               Robert P. Wynn. (6)

10.41          Letter Agreement dated November 1, 1999 between AmeriPath, Inc.
               and James C. New. (7)

10.42          Consulting and Non-competition Agreement dated November 1, 1999
               between AmeriPath, Inc. and James C. New. (7)

10.43          Amended and Restated Credit Agreement dated as of December
               16,1999, among AmeriPath, Inc., certain of its subsidiaries,
               BankBoston N.A. and certain other lenders (9)

10.44          Amendment No. 1, dated July 21, 2000, to the Amended and Restated
               Credit Agreement dated as of December 16, 1999, among AmeriPath,
               Inc., certain of its subsidiaries, Fleet National Bank (formerly
               BankBoston N.A.) and certain other lenders (10)

10.45          Amendment No. 2, dated November 29, 2000, to the Amended and
               Restated Credit Agreement dated as of December 16, 1999, among
               AmeriPath, Inc., certain of its subsidiaries, Fleet National Bank
               (formerly BankBoston N.A.) and certain other lenders (3)

10.46          Registration Rights Agreement, dated November 30, 2000, among the
               Company and PCA's Shareholders and Warrant Holders (3)

21.1           Subsidiaries of AmeriPath (3)

23.1           Independent Auditors' Consent of Deloitte & Touche LLP (3)

23.2           Independent Auditors' Consent of Ernst & Young LLP (3)

                                       43
<PAGE>

- ----------------------------
(1)  Incorporated by reference and filed with the AmeriPath Form 8-K, dated
     February 13, 1998.

(2)  Incorporated by reference to the exhibit referenced and filed with the
     AmeriPath Form S-1 (File No. 333-34265), effective October 21, 1997, and
     the AmeriPath Form 8-A (File No. 000-22313), filed September 8, 1997.

(3)  Filed herewith.

(4)  Incorporated by reference to the exhibit referenced and filed with
     AmeriPath Form 10-Q for the quarter ended June 30, 1998 dated August 14,
     1998.

(5)  Incorporated by reference to the Company's Proxy Statement for its 1999
     Annual Meeting of Shareholders.

(6)  Incorporated by reference to the exhibit referenced and filed with
     AmeriPath Form 10-Q for the quarter ended June 30, 1999 dated August 16,
     1999.

(7)  Incorporated by reference to the exhibit referenced and filed with
     AmeriPath Form 10-Q for the quarter ended September 30, 1999 dated November
     15, 1999.

(8)  Incorporated by reference to the exhibit referenced and filed with
     AmeriPath Form 8-K, dated April 8, 1999.

(9)  Incorporated by reference to the exhibit referenced and filed with
     AmeriPath Annual Report on Form 10-K for the year ended December 31, 1999,
     dated March 27, 2000.

(10) Incorporated by reference to the exhibit referenced and filed with
     AmeriPath Form 8-K, dated July 21, 2000, filed on August 2, 2000.

(b)  Reports on Form 8-K

        A Current Report on Form 8-K, dated November 30, 2000, was filed by the
        Company with the Securities and Exchange Commission on December 8, 2000,
        reporting that on November 30, 2000, the Company completed and
        consummated the previously announced acquisition of Inform DX. In
        connection with the acquisition, the Company issued approximately 2.6
        million shares of common stock in exchange for all the outstanding
        common stock of Inform DX. In addition, the Company assumed certain
        obligations to issue shares of common stock pursuant to outstanding
        Inform DX stock option plans. This transaction will be accounted for as
        a pooling of interests.

                                       44
<PAGE>

                                  SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized, in Riviera Beach,
Florida, on April 2, 2001.

                                        AMERIPATH, INC.

                                        /s/ James C. New
                                        ----------------
                                        James C. New,
                                        Chairman and
                                        Chief Executive Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed by the following persons on behalf of the Registrant in
the capacities and on the date indicated.

<TABLE>
<CAPTION>
Signature                          Title                          Date
- ---------                          -----                          ----
<S>                                <C>                            <C>

/s/ James C. New                   Chairman                       April 2, 2001
- -------------------------------
James C. New                       and Chief Executive Officer

/s/ Gregory A. Marsh               Vice President,                April 2, 2001
- -------------------------------
Gregory A. Marsh                   Chief Financial Officer
                                   and Secretary

/s/ Alan Levin, M.D.               Director                       April 2, 2001
- -------------------------------
Alan Levin, M.D.

/s/ Brian C. Carr                  Director                       April 2, 2001
- -------------------------------
Brian C. Carr

                                   Director                       April 2, 2001
- -------------------------------
E. Martin Gibson

/s/ C. Arnold Renschler, M.D.      Director                       April 2, 2001
- -------------------------------
C. Arnold Renschler, M.D.

/s/ E. Roe Stamps, IV              Director                       April 2, 2001
- -------------------------------
E. Roe Stamps, IV
</TABLE>

                                       45
<PAGE>

AMERIPATH, INC. AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULE

<TABLE>
<CAPTION>
                                                                   Page
                                                                   ----
<S>                                                             <C>
Independent Auditors' Reports                                   F-2 to F-3

Consolidated Balance Sheets as of December 31, 1999 and 2000    F-4 to F-5

Consolidated Statements of Operations for the years ended
  December 31, 1998, 1999 and 2000                                  F-6

Consolidated Statements of Redeemable Preferred Stock and
  Common Stockholders' Equity for the years ended
  December 31, 1998, 1999 and 2000                                  F-7

Consolidated Statements of Cash Flows for the years ended
  December 31, 1998, 1999 and 2000                                  F-8

Notes to Consolidated Financial Statements                      F-9 to F-31
</TABLE>

All schedules called for by Regulation S-X have been omitted because they are
not applicable or because the required information is included in the financial
statements or the notes thereto.

                                      F-1
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of AmeriPath, Inc.:

We have audited the consolidated balance sheets of AmeriPath, Inc. and
subsidiaries (the "Company") as of December 31, 2000 and 1999, and the related
consolidated statements of operations, redeemable preferred stock and common
stockholders' equity, and cash flows for each of the three years in the period
ended December 31, 2000. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on the
financial statements based on our audits. The consolidated financial statements
give retroactive effect to the merger of AmeriPath, Inc. and subsidiaries and
Pathology Consultants of America, Inc. (d/b/a "Inform DX"), which has been
accounted for as a pooling of interests as described in Note 3 to the
consolidated financial statements. We did not audit the balance sheet of Inform
DX as of December 31, 1999, or the related statements of operations,
stockholders' equity, and cash flows of Inform DX for the years ended December
31, 1999 and 1998, which statements reflect total assets of $28,786,000 as of
December 31, 1999, and total revenues of $24,652,000 and $16,012,000 for the
years ended December 31, 1999 and 1998, respectively. Those statements were
audited by other auditors whose report has been furnished to us, and our
opinion, insofar as it relates to the amounts included for Inform DX for 1999
and 1998, is based solely on the report of such other auditors.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits and the report of
the other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the report of the other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects, the financial position of the Company as of December 31, 2000
and 1999, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 2000 in conformity with accounting
principles generally accepted in the United States of America.

/s/ DELOITTE & TOUCHE LLP

March 29, 2001

                                      F-2
<PAGE>

INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholders
Pathology Consultants of America, Inc. and Subsidiaries

We have audited the consolidated balance sheets of Pathology Consultants of
America, Inc. and subsidiaries as of December 31, 1999 and 1998, and the related
consolidated statements of operations, stockholders' equity, and cash flows for
the years then ended (not presented separately herein). These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Pathology Consultants of America, Inc. and subsidiaries at December 31, 1999 and
1998, and the consolidated results of their operations and their cash flows for
the years then ended in conformity with accounting principles generally accepted
in the United States.

/s/ Ernst & Young LLP

March 24, 2000

                                      F-3
<PAGE>

AMERIPATH, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                      December 31,
                                  ------------------
                                    1999      2000
                                  --------  --------
<S>                               <C>       <C>
ASSETS
CURRENT ASSETS:
 Cash and cash equivalents        $  1,713  $  2,418
 Accounts receivable, net           57,788    70,939
 Inventories                           995     1,406
 Deferred tax asset                  5,405     8,593
 Other current assets                2,468     2,853
                                  --------  --------

       Total current assets         68,369    86,209
                                  --------  --------

PROPERTY AND EQUIPMENT, NET         16,540    23,580
                                  --------  --------

OTHER ASSETS:
 Goodwill, net                     143,383   177,263
 Identifiable intangibles, net     246,394   268,627
 Other                               4,210     6,487
                                  --------  --------
       Total other assets          393,987   452,377
                                  --------  --------

TOTAL ASSETS                      $478,896  $562,166
                                  ========  ========
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-4
<PAGE>

AMERIPATH, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                             December 31,
                                                         ------------------
                                                           1999      2000
                                                         --------  --------
<S>                                                      <C>       <C>
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
 Accounts payable and accrued expenses                   $ 21,337  $ 35,712
 Due to managed practices                                   2,853     4,055
 Current portion of long-term debt                            698       808
 Current portion of capital lease obligations                 232       247
 Accrued merger-related charges                               275     3,165
 Other current liabilities                                    518     1,407
                                                         --------  --------
       Total current liabilities                           25,913    45,394
                                                         --------  --------

LONG-TERM LIABILITIES:
 Revolving loan                                           165,800   197,216
     Other notes payable, less current portion                 73       197
 Subordinated notes, less current portion                   1,206     2,843
 Capital lease obligations, less current portion              605       436
 Accrued merger-related charges, less current portion         912     2,369
 Other liabilities                                            148        --
 Deferred tax liability                                    62,521    64,046
                                                         --------  --------
       Total long-term liabilities                        231,265   267,107
                                                         --------  --------

REDEEMABLE PREFERRED STOCK                                 15,504        --
                                                         --------  --------

COMMITMENTS AND CONTINGENCIES (Notes 3, 14 and 18)

COMMON STOCKHOLDERS' EQUITY
 Common stock, $.01 par value, 30,000 shares
  authorized, 22,271 and 24,734 shares issued and
  outstanding at December 31, 1999 and 2000,
  respectively                                                223       247
 Additional paid-in capital                               156,111   188,050
 Retained earnings                                         49,880    61,368
                                                         --------  --------
       Total common stockholders' equity                  206,214   249,665
                                                         --------  --------

TOTAL LIABILITIES AND COMMON STOCKHOLDERS' EQUITY        $478,896  $562,166
                                                         ========  ========
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-5
<PAGE>

AMERIPATH, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                      Years Ended December 31,
                                                                  ------------------------------
                                                                    1998       1999       2000
                                                                  --------   --------   --------
<S>                                                               <C>        <C>        <C>
NET REVENUE:
 Net patient service revenues                                     $177,304   $233,269   $308,365
 Net management service revenues                                    16,012     24,163     21,729
                                                                  --------   --------   --------
   Net revenue                                                     193,316    257,432    330,094
                                                                  --------   --------   --------

OPERATING COSTS AND EXPENSES:
 Cost of services                                                   87,700    122,685    163,390
 Selling, general and administrative expense                        36,709     47,159     58,411
 Provision for doubtful accounts                                    18,698     25,289     34,040
 Amortization expense                                                9,615     12,827     16,172
 Merger-related charges                                                 --         --      6,209
 Asset impairment and related charges                                   --         --      9,562
                                                                  --------   --------   --------

   Total operating costs and expenses                              152,722    207,960    287,784
                                                                  --------   --------   --------

INCOME FROM OPERATIONS                                              40,594     49,472     42,310
Interest expense                                                    (8,560)    (9,573)   (15,376)
Other income, net                                                      150        286        226
                                                                  --------   --------   --------

Income before income taxes                                          32,184     40,185     27,160
Provision for income taxes                                          13,941     17,474     14,068
                                                                  --------   --------   --------

NET INCOME                                                          18,243     22,711     13,092

Induced conversion and accretion of redeemable preferred stock         (75)      (131)    (1,604)
                                                                  --------   --------   --------

NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS                    $ 18,168   $ 22,580   $ 11,488
                                                                  ========   ========   ========

Basic Earnings Per Common Share:
      Basic weighted average shares outstanding                     20,911     21,984     23,473
                                                                  ========   ========   ========

      Basic earnings per common share                                $0.87      $1.03      $0.49
                                                                  ========   ========   ========

Diluted Earnings Per Common Share:
      Diluted weighted average shares outstanding                   21,610     22,516     24,237
                                                                  ========   ========   ========

      Diluted earnings per common share                              $0.84      $1.00      $0.47
                                                                  ========   ========   ========
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-6
<PAGE>

AMERIPATH, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF REDEEMABLE PREFERRED
STOCK AND COMMON STOCKHOLDERS' EQUITY
(IN THOUSANDS)

<TABLE>
<CAPTION>
                                                 Redeemable
                                              Preferred Stock             Common Stockholders' Equity
                                           --------------------  -------------------------------------------
                                                                                     Additional
                                                                   Common Stock       Paid - in     Retained
                                                                   -------------
                                           Shares       Amount   Shares    Amount      Capital      Earnings
                                           -------     --------  ------    ------      -------      --------
<S>                                           <C>      <C>        <C>        <C>     <C>            <C>
BALANCE, DECEMBER 31, 1997                      --     $     --   19,931     $199    $136,272       $  9,132
 Stock issued in connection with
  acquisitions                                  --           --    1,788       18      16,208             --
 Advance stock subscription issued to
  Affiliated Practices                          --           --        2       --           9             --
 Exercise of options and warrants               --           --       27       --         263             --
 Tax benefit from stock options                 --           --       --       --         109             --
 Issuance of Series A redeemable
  preferred stock                              395       15,298       --       --          --             --
 Accretion of redeemable preferred
  stock                                         --           75       --       --          --             --
 Net income                                     --           --       --       --          --         18,168
                                           -------     --------   ------     ----    --------       --------
BALANCE, DECEMBER 31, 1998                     395       15,373   21,748      217     152,861         27,300
 Stock issued in connection with
  acquisitions                                  --           --      511        5       3,144             --
 Exercise of options and warrants               --           --       12        1          15             --
 Tax benefit from stock options                 --           --       --       --          91             --
 Accretion of redeemable preferred
  stock                                         --          131       --       --          --             --
 Net income                                     --           --       --       --          --         22,580
                                           -------     --------   ------     ----    --------       --------
BALANCE, DECEMBER 31, 1999                     395       15,504   22,271      223     156,111         49,880
 Stock issued in connection with
  acquisitions                                  --           --    1,532       15      12,165             --
 Exercise of options and warrants               --           --      288        3       1,584             --
 Tax benefit from stock options                 --           --       --       --         858             --
 Accretion of redeemable preferred
  stock                                         --           65       --       --          --             --
 Redemption of preferred stock                (395)     (15,569)     643        6      17,102             --
 Lapse of warrant put option                    --           --       --       --         230             --
 Net income                                     --           --       --       --          --         11,488
                                           -------     --------   ------     ----    --------       --------
BALANCE, DECEMBER 31, 2000                      --     $     --   24,734     $247    $188,050       $ 61,368
                                           =======     ========   ======     ====    ========       ========
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-7
<PAGE>

AMERIPATH, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                     Years Ended December 31,
                                                                                ------------------------------
                                                                                  1998       1999       2000
                                                                                --------   --------   --------
<S>                                                                             <C>        <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                                                                     $ 18,243   $ 22,711   $ 13,092
Adjustments to reconcile net income to net
 cash flows provided by operating activities:
  Depreciation and amortization                                                   12,601     16,758     21,291
  Miscellaneous amortization and other                                               220         49         22
  Deferred income taxes                                                           (3,607)    (2,006)    (9,117)
  Provision for doubtful accounts                                                 18,698     25,289     34,040
  Asset impairment and related charges                                                --         --      9,562
  Accretion of put warrants                                                           54         92         --
  Merger-related charges                                                              --         --      6,209
  Changes in assets and liabilities (net of effects of acquisitions):
   Increase in accounts receivable                                               (27,577)   (31,756)   (40,008)
   Increase in inventories                                                          (417)       (39)      (411)
   (Increase) decrease in other current assets                                    (4,321)     2,382       (265)
   Decrease (increase) in other assets                                               296       (731)    (1,638)
   Increase (decrease) in due to/from managed practices                            2,744     (1,717)     1,202
   Increase in accounts payable and accrued expenses                               3,545      1,661      1,756
Pooling merger-related charges paid                                                   --         --     (3,800)
                                                                                --------   --------   --------
     Net cash flows provided by operating activities                              20,479     32,693     31,935
                                                                                --------   --------   --------

CASH FLOWS FROM INVESTING ACTIVITIES:
 Acquisition of property and equipment                                            (4,393)    (8,716)    (9,235)
 Cash paid for acquisitions and acquisition costs, net of cash acquired          (60,472)   (51,643)   (24,929)
 Other merger-related charges paid                                                (1,779)    (1,741)    (2,396)
 Investment in Genomics Collaborative, Inc.                                           --         --     (1,000)
 Decrease in restricted cash                                                          21        229         --
 Payments of contingent notes                                                     (7,789)   (17,440)   (26,645)
                                                                                --------   --------   --------
     Net cash flows used in investing activities                                 (74,412)   (79,311)   (64,205)
                                                                                --------   --------   --------

CASH FLOWS FROM FINANCING ACTIVITIES:
 Net borrowings under revolving loan                                              53,069     44,713     31,416
 Principal payments on long-term debt and capital leases                          (9,966)    (1,701)      (818)
 Debt issuance costs                                                                (496)    (1,171)       (82)
 Net proceeds from sale of redeemable preferred stock                             15,298         --         --
 Tax benefit from stock options                                                      109         91        858
 Other                                                                                --         --         14
 Proceed from issuance of common stock under stock option plans and warrants         272         16      1,587
                                                                                --------   --------   --------
     Net cash flows provided by financing activities                              58,286     41,948     32,975
                                                                                --------   --------   --------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                   4,353     (4,670)       705
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                     2,030      6,383      1,713
                                                                                --------   --------   --------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                        $  6,383   $  1,713   $  2,418
                                                                                ========   ========   ========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
 Interest                                                                       $  8,034   $  8,924   $ 14,645
 Income taxes                                                                   $ 17,833   $ 15,890   $ 23,798
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-8
<PAGE>

AMERIPATH, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

1.   Business and Organization

AmeriPath, Inc. ("AmeriPath" or the "Company") was incorporated in February 1996
to be the largest integrated physician group practice focused on anatomic
pathology diagnostic services, based on an analysis of geographic breadth,
number of physicians, number of hospital contracts, number of practices and net
revenues. Since the first quarter of 1996, the Company has completed the
acquisition of 49 physician practices located in twenty-one states. The
Company's 425 pathologists provide medical diagnostic services in 42 outpatient
laboratories owned and operated by the Company, and in 224 hospitals and
associated outpatient surgery centers.

On November 30, 2000, the Company acquired Pathology Consultants of America,
Inc., d/b/a Inform DX ("Inform DX"). In connection with the acquisition, the
Company issued approximately 2.6 million shares of common stock in exchange for
all the outstanding common stock of Inform DX. In addition, the Company assumed
certain obligations to issue shares of common stock pursuant to outstanding
Inform DX stock option plans. This transaction was accounted for as a pooling of
interests. All prior years information has been restated to reflect the
acquisition of Inform DX.

Anatomic and clinical pathology diagnostic services are provided under
contractual arrangements with hospitals and in free-standing, independent
laboratory settings. The contractual arrangements with hospitals vary, but
essentially provide that, in exchange for physician representatives of the
Company serving as the medical director of a hospital's anatomic and clinical
laboratory operations, the Company is able to bill and collect the professional
component of the charges for medical services rendered by the Company's
pathologists. In some cases, the Company is also paid an annual fee for
providing the medical director for the hospital's clinical laboratory. The
Company also owns and operates outpatient pathology laboratories, for which it
bills patients and third party payors, principally on a fee-for-service basis,
covering both the professional and technical components of such services. In
addition, the Company contracts directly with national clinical laboratories,
principally on a fee-for-service basis.

The Company operates using either an ownership or employment model or a
management or equity model. Under management or equity model, the Company
acquires certain assets of and operates pathology practices under long-term
service agreements with affiliated physician groups (the "Managed Practices").
The Company provides facilities and equipment as well as administrative and
technical support for the affiliated physician groups under service agreements.
Through its ownership or employment model, the Company acquires a controlling
equity interest in the pathology practice (the "Owned Practices").

Corporate practice of medicine restrictions generally prohibit corporate
entities from employing or otherwise exercising control over physicians. In
states that do not prohibit a for-profit corporation from employing physicians
such as Florida, Alabama, Mississippi and Kentucky, AmeriPath operates its Owned
Practices through Practice Subsidiaries, which are subsidiary corporations of
AmeriPath that directly employ the physicians. In states that prohibit a for-
profit corporation from employing physicians, such as Texas, Indiana, Ohio,
North Carolina, Michigan, Wisconsin, New York and Pennsylvania, AmeriPath
operates each Owned Practice through a Manager Subsidiary, which is a subsidiary
of AmeriPath that has a long-term management agreement with the applicable PA
Contractor, which in turn employs the physicians. In many cases, several
Practices are included within or organized under a single Practice Subsidiary or
PA Contractor, as the case may be.

Owned Practices. Owned practices are operated through Manager and Practice
Subsidiaries. The Manager and Practice Subsidiaries are wholly-owned
subsidiaries of AmeriPath and the officers and directors of such companies are
generally members of AmeriPath's executive management team. The financial
statements of the Manager and Practice Subsidiaries are included in the
consolidated financial statements of AmeriPath.

Ownership and Management of the PA Contractors. The PA Contractors are entities
which have contractual relationships with the Company but are not owned directly
by AmeriPath. These entities can be a professional corporation or professional
association, as permitted and defined in various state statutes. The PA
Contractors operating in North Carolina, Wisconsin, New York, Michigan and
Pennsylvania are owned by physicians affiliated with AmeriPath. To the extent
permitted by law, the officers and directors of the PA Contractors are members
of AmeriPath's executive management team. However, in states

                                      F-9
<PAGE>

where law prohibits such non-licensed physician personnel from serving as an
officer or director of a PA Contractor, eligible affiliated physicians serve in
such positions. The affiliated physicians who own PA Contractors have entered
into agreements with AmeriPath that generally (i) prohibit such affiliated
physicians from transferring their ownership interests in the PA Contractor,
except in very limited circumstances and (ii) require such affiliated physicians
to transfer their ownership in the PA Contractor to designees of AmeriPath upon
the occurrence of specified events.

The PA Contractors in Ohio and Indiana are owned by trusts. The beneficiary of
such trusts is AmeriPath and the Trustees of such trusts are affiliated
physicians. The PA Contractors operating in Texas are organized as not-for-
profit 5.01(a) corporations. The sole member of the not-for-profit PA
Contractors in Texas is AmeriPath.

Each PA Contractor is party to a long-term management agreement with one of the
Company's Manager Subsidiaries. Under the terms of these management agreements,
AmeriPath generally provides all non-medical and administrative support services
to the practices including accounting and financial reporting, human resources,
payroll, billing, and employee benefits administration. In addition, the
management agreements give the Manager Subsidiaries certain rights with respect
to the management of the non-medical operations of the PA Contractors. The
management agreements require the PA Contractors to pay a management fee to the
applicable Manager Subsidiaries. The fee structure is different for each
Practice based upon various factors, including applicable law, and includes fees
based on a percentage of earnings, performance-based fees, and flat fees that
are adjusted from time to time.

In accordance with Emerging Issues Task Force 97-2:"Application of FASB
Statement No. 94 and APB Opinion No. 16 to Physician Practice Management
Entities and Certain Other Entities with Contractual Management Agreements"
("EITF 97-2"), the financial statements of the PA Contractors are included in
the consolidated financial statements of AmeriPath since AmeriPath has a
controlling interest in the PA Contractor.

Managed Practices. The term Managed Practices refers to AmeriPath's operation
and management of pathology practices under long-term service agreements with
affiliated physician groups. Generally, the Company acquires the practice's
assets, and the physician groups maintain their separate corporate or
partnership entities and enter into employment and noncompete agreements with
the practicing physicians. Costs of obtaining service agreements are amortized
using the straight-line method over 25 years.

Service agreements represent the exclusive right to operate the Company's
practices in affiliation with the related physician groups during the term of
the agreements. Pursuant to the service agreements, the Company provides the
physician groups with equipment, supplies, support personnel, and management and
financial advisory services. Physician groups are responsible for the
recruitment and hiring of physicians and all other personnel who provide
pathological services, and for all issues related to the professional, clinical
and ethical aspects of the practice. As part of the service agreements,
physician groups are required to maintain medical malpractice insurance which
names the Company as an additional insured. The Company is also required to
maintain general liability insurance and name the physician groups as additional
insureds. Upon termination of the service agreements, the respective physician
groups are required to obtain continuing liability insurance coverage under
either a "tail policy" or a "prior acts policy."

The management services fees charged under the service agreements are based on a
predetermined percentage of net operating income of the Managed Practices.
Management service revenue is recognized by the Company at the time physician
service revenue is recorded by the physician group. The Company also
participates to varying degrees in non-physician revenues generated from
ancillary services offered through the laboratories. The Company charges a
capital fee for the use of depreciable assets owned by the Company and
recognizes revenue for all practice expenses that are paid on behalf of the
practices. Practice expenses exclude the salaries and benefits of the
physicians.

                                      F-10
<PAGE>

2.   Summary of Significant Accounting Policies

A summary of significant accounting policies followed by the Company are as
follows:

Principles of Consolidation

The consolidated financial statements of the Company include the accounts of
AmeriPath, Inc., its wholly-owned subsidiaries, and companies in which the
Company has the controlling financial interest by means other than the direct
record ownership of voting stock, as discussed in Note 1. Intercompany accounts
and transactions have been eliminated. The Company does not consolidate the
affiliated physician groups it manages as it does not have operating control as
defined in EITF 97-2.

Accounting Estimates

The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States ("generally
accepted accounting principles") requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenue and
expenses. Because of the inherent uncertainties in this process, actual results
could differ from those estimates. Such estimates include the recoverability of
intangible assets and the collectibility of receivables.

Fair Value of Financial Instruments

The Company's financial instruments consist mainly of cash and cash equivalents,
accounts receivable, due to/from physician groups, accounts payable and the
credit facility. The carrying amounts of the Company's cash and cash
equivalents, accounts receivable and accounts payable approximate fair value due
to the short-term nature of these instruments. Approximately $92,000 of the
credit facility bears interest at a variable market rate, and thus has a
carrying amount that approximates fair value. The remaining $105,000 of the
credit facility was subject to interest rate swaps as described in Note 13. The
estimated fair value of the interest rate swaps, which is the amount necessary
to unwind the swap, was approximately $1,100 and ($4,968) as of December 31,
1999 and 2000, respectively. The estimated fair value of the Company's interest
rate swaps was obtained from outside sources.

Cash and Cash Equivalents

Cash equivalents consist of highly liquid instruments with maturities at the
time of purchase of three months or less. Included in cash and cash equivalents
at December 31, 2000 was $818 of restricted cash used as collateral under
certain letters of credit.

Inventories

Inventories, consisting primarily of laboratory supplies, are stated at the
lower of cost, determined on a first-in-first-out basis, or market.

Property and Equipment

Property and equipment are stated at cost. Routine maintenance and repairs are
charged to expense as incurred, while cost of betterments and renewals are
capitalized.

Depreciation and amortization are calculated on a straight-line basis and
accelerated methods, over the estimated useful lives of the respective assets
which lives range from 3 to 7 years. Leasehold improvements are amortized over
the shorter of the term of the related lease, including renewal options, or the
useful life of the asset.

Intangible Assets

The allocation of the purchase price of the 2000 acquisitions is preliminary,
while the Company continues to obtain the information necessary to determine the
fair value of the assets acquired and liabilities assumed. When the Company
obtains final information, management believes that adjustments, if any, will
not be material in relation to the consolidated financial statements.

                                      F-11
<PAGE>

Identifiable intangible assets include hospital contracts, physician referral
lists and laboratory contracts acquired in connection with acquisitions. Such
assets are recorded at fair value on the date of acquisition as determined by
management based on independent consultants' reports performed to assist
management in this determination and are being amortized over the estimated
periods to be benefited, ranging from 10 to 40 years. In determining these lives
the Company considered each practice's operating history, contract renewals,
stability of physician referral lists and industry statistics.

Goodwill relates to the excess of cost over the fair value of net assets of the
businesses acquired. The amortization periods for goodwill were determined by
the Company with consideration given to the lives assigned to the identifiable
intangibles, the reputation of the practice, the length of the practice's
operating history, and the potential of the market in which the acquired
practice is located. Amortization is calculated on a straight line basis over
periods ranging from 10 to 35 years.

Management assesses on an ongoing basis if there has been an impairment in the
carrying value of its intangible assets. If the undiscounted future cash flows
over the remaining amortization period of the respective intangible asset
indicates that the value assigned to the intangible asset may not be
recoverable, the carrying value of the respective intangible asset will be
reduced. The amount of any such impairment would be determined by comparing
anticipated discounted future cash flows from acquired businesses with the
carrying value of the related assets. In performing this analysis, management
considers such factors as current results, trends and future prospects, in
addition to other relevant factors.

The Company has entered into a management service agreement with each of the
physician groups of the Managed Practices for a period up to 40 years. Upon the
Company's acquisition of the practice's assets, the physician groups maintain
their separate corporate or partnership entities and enter into employment and
noncompete agreements with the practicing physicians. Costs of obtaining these
management service agreements are amortized using the straight-line method over
25 years.

Deferred Debt Issuance Costs

The Company incurred costs in connection with bank financing. These costs have
been capitalized and are being amortized on a straight-line basis, which
approximates the interest method, over the five year term. Such amounts are
included in other assets in the consolidated balance sheet.

Revenue Recognition

The Company recognizes net patient service revenue at the time services are
performed. Unbilled receivables are recorded for services rendered during, but
billed subsequent to, the reporting period. Net patient service revenue is
reported at the estimated realizable amounts from patients, third-party payors
and others for services rendered. Revenue under certain third-party payor
agreements is subject to audit and retroactive adjustments. Provision for
estimated third-party payor settlements and adjustments are estimated in the
period the related services are rendered and adjusted in future periods as final
settlements are determined. The provision and the related allowance are adjusted
periodically, based upon an evaluation of historical collection experience with
specific payors for particular services, anticipated collection levels with
specific payors for new services, industry reimbursement trends, and other
relevant factors.

Unbilled receivables for the Owned Practices, net of allowances, as of December
31, 1999 and 2000 amounted to approximately $5,200 and $8,600, respectively.

Net management service revenue reported by the Company represents net physician
group revenue less amounts retained by physician groups. The amounts retained by
physician groups represent amounts paid to the physicians pursuant to the
management service agreements between the Company and the physician groups. Net
physician group revenue is equal to billed charges reduced by provisions for bad
debt and contractual adjustments. Contractual adjustments represent the
difference between amounts billed and amounts reimbursable by commercial
insurers and other third-party payors pursuant to their respective contracts
with the physician groups. The provision for bad debts represents management's
estimate of potential credit issues associated with amounts due from patients,
commercial insurers, and other third-party payors.

                                      F-12
<PAGE>

Income Taxes

The Company's provision for income taxes includes federal and state income taxes
currently payable and changes in deferred tax assets and liabilities, excluding
the establishment of deferred tax assets and liabilities related to
acquisitions. Deferred income taxes are accounted for in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 109, Accounting for
Income Taxes and represent the estimated future tax effects resulting from
temporary differences between financial and tax reporting bases of assets and
liabilities. In addition, future tax benefits, such as net operating loss
("NOL") carryforwards, are required to be recognized to the extent that
realization of such benefits is more likely than not. A valuation allowance is
established for those benefits that do not meet the more likely than not
criteria. A valuation allowance has been established for $3,548 of the net
deferred tax assets at December 31, 2000 due to the uncertainty regarding the
Company's ability to utilize the acquired net operating loss carryforwards of
Inform DX due to Internal Revenue Code limitations.

Segment Reporting

The Financial Accounting Standards Board ("FASB") issued SFAS No. 131,
Disclosures about Segments of an Enterprise and Related Information effective
for fiscal years beginning after December 15, 1997. The Company has two
reportable segments, Owned Practices and Managed Practices, based upon
management reporting and the consolidated reporting structure.

Recent Accounting Pronouncements

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 101 ("SAB 101"), Revenue Recognition in Financial Statements, which
provided the staff's views in applying generally accepted accounting principles
to selected revenue recognition issues. In June 2000, SAB 101 was amended by SAB
101B, which delayed the implementation of SAB 101 until no later than the fourth
fiscal quarter of fiscal years beginning after December 15, 1999. The Company
adopted SAB 101 in the fourth quarter of 2000. The adoption of the provisions of
SAB 101 did not have a material impact on the Company's financial position or
results of operations.

In June 1998, the FASB issued Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging Activities," ("SFAS
133") and in June 1999, the FASB issued Statement of Financial Accounting
Standards No. 137 "Accounting for Derivative Instruments and Hedging Activities-
Deferral of the Effective Date of FASB Statement No. 133," which delayed the
effective date the Company is required to adopt SFAS 133 until its fiscal year
2001. In June 2000, the FASB issued Statement of Financial Accounting Standards
No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities - an Amendment to FASB Statement No. 133." This statement amended
certain provisions of SFAS 133. SFAS 133 requires the Company to recognize all
derivatives on the balance sheet at fair value. Derivatives that are not hedges
must be adjusted to fair value through income. If the derivative is a hedge,
depending on the nature of the hedge, changes in the fair value of derivatives
will either be offset against the change in fair value of the hedged assets,
liabilities, or firm commitments through earnings or recognized in other
comprehensive income until the hedged item is recognized in earnings. The
ineffective portion of a derivative's change in fair value will be immediately
recognized in earnings. The Company does not enter into derivative financial
instruments for trading purposes. Upon adoption of SFAS 133 in the first fiscal
quarter of 2001, these activities will be recognized on the Consolidated Balance
Sheet. The Company's adoption of SFAS 133 will not have a material effect on the
Company's earnings. The adoption of SFAS 133 will result in the reduction of
other comprehensive income of approximately $5,000.

Reclassifications

Certain prior year amounts have been reclassified to conform to the 2000
presentation and/or to reflect the merger with Inform DX accounted for as a
pooling-of-interests.

3.   Merger and Acquisitions

Acquired Practices: Pooling method

On November 30, 2000, the Company completed a merger transaction with Inform DX
that was accounted for as a pooling-of-interests transaction. The Company issued
2.6 million Common Shares to Inform DX stockholders and Inform DX's outstanding
stock options were converted into options to purchase approximately 170,000
common shares of AmeriPath. The

                                      F-13
<PAGE>

historical consolidated financial statements for periods prior to the
consummation of the combination are restated as though the companies had been
combined during such periods.

The table below presents a reconciliation of total revenue and net income
available for Common Shares as reported in the accompanying consolidated
financial statements with those previously reported by the Company.

<TABLE>
<CAPTION>
                                                                             Combined
                                             AmeriPath      Inform DX    Adjustements (A)    Combined
                                             ---------      ---------    ----------------    --------
<S>                                          <C>            <C>              <C>             <C>
Eleven months ended November 30, 2000
- -------------------------------------
   Total revenue                              $269,865        $34,329              --        $304,194
                                              ========        =======        ========        ========
   Net income (loss)                          $ 20,514        $(6,250)             --        $ 14,264
                                              ========        =======        ========        ========

Year ended December 31, 1999
- ----------------------------
   Total revenue                              $232,753        $24,652        $     27        $257,432
                                              ========        =======        ========        ========
   Net income (loss)                          $ 22,969        $   (31)       $   (358)       $ 22,580
                                              ========        =======        ========        ========

Year ended December 31, 1998
- ----------------------------
   Total revenue                              $177,304        $16,012              --        $193,316
                                              ========        =======        ========        ========
   Net income (loss)                          $ 18,639        $  (683)       $    212        $ 18,168
                                              ========        =======        ========        ========
</TABLE>

(A)      The provision for income taxes has been adjusted by $357 and $(212) in
         1999 and 1998, respectively, to reflect the recordation of acquired net
         operating loss carry forwards, related valuation allowances and other
         various timing differences of Inform DX in accordance with SFAS No.
         109. In addition, certain reclassifications totaling $27 were made to
         conform to the current year presentation.

See Note 12 for additional information.

Acquired Practices: Purchase method

During 2000, the Company acquired nine anatomic pathology practices, including
the two practices acquired by Inform DX. The total consideration paid by the
Company in connection with these acquisitions included cash of $32,457,
1,532,000 shares of common stock (aggregate value of $12,180 based upon amounts
recorded on the Company's consolidated financial statements) and subordinated
debt of $2,794. In addition, the Company issued additional purchase price
consideration in the form of contingent notes. During 1999, the Company acquired
eleven anatomic pathology practices, including one by Inform DX. The total
consideration paid by the Company in connection with these acquisitions included
cash of $51,746, 486,796 shares of common stock (aggregate value of $2,954 based
upon amounts recorded on the Company's consolidated financial statements) and
subordinated debt of $848. In addition, the Company issued additional purchase
price consideration in the form of contingent notes. During the year ended
December 31, 2000, the Company made contingent note payments of $26,645 and
other purchase price adjustments of approximately $2,876 in connection with
certain post-closing adjustments and acquisition costs. During the year ended
December 31, 1999, the Company issued an additional 23,930 shares of common
stock, valued at $195, and made contingent note payments of $17,440 and other
purchase price adjustments of $2,965 in connection with certain post-closing
adjustments and acquisition costs.

The acquisitions have been accounted for using the purchase method of
accounting, except for the Inform DX acquisition. The aggregate consideration
paid, and to be paid, is based on a number of factors, including each practice's
demographics, size, local prominence, position in the marketplace and historical
cash flows from operations. Assessment of these and other factors, including
uncertainties regarding the health care environment, resulted in the sellers of
each of the practices and the Company being unable to reach agreement on the
final purchase price. The Company agreed to pay a minimum purchase price and to
pay additional purchase price consideration to the sellers of the practices in
proportion to their respective ownership interest in each practice. The
additional payments are contingent upon the achievement of stipulated levels of
operating earnings (as defined) by each of the practices over periods of three
to five years from the date of the acquisition as set forth in the respective
agreements, and are not contingent on the continued employment of the sellers of
the practices. In certain cases, the payments are contingent upon other factors
such as the retention of certain hospital contracts for periods ranging from
three to five years. The amount of the payments cannot be determined until the
achievement of the operating earnings levels or other factors during the terms
of the respective agreements. If the maximum specified levels of operating
earnings for each practice are achieved, the Company would make aggregate
maximum payments, including principal and interest, of approximately $198,359
over the next three to five years.

                                      F-14
<PAGE>

At the mid-point level, the aggregate principal and interest would be
approximately $89,695 over the next three to five years. A lesser amount or no
payments at all would be made if the mid-point levels of operating earnings
specified in each agreement are not met. Through December 31, 2000, the Company
made contingent note payments aggregating $53,398, which represent 63% of the
maximum amount available. Additional payments are accounted for as additional
purchase price, which increases the recorded goodwill.

The accompanying consolidated financial statements include the results of
operations of the acquisitions from the date acquired through December 31, 2000.
The following unaudited pro forma information presents the consolidated results
of the Company's operations and the results of operations of the 1999 and 2000
acquisitions for the years ended December 31, 1999 and 2000 after giving effect
to amortization of goodwill and identifiable intangible assets, interest expense
on long-term debt incurred in connection with these acquisitions, and the
reduced level of certain specific operating expenses (primarily compensation and
related expenses attributable to former owners) as if the acquisitions had been
consummated on January 1, 1999. Such unaudited pro forma information is based on
historical financial information with respect to the 1999 and 2000 acquisitions
and does not include operational or other changes which might have been effected
by the Company.

The unaudited pro forma information for the years ended December 31, 1999 and
2000 presented below is for illustrative information purposes only and is not
necessarily indicative of results which would have been achieved or results
which may be achieved in the future:

<TABLE>
<CAPTION>
                                               Pro Forma
                                              December 31,
                                           ------------------
                                             1999      2000
                                           --------  --------
<S>                                        <C>       <C>
Net revenue                                $321,703  $357,638
                                           ========  ========
Net income attributable to common stock    $ 27,900  $ 15,849
                                           ========  ========
Net income per share (diluted)             $   1.09  $   0.62
                                           ========  ========
</TABLE>

4.   Accounts Receivable

Accounts receivable are recorded at net realizable value. The allowance for
contractual and other adjustments and uncollectible accounts is based on
historical experience and judgments about future events. Accordingly, the actual
amounts experienced could vary significantly from the recorded allowances. For
Managed Practices, terms of the service agreements require the Company to
purchase receivables generated by the physician groups on a monthly basis. Such
amounts are recorded net of contractual allowances and estimated bad debts. For
Managed Practices, accounts receivable are a function of the net physician group
revenue rather than the net revenue of the Company.

<TABLE>
<CAPTION>

                                                                        December 31,
                                                                    -------------------
Accounts receivable consisted of the following:                       1999       2000
                                                                    --------   --------
<S>                                                                 <C>        <C>
Gross accounts receivable                                           $130,791   $166,873
Less:   Allowance for contractual
          and other adjustments                                      (47,047)   (54,840)
        Allowance for uncollectible accounts                         (25,956)   (41,094)
                                                                    --------   --------
Accounts receivable, net                                            $ 57,788   $ 70,939
                                                                    ========   ========
</TABLE>

                                      F-15
<PAGE>

The following table represents the rollforward of the allowances for contractual
adjustments and uncollectible accounts:

<TABLE>
<CAPTION>
                                                        Years Ended December 31,
                                                  ------------------------------------
                                                   1998         1999           2000
                                                  -------     ---------      ---------
<S>                                               <C>         <C>            <C>
Beginning allowances for contractual
  adjustments and uncollectible accounts          $26,522     $  62,512      $  73,003
Provision for contractual adjustments              80,664       128,585      $ 178,873
Provision for doubtful accounts                    18,698        25,289      $  34,040
Managed Practice contractual adjustments
  and bad debt expense                             31,429        41,712      $  44,849
Write-offs and other adjustments                  (94,801)     (185,095)     $(229,831)
                                                  -------     ---------      ---------
Ending allowance for contractual
  adjustments and uncollectible accounts          $62,512     $  73,003      $  95,934
                                                  =======     =========      =========
</TABLE>

The Company grants credit without collateral to individual patients, most of
whom are insured under third party payor agreements. The estimated mix of
receivables from patients and third-party payors are as follows:

<TABLE>
<CAPTION>
                                                                   December 31,
                                                              ---------------------
                                                                1999        2000
                                                              ---------   ---------
<S>                                                               <C>         <C>
Government programs                                                18.8%       17.8%
Third-party payors                                                 53.7        53.3
Private pay patients                                               22.5        23.8
Other                                                               5.0         5.1
                                                              ---------   ---------
                                                                  100.0%      100.0%
                                                              =========   =========
</TABLE>

5.   Net Revenue

<TABLE>
<CAPTION>
                                                                     Years Ended December 31,
                                                                 --------------------------------
Net patient service revenue consisted of the following:            1998        1999        2000
                                                                 --------   ---------   ---------
<S>                                                              <C>        <C>         <C>
Gross revenue                                                    $257,968   $ 361,854   $ 482,238
Less contractual and other adjustments                            (80,664)   (128,585)   (173,873)
                                                                 --------   ---------   ---------

 Net patient service revenue                                     $177,304   $ 233,269   $ 308,365
                                                                 ========   =========   =========
</TABLE>

Net management service revenue consisted of the following:

<TABLE>
<CAPTION>
                                                                     Years Ended December 31,
                                                                 --------------------------------
                                                                   1998        1999        2000
                                                                 --------   ---------   ---------
<S>                                                              <C>        <C>         <C>
Gross physician group revenue                                    $ 61,694   $  85,379   $  86,203
Contractual adjustments and bad debt expense                      (31,429)    (41,712)    (44,849)
                                                                 --------   ---------   ---------
Net physician group revenue                                        30,265      43,667      41,354
Less amounts retained by physician groups                         (14,253)    (19,504)    (19,625)
                                                                 --------   ---------   ---------
Net management service revenue                                   $ 16,012   $  24,163   $  21,729
                                                                 ========   =========   =========
</TABLE>

A significant portion of the Company's net revenue is generated by the hospital-
based practices through contracts with 168, 207 and 224 hospitals as of December
31, 1998, 1999 and 2000, respectively. HCA - The Healthcare Company ("HCA")
owned 29, 27 and 27 of these hospitals as of December 31, 1998, 1999 and 2000,
respectively. For the years ended December 31, 1998, 1999 and 2000,
approximately 17%, 15%, and 13%, respectively of net patient service revenue was
generated directly from contracts with hospitals owned by HCA. Generally, these
contracts and other hospital contracts have remaining terms of less than five
years and contain renewal provisions. Some of the contracts also contain clauses
that allow for termination by either party with relatively short notice. HCA has
been under government investigation for some time and is evaluating its
operating strategies; including the sale, spin-off or closure of certain
hospitals. Although the Company, through its acquisitions, has had relationships
with these hospitals and national labs for extended periods of time, the
termination of one or more of these contracts could have a material adverse
effect on the Company's financial position and results of operations. The
Company from time to

                                      F-16
<PAGE>

time evaluates the carrying values of identified intangibles and goodwill and
the related useful lives assigned to such assets. See Note 8 for additional
information related to the impairment of certain hospital contracts.

6.   Property and Equipment

<TABLE>
<CAPTION>
                                                            Estimated
                                                           Useful Life        December 31,
                                                                           -------------------
Property and equipment consisted of the following:           (Years)         1999       2000
                                                             -------       --------   --------
<S>                                                        <C>             <C>        <C>
Laboratory, office and data processing equipment               3-7         $ 19,336   $ 27,668
Construction in progress                                                      2,693      1,511
Leasehold improvements                                        5-10            3,510      7,984
Furniture and fixtures                                         3-7            2,070      2,590
Mobile laboratory units                                          3              175        175
Automotive vehicles                                            3-5            1,058      1,380
                                                                           --------   --------
                                                                             28,842     41,308
Less accumulated depreciation                                               (12,302)   (17,728)
                                                                           --------   --------
Property and equipment, net                                                $ 16,540   $ 23,580
                                                                           ========   ========
</TABLE>

Depreciation expense was $2,669, $3,554 and $4,748 for the years ended December
31, 1998, 1999 and 2000, respectively.

7.   Intangible assets

Intangible assets and the related accumulated amortization and amortization
periods are as follows:

<TABLE>
<CAPTION>
                                                  Amortization Periods
                                                       (Years)
                                                       -------
                               December 31,                    Weighted
                            -------------------
                              1999       2000      Range       Average
                            --------   --------   --------     -------
<S>                         <C>        <C>        <C>          <C>
Hospital contracts          $193,899   $211,738      25-40        32.3
Physician client lists        54,893     71,447      10-30        20.7
Laboratory contracts           7,317      4,543         10        10.0
Management agreements         11,022     11,214         25        25.0
                            --------   --------
                             267,131    298,942
Accumulated amortization     (20,737)   (30,315)
                            --------   --------
Balance, net                $246,394   $268,627
                            ========   ========

Goodwill                    $153,749   $193,231      10-35        30.5
Accumulated amortization     (10,366)   (15,968)
                            --------   --------
Balance, net                $143,383   $177,263
                            ========   ========
</TABLE>

The amortization periods for the identifiable intangible assets were determined
by the Company based on reports of independent consultants, performed to assist
management in this determination. In determining these lives, the Company
considered each practice's operating history, contract renewals, stability of
physician referral lists and industry statistics.

The amortization periods for goodwill were determined by the Company with
consideration given to the lives assigned to the identifiable intangibles, the
reputation of the practice, the length of the practice's operating history, and
the potential of the market in which the acquired practice is located.

The weighted average amortization period for identifiable intangible assets and
goodwill is 29.6 years.

                                      F-17
<PAGE>

8.   Asset Impairments and Related Charges

During the second quarter ended June 30, 2000, the Company recorded a pre-tax
non-cash charge of approximately $4,700, and related cash charges of
approximately $545 in connection with the impairment of intangible assets at an
acquired practice in Cleveland, Ohio. The Company had provided services at four
hospitals and an ambulatory care facility owned by Primary Health Systems
("PHS"), a regional hospital network in Cleveland, Ohio. During the first
quarter of 2000, PHS began implementing a plan of reorganization filed under
Chapter 11 with the U.S. Bankruptcy Court for the District of Delaware, and
closed one hospital. During the second quarter, the bankruptcy court approved
the sale of two hospitals and the ambulatory care facility to local purchasers
in the Cleveland area. The Company's contracts with these two hospitals and the
ambulatory care facility were not accepted by the purchasers, who have elected
to employ their own pathologists. One hospital has not been sold and continues
to do business with the Company. As a result, the Company determined, using the
discounted cash flow method, that the intangible assets, including goodwill, had
no remaining fair value. Therefore, the Company wrote off the unamortized
intangible asset balance. In addition, the Company recorded approximately $545
of related charges for potentially uncollectible accounts receivable, employee
termination costs and legal fees.

During the fourth quarter of 2000, the Company recorded a pre-tax non-cash
charge of approximately $4,300 related to the impairment of certain intangible
assets. Of this charge, $3,300 related to Quest Diagnostics' ("Quest")
termination of its contract with the Company in South Florida, effective
December 31, 2000. The Company believes that some portion of this work may be
transferred by Quest to other practices owned by the Company and the Company is
implementing a marketing strategy to retain and provide services directly to
these customers in South Florida. In addition, during the fourth quarter, a
hospital in South Florida where the Company had the pathology contract,
requested proposals for its pathology services, and the Company was unsuccessful
in retaining this contract. Based upon the remaining projected cash flow from
this hospital network, the Company determined that the intangible assets were
impaired and recorded a pre-tax non-cash charge of approximately $1,000.

9.   Investment Securities

The Company accounts for investments in certain debt and equity securities under
the provisions of Statement of Financial Accounting Standards No. 115 ("SFAS No.
115"), "Accounting for Certain Debt and Equity Securities". Under SFAS No. 115,
the Company must classify its debt and marketable equity securities in one of
three categories: trading, available-for-sale, or held-to-maturity.

In September 2000, the Company made a $1,000 investment in Genomics
Collaborative, Inc ("GCI") for which it received 333,333 shares of Series D
Preferred Stock, par value $0.01. The GCI Series D Preferred Stock is
convertible into one share of common stock and redeemable after 2005 at $3.00
per share at the option of the holder. GCI is a privately held, start-up,
company which has a history of operating losses. As of December 31, 2000, it
appears that GCI has sufficient cash to fund operations for the next twelve
months. In the event that they are unable to become profitable and/or raise
additional funding, it could result in an impairment of our investment. This
available for sale security is recorded at its estimated fair value, which
approximates cost, and is classified as other assets on the Company's balance
sheet. At December 31, 2000, there were no unrealized gains or losses associated
with this investment.

10.  Due to Managed Practices

In accordance with the terms of the management service agreements, the owners of
the managed practices are entitled to a predetermined percentage of the net
operating income of their managed practice ("physician group retainage"). The
amount of the liability is calculated monthly and is to be paid by the fifteenth
day of the following month. The monthly payment amount is comprised of either
the net revenues or the cash collected from revenues during the month less any
practice expenses and management fees charged by the Company. The amounts owed
to the owners of the Managed Practices were $4,055 and $2,853 as of December 31,
2000 and 1999, respectively.

                                      F-18
<PAGE>

11.  Accounts Payable and Accrued Expenses

<TABLE>
<CAPTION>

                                                                                        December 31,
                                                                                    --------------------
Accounts payable and accrued expenses consisted of the following:                    1999         2000
                                                                                    -------      -------
<S>                                                                                 <C>          <C>
Accounts payable                                                                    $ 4,830      $12,034
Accrued compensation                                                                  7,978       12,604
Accrued acquisition costs                                                             1,739        2,332
Accrued interest                                                                        828        1,283
Income taxes payable                                                                    942        1,822
Other accrued expenses                                                                5,020        5,637
                                                                                    -------      -------
                                                                                    $21,337      $35,712
                                                                                    =======      =======
</TABLE>

12.  Merger-related charges

In connection with the Inform DX merger and other previous acquisitions, the
Company has recorded reserves for transaction costs, employee-related costs
(including severance agreement payouts) and various exit costs associated with
the consolidation of certain operations, including the elimination of duplicate
facilities and certain exit and restructuring costs.

During the fourth quarter of 2000, the Company recorded merger-related costs
totaling $6,200 ($5,102, net of tax). As part of the business restructuring, the
Company is closing certain facilities. In 1999, the Company paid $1,741 of costs
in connection with the May 1998 American Pathology Resource, Inc. ("APR")
acquisition. Payments were for various exit costs associated with the disposal
of certain operations of APR and the shutdown of the APR corporate office.

A reconciliation of the activity for the years ended December 31, 2000 and 1999
with respect to the merger-related reserves is as follows:

<TABLE>
<CAPTION>
                                    Balance             Balance       Statement of                                Balance
                               December 31,               Sheet         Operations                           December 31,
                                       1999             Charges            Charges           Payments                2000
                                       ----             -------            -------           --------                ----
<S>                                  <C>                 <C>                <C>               <C>                 <C>
Transaction costs                        --              $1,160             $4,348            $(3,782)            $ 1,726
Employee termination
 costs                                   78               1,200              1,861             (1,722)              1,417

Lease commitments
                                        394               1,974                 --               (240)              2,128
Other exit costs                        715                  --                 --               (452)                263
                                     ------              ------             ------            -------             -------
Total                                 1,187              $4,334             $6,209            $(6,196)              5,534
                                                         ======             ------            -------
Less: portion included
 in current liabilities                (275)                                                                       (3,165)
                                     ------                                                                       -------
Total included in other
 liabilities                         $  912                                                                       $ 2,369
                                     ======                                                                       =======
</TABLE>

                                      F-19
<PAGE>

<TABLE>
<CAPTION>
                                    Balance        Balance          Statement of                                 Balance
                               December 31,          Sheet            Operations                            December 31,
                                       1998        Charges               Charges          Payments                  1999
                                       ----        -------               -------          --------                  ----
<S>                                  <C>           <C>                        <C>         <C>                  <C>
Employee termination
 costs                               $  414        $  (8)                     --          $  (328)             $   78

Lease
Commitments                           1,851         (740)                     --             (717)                394
Other exit costs                      1,518         (107)                     --             (696)                715
                                     ------        -----              ----------          -------              ------
Total                                 3,783        $(855)                     --          $(1,741)              1,187
                                                   =====              ==========          =======
Less: portion included
 in current liabilities                (860)                                                                     (275)
                                     ------                                                                    ------
Total included in other
 liabilities                         $2,923                                                                    $  912
                                     ======                                                                    ======
</TABLE>

In addition, the Company plans to continue its consolidation efforts related to
its acquisition of Inform DX during the first half of 2001. As a result, the
Company expects to incur additional costs of $7,300 during this period. Of this
amount, approximately $5,400 is for employee-related costs, $1,100 is for the
consolidation of the Company's facilities in New York and eastern Pennsylvania,
and $800 is for other transaction costs related to the Inform DX acquisition .

13.  Long-term Debt

<TABLE>
<CAPTION>
                                                                               December 31,
                                                                            -------------------
Long-term debt consisted of the following:                                    1999       2000
                                                                            --------   --------
<S>                                                                         <C>        <C>
Revolving loan                                                              $163,300   $197,216
Revolving line of credit                                                       2,500         --
Note payable                                                                      73        210
Capital leases                                                                   837        683
Subordinated notes issued and assumed in connection with
  acquisitions, payable in varying amounts through 2005,
  with interest at rates of 6.5% and 9.5%                                      1,904      3,638
                                                                            --------   --------
                                                                            $168,614   $201,747
Less current portion                                                            (930)    (1,055)
                                                                            --------   --------
Long-term debt, net of current portion                                      $167,684   $200,692
                                                                            ========   ========
</TABLE>

At December 31, 2000 maturities of long-term debt were as follows:

<TABLE>
<S>                                                                                    <C>
2001                                                                                   $  1,055
2002                                                                                        430
2003                                                                                        355
2004                                                                                    197,488
2005                                                                                      2,419
                                                                                       --------
Total                                                                                  $201,747
                                                                                       ========
</TABLE>

The Company has a revolving line of credit (the "Credit Facility") with a
syndicate of banks led by Fleet National Bank, formerly Bank Boston, N.A. as
lender and agent. On April 28, 1998, the Company amended its Credit Facility.
The amended facility provided for borrowings of up to $200,000 in the form of a
revolving loan that may be used for working capital purposes (in an amount
limited to 75% of the Company's net accounts receivable, as reflected on the
Company's quarterly consolidated balance sheet) and to fund acquisitions to the
extent not otherwise used for working capital purposes.

                                      F-20
<PAGE>

On December 16, 1999, the Company amended its Credit Facility. The amended
facility provides for borrowings of up to $230,000 in the form of a revolving
loan that may be used for working capital purposes and to fund acquisitions to
the extent not otherwise used for working capital purposes. The Company must
comply with certain requirements as defined in the credit agreement to utilize
the Credit Facility to fund acquisitions.

On July 21, 2000, the Company amended its Credit Facility dated December 16,
1999 ("Amendment No. 1"). Amendment No. 1 allowed for the Company to be in
compliance with the Credit Facility by excluding non-cash charges totaling
approximately $5,200 from the calculation of the Company's consolidated
operating cash flow covenant through March 31, 2001. These charges relate to the
impairment of assets and related charges at an acquired practice in Cleveland,
Ohio as more fully discussed in Note 8 to the financial statements. The
amendment was obtained to cure a potential default that otherwise would likely
have occurred under the operating cash flow covenant contained in the Credit
Facility. In addition, Amendment No. 2 (i) increased the Company's operating
cash flow requirements under the facility for the trailing twelve months ending
December 31, 2002 and thereafter; (ii) requires that a minimum of 10% of the
purchase price of future acquisitions greater than $5,000 be in the form of the
Company's capital stock, and (iii) allowed for an investment of up to $3,000 in
Genomics Collaborative, Inc. The amendment is not expected to have a material
adverse effect on the Company's operations or strategies.

On November 29, 2000, the Company amended its Credit Facility dated December 16,
1999 ("Amendment No. 2"). Amendment No. 2 allowed for the Company to be in
compliance with the Credit Facility by excluding from the covenant calculations
cash and non-cash charges totaling approximately $17,500. These exclusions were
comprised of a one time cash transaction and restructuring charges of up to
$7,500 in connection with the acquisition of Inform DX, and nonrecurring non-
cash charges of up to $10,000, including charges resulting from an increase in
the accounts receivable reserve in connection with the acquisition of Inform DX,
and potential asset impairment charges relating to good will and other
intangibles of not more than $5,000. In addition, Amendment No. 2 (i) decreased
the Company's operating cash flow requirements under the facility for the
trailing twelve months ending December 31, 2001, and increased them thereafter;
(ii) increased the amount of allowable Capital Lease Obligations to $3,000; and
(iii) decreased the levels of acquisition purchase price used in the
documentation requirements of the lenders. The amendment was obtained to cure a
potential default for the year ended December 31, 2000 that otherwise would
likely have occurred under the operating cash flow covenant contained in the
Credit Facility.

There is the potential of $5,400 of charges in excess of the $17,500 allowed in
Amendment No. 2 which results from the formalization of the Inform DX
integration plans, and are expected to result in further synergies. These
additional charges could have caused the Company to be in technical default of
one or more of its covenants under its Credit Facility at the end of the first
quarter of 2001. On March 29, 2001, the Company and its lenders executed an
amendment ("Amendment No. 3") which excludes an additional $5,400, or $28,300,
in total, of charges from its covenant calculations. In addition, Amendment No.
3 (i) increased the Company's borrowing rate by 37.5 basis points; (ii) requires
the Company to use a minimum of 30% equity for all acquisitions; (iii) requires
the Company to use no more than 20% of consideration for acquisitions in the
form of contingent notes and; (iv) requires lender approval of all acquisitions
with a purchase price greater than $10,000. The Company will also be required to
pay an amendment fee of up to 30 basis points to those lenders which consented
to the amendment. The maximum amount of the amendment fee would be $700.

All outstanding advances under the Credit Facility are due and payable on
December 16, 2004. Interest is payable monthly at variable rates which are
based, at the Company's option, on the Agents' base rate (9.5% at December 31,
2000) or the Eurodollar rate plus a premium that is based on the Company's
quarterly ratio of total debt to cash flow. The amended Credit Facility also
requires a commitment fee to be paid quarterly equal to 0.50% of the annualized
unused portion of the total commitment. The Company has used a portion of the
funds available under the amended Credit Facility to refinance previously
outstanding indebtedness, to fund acquisitions and for working capital purposes.
The Company intends to use the remaining availability for its acquisition
program and working capital.

In May 2000, the Company entered into three interest rate swaps transactions
with an effective date of October 5, 2000, variable maturity dates, and a
combined notional amount of $105 million. These interest rate swap transactions
involve the exchange of floating for fixed rate interest payments over the life
of the agreement without the exchange of the underlying principal amounts. The
differential to be paid or received is accrued and is recognized as an
adjustment to interest expense. These agreements are indexed to 30 day LIBOR.
The following table summarizes the terms of the swaps:

                                      F-21
<PAGE>

<TABLE>
<CAPTION>
  Notional Amount(in millions)            Fixed Rate              Term in Months           Maturity
<S>                               <C>                          <C>                   <C>
             $45.0                           7.604%                    24                  10/07/02
             $30.0                           7.612%                    36                  10/06/03
             $30.0                           7.626%                    48                  10/05/04
</TABLE>

The amended Credit Facility contains covenants which, among other things,
require the Company to maintain certain financial operating ratios and impose
certain limitations or prohibitions on the Company with respect to the
incidence, guaranty or assumption of indebtedness, the payment of dividends,
cash distributions, new debt issuance, sale of assets, leasing commitments and
annual capital expenditures, and contains provisions which preclude mergers and
acquisitions under certain circumstances. All of the Company's assets are
pledged as collateral under the Credit Facility. The Company believes that it is
in compliance with all of the covenants at December 31, 2000.

On February 2, 1998, the Company entered into a revolving line of credit
agreement with Nations Bank providing available borrowings up to $5,000 that may
be used for general corporate purposes including working capital and the funding
of cash for acquisitions or affiliations with pathology practices. This
revolving line of credit was increased to $9,000 in September 2000. The balance
of this revolving line of credit was paid in full on December 1, 2000.

Note Payable to Bank

In October 1999, the Company assumed a long-term obligation pursuant to a
promissory note agreement with a bank in connection with the Columbus Pathology
Associates acquisition. The obligation is evidenced by an installment note
bearing interest at fixed rate of 9.75% and maturing in 2004. The note is
secured by certain assets of the acquired practice.

Letters of Credit

As of December 31, 2000, the Company had letters of credit outstanding totaling
$1,186. The letters of credit secure payments under certain operating leases and
expire at various dates in 2001 and 2002. Some of the letters of credit
automatically decline in value over various lease terms. The letters of credit
have annual fees averaging 1.7%.

14.  Lease Commitments

The Company leases various office and laboratory space, and certain equipment
pursuant to operating lease agreements. The following information includes the
related party leases discussed in Note 19. Future minimum lease commitments
consisted of the following at December 31, 2000:

<TABLE>
<CAPTION>
<S>                                                    <C>
     2001                                              $ 4,203
     2002                                                3,915
     2003                                                3,265
     2004                                                2,121
     2005                                                2,003
     Thereafter                                          4,690
                                                       -------
                                                       $20,197
                                                       =======
</TABLE>

In addition, certain owners of the Managed Practices are lessees of various
equipment, auto and facility operating leases that are used in the operations of
the business. Future payments under these leases are $4,412 of which the Company
is responsible for their corresponding share as defined in the management
service agreements. The Company's obligations, based upon their management fee
percentage, are $705. In the event of termination of a management service
agreement, any related lease obligations are also terminated or assumed by the
Managed Practice.

The Company has entered into certain noncancelable subleases that reduce its
total commitments under operating leases by $186.

Owned practices' rent expense under operating leases for the years ended
December 31, 1998, 1999 and 2000 was $1,687, $2,228 and $4,104 respectively.

                                      F-22
<PAGE>

15.  Option Plan

The Company's 1996 Stock Option Plan (the "Option Plan") provides for the grant
of options to purchase shares of common stock to key employees and others. The
plan provides that the option price shall not be less than the fair market value
of the shares on the date of the grant. All options granted under the Option
Plan have 10 year terms and vest and become exercisable at the rate of 20% a
year, following the date of grant. As part of the Inform DX acquisition, the
Company assumed additional two option plans ("Additional Plans"). Options
granted under the Additional Plans have varying exercisable rates.

The Company's Director Option Plan provides for the grant of options to purchase
shares of common stock to Directors who are not employees of the Company. All
options granted under the Director Option Plan have 10 year terms and are
exercisable during the period specified in the agreement evidencing the grant of
such Director Option. At December 31, 2000, 35,000 options have been granted
under the Director Option Plan.

At December 31, 2000, 2,232,000 shares of common stock are reserved for issuance
pursuant to options granted under the Option Plan, the Director Option Plan and
the Additional Plans.

The Company has elected to follow Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB 25"), and the related
interpretations in accounting for its employee stock options because, as
discussed below, the alternative fair value accounting provided for under SFAS
No. 123, "Accounting for Stock-Based Compensation," requires use of option
valuation models that were not developed for use in valuing employee stock
options. Under APB 25, because the exercise price of the Company's employee
stock options approximates the fair value of the underlying stock on the date of
grant, no compensation expense is recognized.

Pro forma information regarding net income and earnings per share is required by
SFAS No. 123, and has been determined as if the Company had accounted for its
employee stock options under the fair value method of that Statement. The fair
value for these options was estimated at the date of grant using the Black-
Scholes Option Pricing Model with the following weighted-average assumptions for
1998, 1999 and 2000:

<TABLE>
<CAPTION>
                                                             1998     1999     2000
<S>                                                         -----    -----    -----
Risk free interest rate                                     <C>      <C>      <C>
Dividend yield                                                6.5%     6.5%     6.5%
Volatility factors                                             --       --       --
Weighted average life (years)                               107.0%   120.0%   137.0%
                                                              4.1      4.1      4.2
</TABLE>

Using the Black-Scholes Option Pricing Model, the estimated weighted-average
fair value per option granted in 1998, 1999 and 2000 were $10.65, $6.28 and
$6.92 respectively

The pro forma net income per common share assuming the amortization of the
estimated fair values over the option vesting period and diluted earnings per
common share, had the fair value method of accounting for stock options been
used, would have been as follows:

<TABLE>
<CAPTION>
                                                               1998     1999    2000
                                                            -------  -------  ------
<S>                                                         <C>      <C>      <C>
Pro forma net income attributable to common shareholders    $16,754  $19,612  $8,018
Pro forma diluted earnings per common share                 $  0.78  $  0.87  $ 0.33
</TABLE>

The Black-Scholes Option Pricing Model was developed for use in estimating the
fair value of traded options which have no vesting restrictions and are fully
transferable. In addition, option valuation models require highly subjective
assumptions including the expected stock price volatility. Because the Company's
employee stock options have characteristics significantly different than those
of traded options, and because changes in the assumptions can materially affect
the fair value estimate, in management's opinion, the existing models may not
necessarily provide a reliable single measure of the fair value of its employee
stock options.

                                      F-23
<PAGE>

A summary of the status of the option plans as of and for the changes during
each of the three years in the period ended December 31, 2000 is presented
below:

<TABLE>
<CAPTION>
                                                Option Price Per Share
                                   Number       ----------------------
                                 of Shares    Low        High      Weighted
                                 ----------  ------   ---------    --------
<S>                              <C>         <C>        <C>        <C>
Outstanding December 31, 1997    1,215,142   $ 1.11     $ 16.75    $  5.78
Granted in 1998                    254,050    14.06       14.06      14.06
Granted in 1998                      2,000    16.13       16.13      16.13
Granted in 1998                      1,000    11.38       11.38      11.38
Granted in 1998                      8,971     3.74        3.74       3.74
Granted in 1998                      1,461     6.22        6.22       6.22
Granted in 1998                      4,017    11.20       11.20      11.20
Granted in 1998                        201    18.67       18.67      18.67
Granted in 1998                     12,974    40.46       40.46      40.46
Cancelled in 1998                  (12,900)    8.33       16.75      11.45
Exercised in 1998                  (27,560)    8.33       10.00       8.98
                                 ---------
Outstanding December 31, 1998    1,459,356     1.11       40.46       7.46
Granted in 1999                     26,000     9.31        9.31       9.31
Granted in 1999                    259,500     7.63        7.63       7.63
Granted in 1999                      5,000     9.56        9.56       9.56
Granted in 1999                      2,000     9.16        9.16       9.16
Granted in 1999                      2,000     9.06        9.06       9.06
Granted in 1999                      9,000     7.75        7.75       7.75
Granted in 1999                     49,727    15.56       15.56      15.56
Granted in 1999                      3,736    40.46       40.46      40.46
Cancelled in 1999                  (41,800)   10.00       16.75      10.58
Exercised in 1999                   (8,000)    1.11        1.11       1.11
                                 ---------
Outstanding December 31, 1999    1,766,519     1.11       40.46       7.76
Granted in 2000                     50,000     8.13        8.13       8.13
Granted in 2000                    356,000     7.63        7.63       7.63
Granted in 2000                     17,000    16.88       16.88      16.88
Granted in 2000                     73,703    41.58       41.58      41.58
Cancelled in 2000                  (42,250)    7.63       14.06       9.64
Exercised in 2000                 (260,521)    1.11       15.56       5.96
                                 ---------
Outstanding December 31, 2000    1,960,451   $ 1.11     $ 41.58    $  9.30
                                 =========
</TABLE>

                                      F-24
<PAGE>

The following table summarizes the information about options outstanding at
December 31, 2000:

<TABLE>
<CAPTION>
                                    Options Outstanding                             Options Exercisable
          -----------------------------------------------------------------------  ---------------------
                                                          Weighted
                                                           Average       Weighted               Weighted
                                                          Remaining      Average                Average
                    Range of               Number     Contractual Life   Exercise    Number     Exercise
                 Exercise Prices         Outstanding     (in years)       Price    Exercisable   Price
          -----------------------------  -----------  -----------------  --------  -----------  --------
                 <S>                       <C>                     <C>     <C>         <C>        <C>
                     $ 1.11                  123,600               3.6     $ 1.11      123,600    $ 1.11
                     $ 1.67                  360,011               5.1     $ 1.67      288,009    $ 1.67
                     $ 3.74                   11,702               7.1     $ 3.74        9,891    $ 3.74
                     $ 6.22                    1,461               7.3     $ 6.22        1,461    $ 6.22
                     $ 7.63                  583,500               8.9     $ 7.63       40,800    $ 7.63
                     $ 7.75                    9,000               8.9     $ 7.75        1,800    $ 7.75
                     $ 8.13                   50,000               9.0     $ 8.13           --        --
                     $ 8.33                  111,720               5.5     $ 8.33       69,600    $ 8.33

                     $ 9.06                    2,000               8.9     $ 9.06          400    $ 9.06
                     $ 9.31                   26,000               8.2     $ 9.31        5,200    $ 9.31
                     $ 9.56                    4,000               8.6     $ 9.56           --        --
                     $10.00                  236,200               6.5     $10.00      128,800    $10.00
                     $11.20                    4,017               7.4     $11.20        2,411    $11.20
                     $11.65                      600               7.5     $11.65           --        --
                     $14.06                  228,280               7.4     $14.06       91,000    $14.06
                     $15.56                   49,246               8.9     $15.56       23,420    $15.56
                     $16.13                    2,000               7.4     $16.13          800    $16.13
                     $16.63                    6,000               6.9     $16.63        3,600    $16.63
                     $16.75                   43,500               6.9     $16.63       26,100    $16.63
                     $16.88                   17,000               9.8     $16.88           --        --
                     $18.68                      201               7.5     $18.68          201    $18.68
                     $40.46                   16,710               7.8     $40.46       11,658    $40.46
                     $41.58                   73,703               8.5     $41.58       73,703    $41.58
                                           ---------                                   -------
                 $1.11 - $41.58            1,960,451               7.1     $ 9.30      902,454    $ 9.56
                                           =========                                   =======
</TABLE>

As of December 31, 1998 and 1999 exercisable options were 499,845 and 860,366,
respectively.

Warrants to purchase 38,867 and 16,226 shares of common stock were outstanding
at December 31, 1999 and 2000, respectively, at exercise prices ranging from
$0.01 to $0.30 per share. These warrants were issued in conjunction with certain
indebtedness incurred by the Company. Holders of warrants do not have voting
rights or any other rights as a shareholder of the Company.

In connection with indebtedness issued by the Company in 1997 (the "Junior
Notes"), the Company issued warrants to purchase 16,066 shares of the Company's
common stock to the holders of the Junior Notes. For each $10 Junior Note, the
holder was issued a warrant to purchase 161 shares of common stock at $0.01 per
share (the "Junior Warrants"). The Junior Warrants expire on December 24, 2002.
A value of approximately $58 was allocated to these warrants which was included
in deferred financing costs and additional paid-in capital in the accompanying
consolidated financial statements.

                                      F-25
<PAGE>

16.  Redeemable Preferred Stock

This footnote describes the transactions regarding Inform DX's Series A
Redeemable Preferred Stock (the "Preferred Stock"). All share amounts have been
converted using the conversion ratio for the pooling transaction.

In 1998, Inform DX issued 395,471 shares of Preferred Stock at $40.46 per share.
The Preferred Stock was convertible into common stock at the option of the
holder. The conversion rate for the Preferred Stock was one share of common
stock per share of Preferred Stock. The Preferred Stock was redeemable after May
20, 2003 at $40.46 per share. Net proceeds from the Preferred Stock sale were
approximately $15,298 and were used to repay long-term obligations of the Inform
DX and certain indebtedness assumed, including accrued interest. Proceeds
received in excess of retired indebtedness were used to provide general working
capital and funding for Company acquisitions.

Offering costs and expenses of approximately $702 were recorded against the
aggregate preference value of the Preferred Stock and were being accreted over
five years. Accretion for the period ended December 31, 2000 and 1999 was
approximately $65 and $131 respectively.

The Preferred Stock voted on an as converted basis with the holders of Inform
DX's common stock. The Preferred Stock contained a liquidation preference over
all other classes of Inform DX's capital stock. Furthermore, holders of the
Preferred Stock may have elected to treat certain transactions as liquidation
events. Subject to certain conditions, the Preferred Stock also contained anti-
dilution and preemptive rights. Each holder of shares of the Preferred Stock was
entitled to receive, when and as declared by the Board of Directors, if at all,
dividends on a parity with each holder of shares of common stock.

On June 30, 2000, Inform DX acquired Pathsource, Inc. in a stock for stock
transaction accounted for as a purchase business combination. In connection with
this acquisition, Inform DX provided for an induced conversion of the Preferred
Stock. The induced conversion resulted in the issuance of 642,640 shares of
common stock. Inform DX estimated, based on a third party valuation, the fair
market value of its common stock at June 30, 2000 to be $6.22 per share. Based
on this valuation, Inform DX recorded a charge for the induced conversion of
approximately $1,500, or $6.22 per share times the additional common shares
issued of 247,169.

17.  Employee Benefit Plans

Effective July 1, 1997, the Company consolidated its previous 401(k) plans into
a new qualified 401(k) retirement plan (the "401(k) Plan") covering
substantially all eligible employees as defined in the 401(k) plan. The new 401
(k) Plan requires employer matching contributions equal to 50% (25% prior to
July 1, 2000) of the employees' contributions up to a maximum of one thousand
dollars per employee. The Company expensed matching contributions aggregating
$379, $451 and $648 to the new plan in 1998, 1999 and 2000, respectively. Also,
in connection with acquisitions, the Company assumes the obligations under
certain defined contribution plans which cover substantially all eligible
employees of the acquired practices. The Company has not made any contributions
from the dates of acquisition through December 31, 2000.

During 1999, the Company introduced a Supplemental Employee Retirement Plan
("SERP") which covers only selected employees. The SERP is a non-qualified
deferred compensation plan which was established to aid in the retention of the
non-selling physicians and other key employees. In 1999, the eligible
participants were allowed to defer up to ten thousand dollars of compensation
and/or eligible bonuses. If the subscription to the plan fell below an
established deferral range, the participating individuals were allowed to defer
additional funds. The Company may also make discretionary contributions to the
SERP. Employee and employer contributions to the SERP for the years ended
December 31, 1999 and 2000, were $428 and $20, and $484 and $76, respectively.

The Company also sponsors certain defined contribution plans for substantially
all employees of the former Inform DX who are at least 21 years old, have been
employed by the Company for at least one year and have completed 1,000 hours of
service. These plans include a 401(k)/profit sharing plan and a money purchase
pension plan. Under the 401(k)/profit sharing plan, employees may contribute up
to 15% of their qualifying salary on a pre-tax basis, subject to Federal income
tax limitations. In 1998, the Company matched 100% of the employee contributions
up to 3% of employee contributions. In addition, the Company contributed 0.5% of
qualifying compensation as a profit sharing distribution and 3% of qualifying
compensation to the money purchase pension plan.

                                      F-26
<PAGE>

In 1999, the Company matched 100% of the first 3% of employee contributions and
50% of employee contributions between 3% and 5%. The amount expensed under all
plans for Company contributions was approximately $536 and $765 in 1999 and
2000, respectively.

18.  Commitments and Contingencies

     During the ordinary course of business, the Company has become and may in
the future become subject to pending and threatened legal actions and
proceedings. The Company may have liability with respect to its employees and
its pathologists as well as with respect to hospital employees who are under the
supervision of the hospital based pathologists. The majority of the pending
legal proceedings involve claims of medical malpractice. Most of these relate to
cytology services. These claims are generally covered by insurance. Based upon
investigations conducted to date, the Company believes the outcome of such
pending legal actions and proceedings, individually or in the aggregate, will
not have a material adverse effect on the Company's financial condition, results
of operations or liquidity. If the Company is ultimately found liable under
these medical malpractice claims, there can be no assurance that the Company's
medical malpractice insurance coverage will be adequate to cover any such
liability. The Company may also, from time to time, be involved with legal
actions related to the acquisition of and affiliation with physician practices,
the prior conduct of such practices, or the employment (and restriction on
competition of) physicians. There can be no assurance any costs or liabilities
for which the Company becomes responsible in connection with such claims or
actions will not be material or will not exceed the limitations of any
applicable indemnification provisions or the financial resources of the
indemnifying parties.

Liability Insurance -- The Company is insured with respect to general liability
on an occurrence basis and medical malpractice risks on a claims made basis. The
Company records an estimate of its liabilities for claims incurred but not
reported. Such liabilities are not discounted. Effective July 1, 1999, the
Company changed its medical malpractice carrier and the Company is currently in
a dispute with its former insurance carrier on an issue related to the
applicability of surplus insurance coverage. The Company believes that an
unfavorable resolution, if any, of such dispute will not have a material adverse
effect on the Company's financial position or results of operations.

Healthcare Regulatory Environment and Reliance on Government Programs -- The
healthcare industry in general, and the services that the Company provides, are
subject to extensive federal and state laws and regulations. Additionally, a
significant portion of the Company's net revenue is from payments by government-
sponsored health care programs, principally Medicare and Medicaid, and is
subject to audit and adjustments by applicable regulatory agencies. Failure to
comply with any of these laws or regulations, the results of increased
regulatory audits and adjustments, or changes in the interpretation of the
coding of services or the amounts payable for the Company's services under these
programs could have a material adverse effect on the Company's financial
position and results of operations.

Internal Revenue Service Examination -- The Internal Revenue Service (the "IRS")
conducted an examination of the Company's federal income tax returns for the tax
years ended December 31, 1996 and 1997 and concluded during 2000 that no changes
to the tax reported needed to be made. Although the Company believes it is in
compliance with all applicable IRS rules and regulations, if the IRS should
determine the Company is not in compliance in any other years, it could have a
material adverse effect on the Company's financial position and results of
operations.

Employment Agreements -- The Company has entered into employment agreements with
certain of its management employees, which include, among other terms,
noncompetitive provisions and salary benefits continuation.

19.  Related Party Transactions

Operating Leases -- The Company leases laboratory and administrative facilities
used in the operations of eight practices from entities beneficially owned by
some of the Company's common stockholders. The terms of the leases expire from
2000 to 2003 and some contain options to renew for additional periods. Lease
payments made under leases with related parties were $478, $644 and $1,140 in
1998, 1999 and 2000, respectively.

20.  Income Taxes

The provision for income taxes for the years ended December 31, 1998, 1999 and
2000 consists of the following:

                                      F-27
<PAGE>


<TABLE>
<CAPTION>
                                                         Year ended December 31,
                                                     ------------------------------
                                                       1998       1999       2000
                                                     --------   --------   --------
<S>                                                  <C>        <C>        <C>
Current:
 Federal                                             $ 15,177   $ 17,465   $ 20,958
 State                                                  2,371      2,015      2,227
                                                     --------   --------   --------
    Total current provision                            17,548     19,480     23,185
                                                     --------   --------   --------
Deferred:
 Federal                                               (3,234)    (1,799)    (8,242)
 State                                                   (373)      (207)      (875)
                                                     --------   --------   --------
    Total deferred benefit                             (3,607)    (2,006)    (9,117)
                                                     --------   --------   --------
    Total provision for income taxes                 $ 13,941   $ 17,474   $ 14,068
                                                     ========   ========   ========
</TABLE>

The effective tax rate on income before income taxes is reconciled to the
statutory federal income tax rate as follows:


<TABLE>
<CAPTION>
                                                         Year ended December 31,
                                                     ------------------------------
                                                       1998       1999       2000
                                                     --------   --------    -------
<S>                                                      <C>        <C>        <C>
Statutory federal rate                                   35.0%      35.0%      35.0%
State income taxes, net of federal
 income tax benefit                                       4.0        4.0        3.7
Non-deductible items, primarily amortization
 of goodwill                                              2.8        3.3        8.6
Non-deductible items, merger-related charges              0.0        0.0        4.8
Other                                                     1.5        1.2       (0.3)
                                                     --------   --------    -------
                                                         43.3%      43.5%      51.8%
                                                     ========   ========    =======
</TABLE>

The following is a summary of the deferred income tax assets and liabilities as
of December 31, 1999 and 2000:


<TABLE>
<CAPTION>
                                                        December 31,
                                                     -------------------
                                                       1999       2000
                                                     --------   --------
<S>                                                  <C>        <C>
Deferred tax assets (short term):
 Allowance for doubtful accounts                     $  6,093   $  8,479
 Accrued liabilities                                      884      1,499
                                                     --------   --------
   Deferred tax assets (short term)                     6,977      9,978
                                                     --------   --------
Deferred tax liabilities (short term):
 481 (a) adjustment                                    (1,571)    (1,385)
 Other                                                     (1)        --
                                                     --------   --------
 Deferred tax liabilities (short term)                 (1,572)    (1,385)
                                                     --------   --------
    Net short term deferred tax assets                  5,405      8,593
                                                     --------   --------
Deferred tax assets (long-term):
 Net operating loss                                     5,105      6,955
 Other                                                     --      1,255
                                                     --------   --------
 Deferred tax assets (long-term)                        5,105      8,210
   Less: valuation allowance                           (3,004)    (3,548)
                                                     --------   --------
   Net deferred tax assets (long-term)                  2,101      4,662
                                                     --------   --------
Deferred tax liabilities (long-term):
 Change from cash to accrual basis of accounting
  by the acquisitions                                  (1,355)    (1,178)
 Intangible assets acquired                           (62,837)   (67,059)
 Property and equipment                                  (430)      (471)
                                                     --------   --------
   Deferred tax liabilities (long-term)               (64,622)   (68,708)
                                                     --------   --------
    Net long-term deferred tax liability              (62,521)   (64,046)
                                                     --------   --------
Net deferred tax assets / (liabilities)              $(57,116)  $(55,453)
                                                     ========   ========
</TABLE>


                                      F-28
<PAGE>

21.  Earnings Per Share

Earnings per share are computed and presented in accordance with SFAS No. 128,
Earnings Per Share. Basic earnings per share excludes dilution and is computed
by dividing income or loss attributable to common stockholders by the weighted-
average number of common shares outstanding for the period. Diluted earnings per
share reflects the potential dilution that could occur if securities or other
contracts to issue common stock were exercised or converted into common stock or
resulted in the issuance of common stock that then shared in the earnings of the
entity. The effects of Redeemable Preferred Stock are calculated using the as if
converted method and the effects of stock options are calculated using the
treasury stock method.

<TABLE>
<CAPTION>
                                                                                        Years ended December 31,
                                                                                 --------------------------------------
                                                                                   1998          1999            2000
                                                                                 -------        -------        --------
<S>                                                                              <C>            <C>            <C>
Earnings Per Common Share:
   Net income attributable to common shareholders                                $18,168        $22,580         $11,488
                                                                                 -------        -------        --------

   Basic earnings per common share                                               $  0.87        $  1.03         $  0.49
                                                                                 -------        -------        --------
   Diluted earnings per common share                                             $  0.84        $  1.00         $  0.47
                                                                                 -------        -------        --------

   Basic weighted average shares outstanding                                      20,911         21,984          23,473
   Effect of dilutive stock options and contingent shares                            699            532             764
                                                                                 -------        -------        --------
   Diluted weighted average shares outstanding                                    21,610         22,516          24,237
                                                                                 =======        =======        ========
</TABLE>

Options to purchase 333,405 shares,774,590 shares and 453,818 shares of common
stock which were outstanding at December 31, 1998, 1999 and 2000, respectively,
have been excluded from the calculation of diluted earnings per share for the
respective years because their effect would be anti-dilutive. In addition,
395,471 shares of Preferred Stock were excluded from the calculation of diluted
earnings per share for the years ended December 31, 1998 and 1999 because their
effect would be anti-dilutive. Warrants to purchase shares of 41,116 and 38,867
for the years December 31, 1998 and 1999, respectively, were excluded from the
calculation of diluted earnings per share because their effect would be anti-
dilutive.

22.  Supplemental Cash Flow Information

The following supplemental information presents the non-cash impact on the
balance sheet of assets acquired and liabilities assumed in connection with
acquisitions consummated during the years ended December 31, 1998, 1999 and
2000:

<TABLE>
<CAPTION>
                                                                             Years Ended December 31,
                                                                          ------------------------------
                                                                            1998       1999       2000
                                                                          --------   --------   --------
<S>                                                                       <C>        <C>        <C>
Assets acquired                                                           $ 98,263   $ 74,745   $ 64,633
Liabilities assumed                                                        (24,543)   (19,850)   (19,996)
Common stock issued                                                        (16,226)    (3,149)   (12,180)
                                                                          --------   --------   --------
Cash paid for acquisitions                                                  57,494     51,746     32,457
Less cash acquired                                                            (789)    (1,541)    (6,955)
                                                                          --------   --------   --------
  Net cash paid for acquisitions                                            56,705     50,205     25,502
Costs related to completed and pending acquisitions                          3,767      1,438       (573)
                                                                          --------   --------   --------
Cash paid for acquisitions and acquisition costs, net of cash acquired    $ 60,472   $ 51,643   $ 24,929
                                                                          ========   ========   ========
</TABLE>

23.  Preferred Share Purchase Rights Plan

On April 8, 1999, the Board of Directors of the Company adopted a Preferred
Share Purchase Rights Plan (the "Rights Plan") and, in connection therewith,
declared a dividend distribution of one preferred share purchase right ("Right")
on each outstanding share of the Company's common stock to shareholders of
record at the close of business on April 19, 1999. The

                                      F-29
<PAGE>

Rights will expire on April 8, 2009. The adoption of the Rights Plan and the
distribution of the Rights is not dilutive, does not affect reported earnings
per share, and is not taxable to shareholders.

Subject to the terms of the Rights Plan, each Right entitles the registered
holder to purchase from the Company one one-thousandth of a share of the
Company's Series A Junior Participating Preferred Stock (the "Preferred
Shares"). Each Right has an initial exercise price of $45.00 for one one-
thousandth of a Preferred Share (subject to adjustment). The Rights will be
exercisable only if a person or group acquires 15% or more of the Company's
common stock or announces a tender or exchange offer the consummation of which
would result in ownership by a person or group of 15% or more of the common
stock. Upon any such occurrence, each Right will entitle its holder (other than
such person or group of affiliated or associated persons) to purchase, at the
Right's then current exercise price, a number of the Company's common shares
having a market value of twice such price.

24.  Segment Reporting

The Company has two reportable segments, Owned and Managed practices. The
segments were determined based on the type of service and customer. Owned
practices provide anatomic pathology services to hospitals and referring
physicians, while under the management relationships, the Company provides
management services to the affiliated physician groups. The accounting policies
of the segments are the same as those described in the summary of accounting
policies. The Company evaluates performance based on revenue and income before
amortization of intangible, merger-related charges, asset impairment and related
charges, interest expense, other income and expense and income taxes ("Operating
Income"). In addition to the business segments above the Company evaluates
certain corporate expenses which are not allocated to the business segments.

The following is a summary of the financial information for the business
segments and corporate.

<TABLE>
<CAPTION>
Owned                                                                    1998                   1999                  2000
- -----                                                                    ----                   ----                  ----
<S>                                                                  <C>                   <C>                    <C>
Net patient service revenue                                          $177,304               $233,269              $308,365
Operating income                                                       60,282                 73,676                94,346
Segment assets                                                        108,941                139,791               250,814

Managed
- -------
Net management service revenue                                        $16,012                $24,163               $21,729
Operating income (loss)                                                 2,731                  4,299                  (304)
Segment assets                                                         14,622                 15,533                18,723

Corporate
- ---------
Operating (expense)                                                  $(12,804)              $(15,676)             $(19,789)
Segment assets                                                        292,763                351,138               330,143
Elimination of Intercompany Accounts                                  (25,913)               (27,566)              (37,514)
</TABLE>

25.  Subsequent Events

Contingent Note Payments -- Subsequent to December 31, 2000, the Company paid
approximately $17,590 on contingent notes issued in connection with
acquisitions.

26.  Quarterly Results of Operations (unaudited)

The following table presents certain unaudited quarterly financial data for each
of the quarters in the years ended December 31, 1999 and 2000. This information
has been prepared on the same basis as the Consolidated Financial Statements and
includes, in the opinion of the Company, all adjustments (consisting of only
normal recurring adjustments) necessary to present fairly the quarterly results
when read in conjunction with the Consolidated Financial Statements and related
Notes thereto. The operating results for any quarter are not necessarily
indicative of results for any future period or for the full year. Adjustments
have been made to the quarterly financial statements to reflect the acquisition
of Inform DX, which was accounted for as a pooling of interest, as more further
described in Note 3, Mergers and Acquisitions. These adjustments are reflected
in all line items below and for all quarters presented except the fourth quarter
of 2000.

                                      F-30
<PAGE>

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                 1999 Calendar Quarters                        2000 Calendar Quarters
                                                ------------------------                      ------------------------
                                       First      Second        Third      Fourth    First      Second        Third      Fourth
                                      --------  -----------  -----------  --------  --------  -----------  -----------  --------
<S>                                   <C>          <C>          <C>       <C>       <C>          <C>          <C>       <C>
Net patient service revenue           $52,336      $55,406      $59,866   $65,661   $68,888      $74,372      $79,650   $85,455
Management service revenue              5,581        6,053        6,209     6,320     6,155        6,562        6,871     2,141
                                      -------      -------      -------   -------   -------      -------      -------   -------
     Net revenue                       57,917       61,459       66,075    71,981    75,043       80,934       86,521    87,596
                                      -------      -------      -------   -------   -------      -------      -------   -------
Operating costs and expenses:
 Cost of services                      26,950       28,377       31,638    35,720    36,950       38,826       42,415    45,199
 Selling, general and
  administrative expense               11,140       11,295       12,190    12,534    13,141       14,285       15,234    15,751
 Provision for doubtful accounts        5,963        6,578        6,005     6,743     7,103        8,349        8,868     9,720
 Amortization expense                   2,757        2,947        3,420     3,703     3,837        3,897        4,043     4,395
 Merger-related charges (1)                --           --           --        --        --           --           --     6,209
 Asset impairment and
  related charges (2)                      --           --           --        --        --        5,245           --     4,317
                                      -------      -------      -------   -------   -------      -------      -------   -------
    Total                              46,810       49,197       53,253    58,700    61,031       70,602       70,560    85,591
                                      -------      -------      -------   -------   -------      -------      -------   -------
Income from operations                 11,107       12,262       12,822    13,281    14,012       10,332       15,961     2,005
Interest expense                       (1,973)      (2,175)      (2,580)   (2,845)   (3,418)      (3,558)      (3,657)   (4,743)
Other income (expense), net                55           47           95        89        63           50           91        22
                                      -------      -------      -------   -------   -------      -------      -------   -------
Income (loss) before income taxes       9,189       10,134       10,337    10,525    10,657        6,824       12,395    (2,716)
Provision for income taxes              4,057        4,394        4,540     4,483     4,559        3,852        5,159       498
                                      -------      -------      -------   -------   -------      -------      -------   -------
Net income                              5,132        5,740        5,797     6,042     6,098        2,972        7,236    (3,214)
Induced conversion and accretion
  of redeemable preferred stock           (33)         (33)         (33)      (32)      (34)      (1,570)          --        --
                                      -------      -------      -------   -------   -------      -------      -------   -------
Net income attributable to common
  stockholders                        $ 5,099      $ 5,707      $ 5,764   $ 6,010   $ 6,064      $ 1,402      $ 7,236   $(3,214)
                                      =======      =======      =======   =======   =======      =======      =======   =======
Per share data:
 Basic earnings per common share         $.23         $.26         $.26      $.27     $. 27         $.06         $.30     $(.13)
                                      =======      =======      =======   =======   =======      =======      =======   =======
 Diluted earnings per common share       $.23         $.26         $.25      $.26     $. 27         $.06         $.29     $(.13)
                                      =======      =======      =======   =======   =======      =======      =======   =======
</TABLE>

(1)  In connection with the Inform DX merger, the Company recorded $6,209 of
     costs as they related to transaction fees, change in control payments and
     various exit costs associated with the consolidation of certain operations.

(2)  In connection with the loss of two hospital contracts and an ambulatory
     care facility contract in Cleveland, Ohio, the Company recorded a non-
     recurring charge of $5,245 in the second quarter of 2000. In connection
     with Quest Diagnostics termination of its contract in South Florida and the
     loss of a renewable contract with a hospital in South Florida, the Company
     recorded a non-recurring charge of $4,317 in the fourth quarter of 2000.
     The charge was based upon the remaining projected cash flows from these
     contracts in which the Company determined that the intangible assets that
     were recorded from acquisitions in these areas had been impaired.

Certain reclassifications have been made to the quarterly consolidated
statements of operations to conform to the annual presentations.

                                      F-31
<PAGE>

                                 Exhibit Index

Ex #                          Exhibit Description

  2.2     Agreement and Plan of Merger by and among Ameripath, Inc. AMP Merger
          Corp., and Pathology Consultants of America, Inc. (D/B/A Inform DX),
          dated as of November 7, 2000

10.45     Amendment No. 2, dated November 29, 2000, to the Amended and Restated
          Credit Agreement dated as of December 16, 1999, among AmeriPath, Inc.,
          certain of its subsidiaries, Fleet National Bank (formerly BankBoston
          N.A.) and certain other lenders

10.46     Registration Rights Agreement, dated November 30, 2000, among the
          Company and PCA's Shareholders and Warrant Holders

 21.1     Subsidiaries of AmeriPath

 23.1     Independent Auditors' Consent of Deloitte & Touche LLP

 23.2     Independent Auditors' Consent of Ernst & Young LLP

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2.2
<SEQUENCE>2
<FILENAME>0002.txt
<TEXT>

                                                                     EXHIBIT 2.2

  ===========================================================================

                          AGREEMENT AND PLAN OF MERGER

                                  BY AND AMONG

                                AMERIPATH, INC.

                               AMP MERGER CORP.,

                                      AND

                     PATHOLOGY CONSULTANTS OF AMERICA, INC.
                               (D/B/A INFORM DX)

                          Dated as of November 7, 2000

  ===========================================================================
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                       PAGE
<S>                                                                                                    <C>
ARTICLE 1   TRANSACTIONS AND TERMS OF MERGER...........................................................   1
- ---------   --------------------------------
       1.1  Merger.....................................................................................   1
       ---  ------
       1.2  Time and Place of Closing..................................................................   2
       ---  -------------------------
       1.3  Effective Time.............................................................................   2
       ---  --------------
ARTICLE 2   TERMS OF MERGER............................................................................   2
- ---------   ---------------
       2.1  Charter....................................................................................   2
       ---  ------
       2.2  Bylaws.....................................................................................   2
       ---  ------
       2.3  Officers and Directors.....................................................................   2
       ---  ----------------------
       2.4  Tax-Free Reorganization....................................................................   2
       ---  -----------------------
       2.5  Pooling Treatment..........................................................................   2
       ---  -----------------
ARTICLE 3   MANNER OF CONVERTING SHARES................................................................   2
- ---------   ---------------------------
       3.1  Conversion of Shares.......................................................................   2
       ---  --------------------
       3.2  Anti-Dilution Provisions...................................................................   3
       ---  ------------------------
       3.3  Shares Held by the Company.................................................................   3
       ---  --------------------------
       3.4  Fractional Shares..........................................................................   3
       ---  -----------------
       3.5  Conversion of Stock Options and Warrants...................................................   3
       ---  ----------------------------------------
       3.6  Dissenting Stockholders....................................................................   5
       ---  -----------------------
       3.7  Escrow; Shareholders' Representative.......................................................   5
       ---  ------------------------------------
ARTICLE 4   EXCHANGE OF SHARES.........................................................................   6
- ---------   ------------------
       4.1  Deposit of Certificates with Transfer Agent................................................   6
       ---  -------------------------------------------
       4.2  Exchange Procedures........................................................................   6
       ---  -------------------
       4.3  Distributions with Respect to Unexchanged Shares...........................................   7
       ---  ------------------------------------------------
       4.4  Rights of Former IDX Owners................................................................   7
       ---  ---------------------------
       4.5  No Fractional Shares.......................................................................   7
       ---  --------------------
       4.6  Termination of Exchange Fund...............................................................   7
       ---  ----------------------------
       4.7  No Liability...............................................................................   8
       ---  ------------
       4.8  Investment of Exchange Fund................................................................   8
       ---  ---------------------------
       4.9  Lost Certificates..........................................................................   8
       ---  -----------------
      4.10  Withholding Rights.........................................................................   8
       ---  ------------------
      4.11  Further Assurances.........................................................................   8
       ---  ------------------
ARTICLE 5   SHAREHOLDER APPROVAL BOARD OF DIRECTORS RECOMMENDATION; INVESTMENT REPRESENTATION LETTERS..   8
- ---------   -----------------------------------------------------------------------------------------
       5.1  Shareholder Approval.......................................................................   8
       ---  --------------------
       5.2  Board of Directors Recommendation..........................................................   9
       ---  ---------------------------------
</TABLE>

                                       i
<PAGE>

<TABLE>
<S>                                                                                                       <C>
       5.3  Additional Investment Representation Letters...............................................   9
       ---  --------------------------------------------
ARTICLE 6   REPRESENTATIONS AND WARRANTIES OF IDX......................................................   9
- ---------   -------------------------------------
       6.1  Organization, Authority and Capacity.......................................................   9
       ---  ------------------------------------
       6.2  Authorization and Validity.................................................................  10
       ---  --------------------------
       6.3  Absence of Conflicting Agreements or Required Consents.....................................  10
       ---  ------------------------------------------------------
       6.4  Governing Documents of the Company.........................................................  10
       ---  ----------------------------------
       6.5  Outstanding and Authorized Capitalization (IDX, Subsidiaries)..............................  11
       ---  ------------------------------------------------------------
       6.6  Affiliated Practices; Management and Affiliation Contracts.................................  12
       ---  ----------------------------------------------------------
       6.7  Financial Statements.......................................................................  13
       ---  --------------------
       6.8  Absence of Changes.........................................................................  14
       ---  ------------------
       6.9  No Undisclosed Liabilities.................................................................  16
       ---  --------------------------
      6.10  Litigation, etc............................................................................  16
       ---  ---------------
      6.11  No Violation of Law........................................................................  17
      ----  -------------------
      6.12  Real and Personal Property.................................................................  17
      ----  --------------------------
      6.13  Contracts and Commitments..................................................................  18
      ----  -------------------------
      6.14  Employment and Labor Matters...............................................................  19
      ----  ----------------------------
      6.15  Employee Benefit Matters...................................................................  20
      ----  ------------------------
      6.16  Insurance Policies.........................................................................  22
      ----  ------------------
      6.17  Environmental Matters......................................................................  23
      ----  ---------------------
      6.18  Accounts Receivable and Payable............................................................  23
      ----  -------------------------------
      6.19  Taxes......................................................................................  24
      ----  -----
      6.20  Licenses, Authorizations and Provider Programs.............................................  26
      ----  ----------------------------------------------
      6.21  Inspections and Investigations.............................................................  28
      ----  ------------------------------
      6.22  Certain Relationships......................................................................  29
      ----  ---------------------
      6.23  Health Care Laws and Regulations...........................................................  30
      ----  --------------------------------
      6.24  Interested Transactions....................................................................  31
      ----  -----------------------
      6.25  Intellectual Property......................................................................  31
      ----  ---------------------
      6.26  Rights Plan................................................................................  33
      ----  -----------
      6.27  Lack of Ownership of AMP Common Stock......................................................  33
      ----  -------------------------------------
      6.28  Opinion of Financial Advisor...............................................................  33
      ----  ----------------------------
      6.29  Required Vote of Company Shareholders......................................................  33
      ----  -------------------------------------
      6.30  Pooling of Interests; Section 368 Reorganization...........................................  34
      ----  ------------------------------------------------
      6.31  DVD Transaction and Prior Transactions.....................................................  34
      ----  --------------------------------------
      6.32  Takeover Statutes..........................................................................  34
      ----  -----------------
</TABLE>

                                      ii
<PAGE>

<TABLE>
<S>                                                                                                      <C>
      6.33  Accredited Investor Status.................................................................  34
      ----  --------------------------
      6.34  Brokerage..................................................................................  34
      ----  ---------
      6.35  Distribution of Proxy Statement............................................................  34
      ----  -------------------------------
      6.36  Statements True and Correct................................................................  35
      ---   ---------------------------
ARTICLE 7   REPRESENTATIONS AND WARRANTIES OF AMP AND MERGER CORP......................................  35
- ---------   -----------------------------------------------------
       7.1  Organization, Authority and Capacity.......................................................  35
       ---  ------------------------------------
       7.2  Authorization and Validity.................................................................  35
       ---  --------------------------
       7.3  Absence of Conflicting Agreements or Required Consents.....................................  36
       ---  ------------------------------------------------------
       7.4  Governing Documents........................................................................  36
       ---  -------------------
       7.5  Outstanding and Authorized Capitalization..................................................  36
       ---  -----------------------------------------
       7.6  Reports and Financial Statements...........................................................  37
       ---  --------------------------------
       7.7  Absence of Changes.........................................................................  37
       ---  ------------------
       7.8  No Undisclosed Liabilities.................................................................  37
       ---  --------------------------
       7.9  No Violation of Law........................................................................  37
       ---  -------------------
      7.10  Pooling of Interests; Section 368 Reorganization...........................................  37
      ----  ------------------------------------------------
      7.11  Disclosure.................................................................................  38
      ----  ----------
      7.12  Brokerage..................................................................................  38
      ----  ---------
      7.13  Litigation, etc............................................................................  38
      ----  ---------------
      7.14  Inspections and Investigations.............................................................  38
      ----  ------------------------------
      7.15  Health Care Laws and Regulations...........................................................  39
      ----  --------------------------------
      7.16  Statements True and Correct................................................................  40
      ----  ---------------------------
ARTICLE 8   ADDITIONAL AGREEMENTS......................................................................  40
- ---------   ---------------------
       8.1  Access to Information; Prohibition on Insider Trading......................................  40
       ---  -----------------------------------------------------
       8.2  No Solicitation; Acquisition Proposals.....................................................  40
       ---  --------------------------------------
       8.3  Affirmative Covenants of the Company Entities..............................................  41
       ---  ---------------------------------------------
       8.4  Negative Covenants of the Company Entities.................................................  43
       ---  ------------------------------------------
       8.5  Affirmative Covenants of AMP...............................................................  45
       ---  ----------------------------
       8.6  Negative Covenants of AMP..................................................................  45
       ---  -------------------------
       8.7  Confidentiality, Public Announcements......................................................  46
       ---  -------------------------------------
       8.8  Accounting and Tax Treatment...............................................................  46
       ---  ----------------------------
       8.9  Filings with State Offices.................................................................  46
       ---  --------------------------
      8.10  Agreement as to Efforts to Consummate......................................................  46
      ----  -------------------------------------
      8.11  Reports....................................................................................  47
      ----  -------
      8.12  Applications; Antitrust Notification.......................................................  47
      ----  -------------------------------------
</TABLE>

                                      iii
<PAGE>

<TABLE>
<S>                                                                                                      <C>
      8.13  Issuance of Shares; Shareholder Approval...................................................  47
      ----  ---------------------------------------
      8.14  Affiliate Agreements.......................................................................  49
      ----  --------------------
      8.15  Registration of Shares.....................................................................  49
      ----  ----------------------
      8.16  Availability of Rule 144 Information.......................................................  49
      ----  ------------------------------------
      8.17  Closing Working Capital; Pre-Closing Balance Sheet.........................................  49
      ----  --------------------------------------------------
      8.18  Benefit Plans..............................................................................  51
      ----  -------------
      8.19  Indemnification of IDX Officers and Directors..............................................  52
      ----  ---------------------------------------------

ARTICLE 9   CONDITIONS TO OBLIGATIONS OF AMP AND MERGER CORP...........................................  52
- ----------  ------------------------------------------------
       9.1  Representations and Warranties.............................................................  52
       ---  ------------------------------
       9.2  Performance; Covenants.....................................................................  53
       ---  ----------------------
       9.3  No Material Adverse Change.................................................................  53
       ---  --------------------------
       9.4  No Injunction, Etc.........................................................................  53
       ---  ------------------
       9.5  Legal Opinions.............................................................................  54
       ---  --------------
       9.6  Pooling-of-Interests.......................................................................  54
       ---  --------------------
       9.7  Affiliate Agreements.......................................................................  54
       ---  --------------------
       9.8  Management Employment Agreements; Termination of Severance Agreements......................  54
       ---  ---------------------------------------------------------------------
       9.9  Investment Representation Letters..........................................................  54
       ---  ---------------------------------
      9.10  IDX Shareholder Approval...................................................................  54
      ----  ------------------------
      9.11  [intentionally omitted]....................................................................  54
      ----  -----------------------
      9.12  Articles of Merger.........................................................................  54
      ----  ------------------
      9.13  Consent of Lender; Other Required Consents.................................................  55
      ----  ------------------------------------------
      9.14  Compliance with Securities Laws............................................................  55
      ----  -------------------------------
      9.15  Escrow Agreement...........................................................................  55
      ----  ----------------
      9.16  Pay-off Letter.............................................................................  55
      ----  --------------
      9.17  [intentionally omitted]....................................................................  55
      ----  -----------------------
      9.18  Required Subordination Agreements..........................................................  55
      ----  ---------------------------------
      9.19  IDX Pre-Closing Balance Sheet..............................................................  55
      ----  -----------------------------
      9.20  Amendment of Obligations to Issue Stock....................................................  55
      ----  ---------------------------------------

ARTICLE 10  CONDITIONS TO OBLIGATIONS OF THE COMPANY...................................................  56
- ----------  ----------------------------------------
      10.1  Representations and Warranties.............................................................  56
      ----  ------------------------------
      10.2  Performance; Covenants.....................................................................  56
      ----  ----------------------
      10.3  Necessary Consents and Approvals...........................................................  56
      ----  --------------------------------
      10.4  No Material Adverse Change.................................................................  56
      ----  --------------------------
      10.5  No Injunction, Etc.........................................................................  56
      ----  ------------------
</TABLE>

                                      iv
<PAGE>

<TABLE>
<S>                                                                                                      <C>
      10.6   Stockholder Approval......................................................................  57
      ----   --------------------
      10.7   Articles of Merger........................................................................  57
      ----   ------------------
      10.8   Tax-Free Merger...........................................................................  57
      ----   ---------------
      10.9   Registration Rights Agreement.............................................................  57
      ----   -----------------------------
      10.10  Legal Opinion.............................................................................  57
      -----  -------------
      10.11  Nasdaq Listing............................................................................  57
      -----  --------------
ARTICLE 11     TERMINATION.............................................................................  57
- ----------     -----------
      11.1  Right of Termination.......................................................................  57
      ----  --------------------
      11.2  Effect of Termination......................................................................  59
      ----  ---------------------
      11.3  Certain Termination Fees...................................................................  59
      ----  ------------------------
ARTICLE 12     SURVIVAL OF TERMS; INDEMNIFICATION......................................................  61
- ----------     ----------------------------------
      12.1  Survival...................................................................................  61
      ----  --------
      12.2  Indemnification by IDX.....................................................................  61
      ----  ----------------------
      12.3  Indemnification by AMP.....................................................................  61
      ----  ----------------------
      12.4  Third-Party Claims.........................................................................  61
      ----  ------------------
      12.5  Indemnification for Prior Acts.............................................................  63
      ----  ------------------------------
      12.6  Limitations on Indemnification.............................................................  63
      ----  ------------------------------
ARTICLE 13     CERTAIN DEFINITIONS.....................................................................  64
- ----------     -------------------
ARTICLE 14     MISCELLANEOUS PROVISIONS................................................................  69
- ----------     ------------------------
      14.1  Notices....................................................................................  69
      ----  -------
      14.2  Expenses...................................................................................  70
      ----  --------
      14.3  Further Assurances.........................................................................  70
      ----  ------------------
      14.4  Waiver.....................................................................................  70
      ----  ------
      14.5  Assignment.................................................................................  70
      ----  ----------
      14.6  Binding Effect.............................................................................  71
      ----  --------------
      14.7  Headings...................................................................................  71
      ----  --------
      14.8  Entire Agreement...........................................................................  71
      ----  ----------------
      14.9  Governing Law; Severability................................................................  71
      ----  ---------------------------
      14.10 Counterparts...............................................................................  71
      ----- ------------
      14.11 [intentionally omitted]....................................................................  71
      ----- -----------------------
      14.12 Schedules and Exhibits.....................................................................  71
      ----- ----------------------
      14.13 [intentionally omitted]....................................................................  71
      ----- -----------------------
      14.14 Enforcement of Agreement...................................................................  71
      ----- ------------------------
</TABLE>

                                       v
<PAGE>

                         AGREEMENT AND PLAN OF MERGER
                         ----------------------------

     THIS AGREEMENT AND PLAN OF MERGER is made and entered into as of November
7, 2000, by and among AMERIPATH, INC., a Delaware corporation ("AMP), AMP MERGER
CORP., a Tennessee corporation ("Merger Corp"), and PATHOLOGY CONSULTANTS OF
AMERICA, INC., d/b/a Inform DX, a Tennessee corporation ("IDX" or the
"Company").

                                   Preamble
                                   --------

     The respective Boards of Directors of AMP, Merger Corp. and IDX have (i)
approved and have declared advisable the merger of Merger Corp. with and into
the IDX (the "Merger"), upon the terms and subject to the conditions set forth
herein and (ii) determined that the Merger and the other transactions
contemplated hereby are consistent with, and in furtherance of, their respective
business strategies and goals.

     Concurrently herewith and as a condition and inducement to AMP's
willingness to enter into this Agreement,  each Shareholder listed on Schedule
                                                                      --------
6.29 hereto (the "Signing Shareholders") has executed and delivered to AMP (i) a
- ----
voting agreement whereby such Voting Shareholder is agreeing to vote in favor of
the approval and adoption of this Agreement and the Merger (the "Voting
Agreement"), in the form attached hereto as Exhibit A, and (ii) an Investment
                                            ---------
Representation Letter in the form attached hereto as Exhibit B (and indicating
                                                     ---------
therein that such Shareholder is an Accredited Investor).

     The parties desire to make certain representations, warranties, covenants
and agreements in connection with the Merger and also to prescribe various
conditions to the Merger.

     For Federal income tax purposes, it is intended that the Merger will
qualify as a reorganization under the provisions of Section 368(a) of the Code,
and the parties to this Agreement intend to adopt this Agreement as a "plan of
reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the
United States Treasury Regulations.

     For financial accounting purposes, it is intended that the Merger will be
accounted for as a pooling of interests transaction.

     The AMP Common Stock to be issued to the Shareholders shall be "restricted"
stock that is not registered under the Securities Act.

     Certain terms used in this Agreement are defined in Article 13 of this
Agreement.

     NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants and agreements set forth herein, the parties agree as
follows:

                                   ARTICLE 1
                       TRANSACTIONS AND TERMS OF MERGER
                       --------------------------------

     1.1  Merger.  Subject to the terms and conditions of this Agreement, at the
          ------
Effective Time, Merger Corp. shall be merged with and into IDX in accordance
with the applicable provisions of the Tennessee Business Corporation Act the
("TBCA"), and the separate corporate existence of Merger Corp shall thereupon
cease. IDX shall be the Surviving Corporation resulting from the Merger and
shall become a wholly owned Subsidiary of AMP and shall continue to be a
corporation organized under the

                                       1
<PAGE>

TBCA. The Merger shall be consummated pursuant to the terms of this Agreement,
which has been approved and adopted by the respective Boards of Directors of
IDX, Merger Corp. and AMP.

     1.2  Time and Place of Closing. The closing of the Merger (the "Closing")
          -------------------------
will take place at the offices of Greenberg Traurig, P.A., 515 E. Las Olas Blvd,
Ft. Lauderdale, Florida, on a date to be specified by the parties which shall be
promptly following (and no later than the third business day after) satisfaction
or waiver of the conditions set forth in Article 9 (other than those conditions
that by their nature are to be satisfied at the Closing, but subject to the
satisfaction or waiver of those conditions), or at such other time and date or
at such other place as may be mutually agreed upon by the Parties (such actual
date of Closing, the "Closing Date").

     1.3  Effective Time. Subject to the provisions of this Agreement, the
          --------------
parties shall file appropriate Articles of Merger executed in accordance with
the relevant provisions of the TBCA and the terms of this Agreement and shall
make all other filings or recordings required under the TBCA as soon as
practicable on or after the Closing Date. The Merger and other transactions
contemplated by this Agreement shall become effective on the date and at the
time the Articles of Merger reflecting the Merger shall become effective with
the Secretary of State of the State of Tennessee, or at such other time and date
as specified by IDX and Merger Corp. in the Articles of Merger (the "Effective
Time").

                                   ARTICLE 2
                                TERMS OF MERGER
                                ---------------

     2.1  Charter.  The Charter of IDX in effect immediately prior to the
          -------
Effective Time shall be the Charter of the Surviving Corporation until otherwise
amended.

     2.2  Bylaws.  The Bylaws of Merger Corp. in effect immediately prior to the
          ------
Effective Time shall be the Bylaws of the Surviving Corporation until otherwise
amended or repealed.

     2.3  Officers and Directors.  Until successors are duly elected or
          ----------------------
appointed and qualified, the directors and officers of the Surviving Corporation
shall be those individuals listed on Schedule 2.3.

     2.4  Tax-Free Reorganization.  For federal income tax purposes, the Merger
          -----------------------
is intended to constitute a reorganization within the meaning of Section 368 of
the Code. The parties to this Agreement hereby adopt this Agreement as a "plan
of reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of
the United States Treasury Regulations.

     2.5  Pooling Treatment.  For financial accounting purposes, it is intended
          -----------------
that the Merger will be accounted for as a pooling of interests transaction.

                                   ARTICLE 3

                          MANNER OF CONVERTING SHARES
                          ---------------------------

     3.1  Conversion of Shares. Subject to the provisions of this Article 3, at
          --------------------
the Effective Time, by virtue of the Merger and without any action on the part
of the parties hereto or the shareholders of any of the parties, the shares of
the constituent corporations of the Merger shall be converted as follows:

                                       2
<PAGE>

          (a)  Each share of Merger Corp Common Stock issued and outstanding at
the Effective Time shall cease to be outstanding and shall (after giving effect
to Section 3.1(b) below) be converted into one share of IDX Common Stock.

          (b)  Subject to Section 3.6 hereof, each share of IDX Common Stock
issued and outstanding at the Effective Time (other than those held by
dissenters, which shall be addressed as provided in Section 3.6) shall be
converted into the right to receive 0.08243 shares of AMP Common Stock (the
"Exchange Ratio", subject, however, to adjustment of such Exchange Ratio as
 --------------
provided in Section 3.1(c) below, in which event the Exchange Ratio as so
adjusted shall be the Exchange Ratio for purposes of this Agreement including
this paragraph (b)) (such shares of AMP Common Stock to be issued under this
paragraph (b) are sometimes referred to herein as the "Merger Consideration").
                                                       --------------------
As of the Effective Time, all such shares of IDX Common Stock shall no longer be
outstanding and shall automatically be canceled and retired and shall cease to
exist, and each holder of a certificate representing any such shares of IDX
Common Stock shall cease to have any rights with respect thereto, excepting
solely the right to receive the Merger Consideration relating thereto.

          (c)  In the event that the Average Trading Price (as defined in
Article 13 below) is greater than $16.50 per share, then the Exchange Ratio
shall be computed as follows: the Exchange Ratio shall equal the product of (i)
0.08243, multiplied by (ii) a fraction, the numerator of which shall be $16.50
and the denominator of which shall be the Average Trading Price; provided,
however, that in no event shall the Exchange Ratio be less than 0.07328.

     3.2  Anti-Dilution Provisions. In the event AMP changes the number of
          ------------------------
shares of AMP Common Stock issued and outstanding prior to the Effective Time as
a result of any stock split, stock dividend, combination of shares or similar
recapitalization that affects all of the outstanding shares of AMP Common Stock
and the record date therefor or, if there is no record date, the effective date
thereof, shall be prior to the Effective Time, then the number of shares
constituting the Merger Consideration shall be appropriately and proportionately
increased or decreased to adjust therefor, as the case may be.

     3.3  Shares Held by the Company.  Each share of IDX Common Stock held in
          --------------------------
treasury by IDX, shall be canceled and retired at the Effective Time, and no
consideration shall be issued in exchange therefor.

     3.4  Fractional Shares. No certificates representing fractional shares of
          -----------------
AMP Common Stock will be issued as a result of the Merger. Any fractional share
interest to which a holder of shares of IDX Common Stock outstanding as of the
Effective Time would otherwise be entitled to receive hereunder shall be rounded
up to the nearest whole share if such fraction is 0.5 or greater and shall be
rounded down to the nearest whole share if such fraction is less than 0.5.

     3.5  Conversion of Stock Options and Warrants.
          ----------------------------------------

     (a)  Conversion of Stock Options.  All rights with respect to IDX Common
          ---------------------------
Stock pursuant to IDX Options that are outstanding at the Effective Time (the
"Assumed Options"), whether or not exercisable, shall be converted into and
 ---------------
become rights with respect to AMP Common Stock (based on the Exchange Ratio in
the Merger), and AMP shall assume the two option plans of IDX listed in Schedule
                                                                        --------
6.5 and the applicable option agreements thereunder pursuant to which the
- ---
Assumed Options have been issued, in accordance with the applicable terms of
such option plans and agreements, except that from and after the Effective Time,
(i) AMP and the Compensation Committee to be appointed by AMP shall be
substituted for IDX and the Committee of IDX's Board of Directors administering
such plans, (ii) each Assumed Option assumed by AMP may be exercised solely for
shares of AMP Common Stock, (iii) the

                                       3
<PAGE>

number of shares of AMP Common Stock subject to any such Assumed Option shall be
equal to the number of shares of IDX Common Stock subject to such Assumed Option
immediately prior to the Effective Time multiplied by the Exchange Ratio,
rounded down to the nearest whole number of shares, and (iv) the per share
exercise price under each such Assumed Option shall be adjusted by dividing the
per share exercise price under such Assumed Option by the Exchange Ratio and
rounding up to the nearest cent. In addition, notwithstanding the foregoing
clauses (iii) and (iv) of this Section 3.5, all Assumed Options shall be
adjusted as required by Section 424 of the Code and the regulations promulgated
thereunder, so as not to constitute a modification, extension or renewal of the
option, within the meaning of Section 424(h) of the Code. IDX and AMP agree to
take all necessary steps to effectuate the foregoing provisions of this
paragraph (a). At or prior to the Effective Time, AMP shall take all corporate
action necessary to reserve for issuance sufficient shares of AMP Common Stock
for delivery upon exercise of Assumed Options assumed by it in accordance with
this Section 3.5.

     (b)  [intentionally omitted]

     (c)  Conversion of Warrants.  At the Effective Time, all rights with
          ----------------------
respect to IDX Common Stock pursuant to IDX Warrants that are outstanding at the
Effective Time, whether or not exercisable, shall be converted into and become
rights with respect to AMP Common Stock, and AMP shall assume the applicable
warrant agreements pursuant to which the IDX Warrants have been issued, in
accordance with the applicable terms of such agreements, except that from and
after the Effective Time, (i) each IDX Warrant assumed by AMP may be exercised
solely for shares of AMP Common Stock, (ii) the number of shares of AMP Common
Stock subject to any such IDX Warrant shall be equal to the number of shares of
IDX Common Stock subject to such IDX Warrant immediately prior to the Effective
Time multiplied by the Exchange Ratio, rounded down to the nearest whole number
of shares, and (iii) the per share exercise price under each such IDX Warrant
shall be adjusted by dividing the per share exercise price under such IDX
Warrant by the Exchange Ratio and rounding up to the nearest cent.  IDX and AMP
agree to take all necessary steps to effectuate the foregoing provisions of this
paragraph (c).  At or prior to the Effective Time, AMP shall take all corporate
action necessary to reserve for issuance sufficient shares of AMP Common Stock
for delivery upon exercise of IDX Warrants assumed by it in accordance with this
paragraph (c).

     (d)  Registration of Options.  AMP shall, not later than 10 business days
          ------------------------
following the Effective Time, file a Registration Statement on Form S-8 with the
SEC to cause the registration under the Securities Act of the Assumed Options
assumed by AMP pursuant to this Section 3.5, and shall use reasonable efforts to
maintain the effectiveness of such Registration Statement for so long as such
Assumed Options remain outstanding and exerciseable.  In addition, AMP shall use
reasonable efforts to cause the AMP Common Stock subject to such Assumed Options
to be listed on the Nasdaq National Market.  Notwithstanding anything to the
contrary in this Agreement, AMP's assumption of the Assumed Options under this
Agreement shall not occur until (and none of the assumed IDX Options shall be
exerciseable until) the later of (i) the time of filing and effectiveness of
such Registration Statement with the SEC and (ii) three days following AMP's
mailing to the holders of such Assumed Options of the document(s) constituting
the prospectus relating to such S-8 Registration Statement (and AMP agrees to
make such mailing no later than the 10th business day following the Effective
Time).

     (e)  Conversion of Other Stock Rights.  At the Effective Time, all other
          --------------------------------
rights of any Person outstanding at the Effective Time to purchase or acquire
shares of IDX Common Stock from IDX or any other Company Entity (if any) that
are required to be disclosed in Schedule 6.5(a) (such rights are sometimes
referred to herein as the "IDX Stock Rights", but the IDX Stock Rights do not
                           ----------------
include (a) the IDX Options and IDX Warrants, and (b) the rights of AMP and
Merger Corp under this Agreement), shall be converted into and become rights to
purchase or acquire shares of AMP Common Stock pursuant

                                       4
<PAGE>

to the terms of such IDX Stock Rights, except that from and after the Effective
Time, (i) each IDX Stock Right shall apply only to the purchase or acquisition
of shares of AMP Common Stock (and not for the purchase or acquisition of any
securities of IDX or any of its Subsidiaries), (ii) the number of shares of AMP
Common Stock subject to any such IDX Stock Right shall be equal to the number of
shares of IDX Common Stock subject to such IDX Stock Right immediately prior to
the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest
whole number of shares, and (iii) the per share exercise or acquisition price
(if any) under each such IDX Stock Right shall be adjusted by dividing the per
share exercise or acquisition price under such IDX Stock Right by the Exchange
Ratio and rounding up to the nearest cent.

     3.6  Dissenting Stockholders. Pursuant to the Voting Agreement, each Voting
          -----------------------
Shareholder has agreed not to seek or assert any dissenter's or appraisal
rights, or any similar rights, to which such Voting Shareholder may otherwise be
entitled. If any holder of IDX Common Stock shall exercise and successfully
perfect (as determined by a court of competent jurisdiction) dissenter's or
appraisal rights legally available under the TBCA (any such holder of IDX Common
Stock being hereinafter referred to as a "Dissenting Stockholder"), then such
Dissenting Stockholder shall, if the Closing shall occur, be entitled to receive
the value of his, her or its shares of IDX Common Stock in cash as determined
pursuant to the TBCA; provided that no such payment shall be made to any such
Dissenting Stockholder unless and until such Dissenting Stockholder has complied
with all applicable provisions of the TBCA and surrendered to IDX all
certificates representing the shares for which such payment is being sought. In
the event that after the Closing a Dissenting Stockholder withdraws or loses
his, her or its rights to appraisal and payment for his, her or its shares, AMP
shall issue and deliver in accordance with Section 4.1 of this Agreement the
consideration to which such Dissenting Stockholder would otherwise be entitled
under Article 3 as if such Person was not a Dissenting Stockholder (without
interest) upon surrender by such Dissenting Stockholder of all certificates
representing all shares of IDX's Common Stock held by such Dissenting
Stockholder. The parties acknowledge and agree that the aggregate number of
shares of AMP Common Stock issuable pursuant to this Agreement was determined as
if there will be no Dissenting Stockholders, and all shares of AMP Common Stock
that would otherwise be issuable under this Agreement to a Dissenting
Stockholder will be retained by AMP, unless such Dissenting Stockholder
withdraws or loses his, her or its rights to appraisal and payment for his, her
or its shares.

     3.7  Escrow; Shareholders' Representative.
          ------------------------------------

          (a)  As provided in Article 4, immediately after the Effective Time,
each holder of shares of IDX Common Stock at the Effective Time shall be
entitled to receive certificates representing 90% of the shares of AMP Common
Stock into which his shares of IDX Common Stock were converted pursuant to
Section 3.1(b), and certificates representing the remaining 10% of the shares of
AMP Common Stock into which each Shareholder's shares of IDX Common Stock were
converted pursuant to Section 3.1(b) (the "Escrow Shares") shall be deposited in
escrow pursuant to this Section 3.7 and shall be held by an escrow agent
selected by AMP (the "Escrow Agent"), and disposed of in accordance with the
terms of the Escrow Agreement attached as Exhibit D hereto (the "Escrow
                                          ---------
Agreement") and this Agreement.

          (b)  For the purposes of securing the indemnification obligations of
the Company set forth in this Agreement and for purposes of adjusting the Merger
Consideration pursuant to the terms of Section 8.17(a), on the Closing Date, AMP
shall deliver to the Escrow Agent a certificate (issued in the name of the
escrow agent or its nominee) representing the Escrow Shares.  The Escrow Shares
shall not be subject to any lien, attachment, trustee process or any other
judicial process of any creditor of any

                                       5
<PAGE>

party, and shall be held and disbursed solely for the purposes and in accordance
with the terms of the Escrow Agreement and this Agreement.

          (c)  The adoption of this Agreement and the approval of the Merger by
the Shareholders and/or acceptance or receipt by them of any Merger
Consideration shall constitute approval by them of the Escrow Agreement and the
Shareholders' Representative and of all arrangements relating to the foregoing.
By virtue of the approval of this Agreement and the Merger by the shareholders
of IDX in accordance with the TBCA, each Shareholder, without any further act,
shall be deemed to have consented to and approved (i) the use of the Escrow
Shares as collateral for the indemnification obligations set forth in Article 12
and the adjustment of the Merger Consideration as provided in Section 8.17 in
the manner set forth therein and the Escrow Agreement, (ii) the appointment of
Questor Partners Fund, L.P. (which is one of the Shareholders), in its capacity
as the Shareholders' Representative under this Agreement and the Escrow
Agreement for and on behalf of each Shareholder (other than the Dissenting
Stockholders), and the taking by the Shareholders' Representative of any and all
actions and the making of any decisions required or permitted to be taken by the
Shareholders' Representative under the Escrow Agreement and this Agreement,
(iii) the exercise by the Shareholders' Representative of the power to: (A)
execute and deliver the Escrow Agreement; (B) authorize delivery to AMP of
Escrow Shares in satisfaction of claims made by AMP in accordance with the
Escrow Agreement; (C) agree to, negotiate, enter into settlements and
compromises of and demand arbitration and comply with orders of courts and
awards of arbitrators with respect to such claims; (D) resolve any claim made
pursuant to Article 12 and Section 8.17 hereof; and (E) take all actions
necessary in the judgment of the Shareholders' Representative for the
accomplishment of the foregoing), and (iv) all of the other terms, conditions
and limitations in the Escrow Agreement and Article 12 and Section 8.17 hereof.

                                   ARTICLE 4
                              EXCHANGE OF SHARES
                              ------------------

     4.1  Deposit of Certificates with Transfer Agent.  At or prior to the
          -------------------------------------------
Effective Time, AMP shall deposit with its stock transfer agent, American Stock
Transfer & Trust Co. (the "Exchange Agent") for the benefit of the Shareholders,
for exchange in accordance with this Article 4, AMP certificates representing
the number of whole shares of AMP Common Stock issuable pursuant to Section 3 in
exchange for outstanding shares of IDX Common Stock.  AMP shall also make
available to the transfer agent, from time to time as required after the
Effective Time, cash necessary to pay dividends and distributions in accordance
with this Article 4.  Any certificates of AMP Common Stock and cash deposited
with the Exchange Agent as provided herein shall be referred to as the "Exchange
Fund."

     4.2  Exchange Procedures.  As soon as reasonably practicable after the
          -------------------
Effective Time, but no later than 10 days thereafter, the Exchange Agent shall
mail to each Shareholder whose shares were converted into the Merger
Consideration pursuant to Article 3, (i) a letter of transmittal for use by
Shareholders to deliver stock certificates for IDX Common Stock to the Exchange
Agent (which shall specify that delivery shall be effected, and risk of loss and
title to the certificates shall pass, only upon delivery of such certificates to
the Exchange Agent and shall be in such form and have such other provisions as
AMP may reasonably specify) and (ii) instructions for use in effecting the
surrender of the certificates in exchange for the Merger Consideration.  Upon
surrender of proper certificate(s) for shares of IDX Common Stock for
cancellation to the Exchange Agent, together with such letter of transmittal,
duly executed, and such other documents as may reasonably be required by the
Exchange Agent, the holder of such certificate shall be entitled to receive in
exchange therefor an AMP certificate representing that number of whole shares of
AMP Common Stock that such holder has the right to

                                       6
<PAGE>

receive pursuant to the provisions of Article 3 of this Agreement (and subject
to the reservation of shares in escrow pursuant to Section 3.7), and the
certificate so surrendered shall forthwith be cancelled. Until surrendered to
the Exchange Agent as contemplated by this Section 4.2, each Shareholder's
certificate for IDX Common Stock shall be deemed at any time after the Effective
Time to represent only the right to receive, upon such proper surrender to the
Exchange Agent, the Merger Consideration that the holder thereof has right to
receive pursuant to the provisions of this Agreement. No interest will be paid
or will accrue on any cash payable to holders of certificates pursuant to the
provisions of this Article 4.

     AMP shall not be obligated to deliver the consideration to which any
Shareholder is entitled as a result of the Merger until such holder surrenders
his or her certificate or certificates representing the shares of IDX Common
Stock for exchange as provided in this Article 4 or such holder provides an
appropriate affidavit regarding loss of such certificate and an indemnification
in favor of AMP pursuant to Section 4.9 hereof.  All certificates representing
shares of AMP Common Stock shall bear the appropriate "restricted stock legend"
evidencing that such shares have not been registered under the Securities Act,
and such other legends as provided in Section 8.13(b).

     4.3  Distributions with Respect to Unexchanged Shares. No dividends or
          ------------------------------------------------
other distributions with respect to AMP Common Stock with a record date after
the Effective Time shall be paid to the holder of any unsurrendered certificate
with respect to the shares of AMP Common Stock represented thereby, and all such
dividends and other distributions shall be paid by AMP to the Exchange Agent and
shall be included in the Exchange Fund, in each case, until the surrender of
such certificate in accordance with this Article 4. Subject to the effect of
applicable escheat or similar laws, following surrender of any such certificate,
there shall be paid to the holder of the certificate representing whole shares
of AMP Common Stock issued in exchange therefor, without interest, at the time
of such surrender, the amount of dividends or other distribution with a record
date after the Effective Time theretofore paid with respect to such whole shares
of AMP Common Stock and, at the appropriate payment date, the amount of
dividends or other distributions with a record date after the Effective Time but
prior to such surrender and with a payment date subsequent to such surrender
payable with respect to such whole shares of AMP Common Stock. AMP shall make
available to the Exchange Agent cash for these purposes.

     4.4  Rights of Former IDX Owners. At the Effective Time, the stock transfer
          ---------------------------
books of IDX shall be closed and no transfer of IDX Common Stock by any such
holder shall thereafter be made or recognized. Until surrendered in accordance
with the provisions of Section 4.1 of this Agreement, each certificate
theretofore representing shares of IDX Common Stock (other than shares to be
canceled pursuant to Section 3.3 of this Agreement) shall from and after the
Effective Time represent for all purposes only the right to receive the
consideration provided in Section 3.1 of this Agreement in exchange therefor.

     4.5  No Fractional Shares. No certificates or scrip representing fractional
          --------------------
shares of AMP Common Stock shall be issued upon the surrender for exchange of
certificates, no dividend or distribution of AMP Common Stock shall relate to
such fractional share interests and such fractional share interests will not
entitle the owner thereof to vote or to any rights of a stockholder of AMP. The
procedure with respect to fractional shares is set forth in Section 3.4 hereof.

     4.6  Termination of Exchange Fund.  Any portion of the Exchange Fund that
          ----------------------------
remains undistributed to the holders of the certificates for six months after
the Effective Time shall be delivered to AMP, and any holders of the
certificates who have not theretofore complied with this Article 4 shall
thereafter look only to AMP for payment of their claim for Merger Consideration
and any dividends or distributions with respect to AMP Common Stock.

                                       7
<PAGE>

     4.7  No Liability. None of AMP, IDX, Merger Corp. or the Exchange Agent
          ------------
shall be liable to any Person in respect of any shares of AMP Common Stock (or
dividends or distributions with respect thereto) or cash from the Exchange Fund
in each case properly delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law. If any certificate shall not have
been surrendered prior to seven years after the Effective Time, and shall not
previously have been required to be escheated to or become the property of any
Authority, any such Merger Consideration or cash, dividends or distributions in
respect of such certificate shall, to the extent permitted by applicable law,
become the property of AMP, free and clear of all claims or interest of any
Person previously entitled thereto.

     4.8  Investment of Exchange Fund. The Exchange Agent shall invest any cash
          ---------------------------
included in the Exchange Fund, as directed by AMP, on a daily basis. Any
interest and other income resulting from such investments shall be paid to AMP.

     4.9  Lost Certificates.  If any certificate representing IDX Common Stock
          -----------------
shall have been lost, stolen or destroyed, upon the making of an affidavit of
that fact by the Person claiming such certificate to be lost, stolen or
destroyed and, if required by AMP, the holder's written indemnification of AMP
and the Exchange Agent in form reasonable requested by AMP as indemnity against
any claim that may be made against either AMP or the Exchange Agent with respect
to such certificate, the Exchange Agent will issue in exchange for such lost,
stolen or destroyed certificate the Merger Consideration and unpaid dividends
and distributions on shares of AMP Common Stock deliverable in respect thereof,
in each case pursuant to this Agreement.

     4.10 Withholding Rights. AMP shall be entitled to deduct and withhold from
          ------------------
the consideration otherwise payable pursuant to this Agreement to any holder of
shares of AMP Common Stock such amounts as it is required to deduct and withhold
(if any) with respect to the making of such payment (if any) under the Code and
the rules and regulations promulgated thereunder, or any provision of state,
local or foreign tax law. To the extent that amounts are so withheld by AMP such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of the shares of IDX Common Stock in respect of which
such deduction and withholding was made by AMP.

     4.11 Further Assurances. At and after the Effective Time, the officers and
          ------------------
directors of AMP and the Surviving Corporation shall be authorized to execute
and deliver, in the name and on behalf of IDX or Merger Corp, any deeds, bills
of sale, assignments or assurances and to take and do, in the name and on behalf
of IDX or Merger Corp, any other actions and things to vest, perfect or confirm
of record or otherwise in the Surviving Corporation any and all right, title and
interest in, to and under any of the rights, properties or assets acquired or to
be acquired by the Surviving Corporation as a result of, or in connection with,
the Merger.

                                   ARTICLE 5
                             SHAREHOLDER APPROVAL;
                      BOARD OF DIRECTORS RECOMMENDATION;
                       INVESTMENT REPRESENTATION LETTERS
                      ----------------------------------

     5.1  Shareholder Approval. Subject to Section 8.2 hereof, as soon as
          --------------------
reasonably practical following the execution of this Agreement, this Agreement
shall be submitted for approval to the Shareholders entitled to vote thereon at
a meeting to be duly held for this purpose by IDX (the "IDX Shareholders
Meeting"), in accordance with the terms of this Agreement.

                                       8
<PAGE>

     5.2  Board of Directors Recommendation.  Subject to Section 8.2 of this
          ---------------------------------
Agreement, the Board of Directors of IDX shall recommend approval of this
Agreement by the Shareholders, and shall not withdraw, modify or qualify (or
propose to withdraw, modify or qualify) in any manner adverse to AMP such
recommendation or take any action or make any statement in connection with the
IDX Shareholders Meeting inconsistent with such recommendation.

     5.3  Additional Investment Representation Letters. IDX hereby agrees to use
          --------------------------------------------
commercially reasonable best efforts to cause each Shareholder (that has not
already done so) to execute and deliver an Investment Representation Letter as
soon as practicable following the date hereof and prior to the Closing Date,
which efforts will be made upon and following the distribution of the Proxy
Statement as provided in this Agreement.

                                   ARTICLE 6
                     REPRESENTATIONS AND WARRANTIES OF IDX
                     -------------------------------------

     IDX, on behalf of itself and the Company Entities, represents and warrants
the following to AMP and Merger Corp:

     6.1  Organization, Authority and Capacity.
          ------------------------------------

(a)  IDX is a corporation, duly organized, validly existing, and in good
standing under the laws of the State of Tennessee, and has the full corporate
power and authority necessary to (i) execute, deliver and perform its
obligations under this Agreement and the other agreements and instruments to be
executed and delivered by IDX pursuant to this Agreement (collectively, the
"Merger Documents") and (ii) carry on its business as it has been and is now
being conducted and to own and lease the properties and assets which it now owns
or leases. IDX is duly qualified to do business and is in good standing in the
jurisdictions set forth in Schedule 6.1(a), which includes every jurisdiction in
                           ---------------
which the failure to be so qualified or in good standing could be expected to
have a material adverse effect on (i) any Company Entity's ability to perform
its obligations under the Merger Documents to be executed and delivered by it or
(ii) the business, operations, properties, assets, results of operations, or
condition (financial or otherwise) of the Company Entities taken as a whole (a
"Company Material Adverse Effect"); provided, however, that, "Company Material
 -------------------------------    -----------------
Adverse Effect" shall not be deemed to include the impact of (a) actions or
omissions of the Company and/or its Subsidiaries (other than actions or
omissions required pursuant to the terms of this Agreement) taken in strict
compliance with the prior informed written consent of AMP (in AMP's sole
discretion) in furtherance of the transactions contemplated hereunder, (b)
changes in law of general applicability or interpretations thereof by courts or
governmental authorities following the date of this Agreement, (c) changes in
generally accepted accounting principles following the date of this Agreement
which have an adverse effect on IDX and which are required by GAAP to be applied
by IDX), and (d) the expenses incurred by IDX in consummating the transactions
contemplated by this Agreement (so long as the "Working Capital Deficiency" (as
defined in Section 8.17) is not more than $1,250,000).

          (b)  Each Company Entity and each Specified Practice is a corporation
validly existing and in good standing under the laws of the State of its
incorporation set forth in Schedules 6.5(b) and 6.6(a) (or Tennessee, in the
                           ---------------------------
case of IDX), and each Company Entity and, to the knowledge of the Company
Entities, each Specified Practice, was duly organized.  Each Company Entity and,
to the knowledge of the Company Entities, each Specified Practice, has the full
corporate power and authority necessary to (i) execute and deliver the Merger
Documents to which such Person is a party, (ii) carry on

                                       9
<PAGE>

its business as it has been and is now being conducted and to own and lease the
assets which it now owns or leases. Each Company Entity and, to the knowledge of
the Company Entities, each Specified Practice, is duly qualified to do business
and is in good standing in the jurisdictions set forth in Schedule 6.1(a), which
                                                          ---------------
includes every jurisdiction in which the failure to be so qualified or in good
standing could be expected to have a Company Material Adverse Effect.

     6.2  Authorization and Validity.  The execution, delivery and performance
          --------------------------
of the Merger Documents have been duly authorized by all necessary corporate
action on the part of the Company Entities party thereto, other than approval by
the shareholders of IDX.  The Merger Documents to be executed and delivered by
the Company Entities have been or will be, as the case may be, duly executed and
delivered by the Company Entities and constitute or will constitute the legal,
valid and binding obligations of the Company Entities, enforceable in accordance
with their respective terms, except as may be limited by bankruptcy, insolvency,
or other laws affecting creditors' rights generally, or as may be modified by a
court of equity.

     6.3  Absence of Conflicting Agreements or Required Consents. Except as set
          ------------------------------------------------------
forth on Schedule 6.3, the execution, delivery and performance by the Company
         ------------
Entities of the Merger Documents to be executed and delivered by the Company
Entities: (i) other than filings under the HSR Act pursuant to Section 8.12 of
this Agreement, do not require the consent of or notice to any Authority or any
other third party or any Company Practice; (ii) do not conflict with any
provision of any Company Entity's articles or certificate of incorporation (or
charter) or bylaws; (iii) do not conflict with or result in a violation of any
law, ordinance, regulation, ruling, judgment, order or injunction of any court
or governmental instrumentality to which any Company Entity or, to the knowledge
of the Company Entities, any Specified Practice, is subject or by which any
Company Entity or, to the knowledge of the Company Entities, any Specified
Practice, or any of their respective properties are bound; (iv) do not conflict
with, constitute grounds for termination of, result in a breach of, constitute a
default under, require any notice under, or accelerate or permit the
acceleration of any performance required by the terms of (a) any agreement,
instrument, license or permit to which any Company Entity, or, to the knowledge
of the Company Entities, any Specified Practice, is a party or by which any
Company Entity, or, to the knowledge of the Company Entities, any Specified
Practice, or any of their properties are bound, which are listed or required to
be listed in the Schedules to this Agreement (including without limitation the
Schedules to Sections 6.5, 6.6, 6.13, 6.15, 6.16, 6.20, and 6.25), or (b) any
other agreement, instrument, license or permit to which any Company Entity, or,
to the knowledge of the Company Entities, any Specified Practice, is a party or
by which any Company Entity, or, to the knowledge of the Company Entities, any
Specified Practice, or any of their properties are bound, other than any such
breaches or defaults thereof that will not, individually or in the aggregate,
have a Company Material Adverse Effect or an AMP Material Adverse Effect; and
(v) will not create any lien, encumbrance or restriction upon any of the assets
or properties of any Company Entity or, to the knowledge of the Company
Entities, any Specified Practice. Subject to Section 8.2, the Board of Directors
of IDX has determined that the transactions contemplated by this Agreement are
in the best interest of IDX and the Shareholders and to recommend to the
shareholders of IDX that they vote in favor of the adoption and approval of this
Agreement and the Merger contemplated hereby. The disclosures required on
Schedule 6.3 with respect to the foregoing clause (iv) shall include any
severance payments or other payments by any of the Company Entities that become
or will become due or payable as a result of this Agreement or the Merger or the
change in control of IDX that will occur as a result of the Closing of the
Merger, that are required under any employment agreement or other agreement to
which any of the Company Entities is a party or under any other obligation of
any of the Company Entities.

     6.4  Governing Documents of the Company.  True and correct copies of the
          ----------------------------------
organizational documents and all amendments thereto of each Company Entity have
been provided or made available to

                                      10
<PAGE>

AMP, and such documents with respect to the Specified Practices in the
possession of the Company Entities have been provided or made available to AMP.
AMP has previously been provided with access to the minutes of each Company
Entity (and of each Specified Practice to the extent available to IDX), and such
minutes accurately reflect (and to the knowledge of the Company Entities with
respect to the Specified Practices) all proceedings of the board of directors of
each Company Entity and Specified Practice (and all committees thereof). The
record books of each Company Entity and Specified Practice, which have been made
available to AMP for review (and to the knowledge of the Company Entities with
respect to the Specified Practices), contain true, complete and accurate records
of the ownership of each Company Entity and Specified Practice. At Closing, all
books and records of the Company Entities, including all corporate and other
records, minute books, stock record books, stock registers, books of accounts,
contracts, and agreements, and such other documents or certificates as shall be
reasonably requested by AMP, shall be in reasonable order and located at the
corporate offices of IDX;

     6.5  Outstanding and Authorized Capitalization (IDX, Subsidiaries).
          -------------------------------------------------------------

          (a)  All authorized and outstanding shares of IDX Common Stock are
accurately described on Schedule 6.5(a), and IDX has no outstanding shares of
                        ---------------
any class of capital stock other than the IDX Common Stock described in Schedule
                                                                        --------
6.5(a).  No shares of capital stock are held in the treasury of IDX except as
- ------
set forth on Schedule 6.5(a).  All outstanding shares of IDX Common Stock are
             ---------------
listed and held of record by the Persons as indicated on Schedule 6.5(a) and all
                                                         ---------------
shares of outstanding IDX Common Stock have been duly and validly issued, and
are fully paid and nonassessable.  No shares of IDX Common Stock were issued in
violation of preemptive rights of any past or present holder of any IDX Common
Stock.  Except for the IDX Options and IDX Warrants described on Schedule 6.5(a)
                                                                 ---------------
(which description includes, among other things, a list of the holders of such
IDX Convertible Securities, the number of shares of IDX Common Stock subject to
issuance upon exercise thereof (whether currently exercisable or not and after
taking into account any required adjustments to the terms thereof by reason of
events or transactions occurring after the issuance thereof (such as adjustments
for corporate transactions or otherwise, but excluding the effect of the
Merger), the exercise price per share of IDX Common Stock, and the vesting terms
thereof, and the name of the option plan or other plan or agreement pursuant to
which such IDX Convertible Securities were issued, if applicable), there are no
outstanding warrants, options, rights, calls or other commitments of any nature
relating to IDX Common Stock or other securities of IDX and there are no
outstanding securities of IDX convertible into or exchangeable for any IDX
Common Stock or other securities of IDX.  None of the IDX Options are incentive
stock options as defined in Section 422 of the Code.  Except as set forth on
Schedule 6.5(a), IDX is not obligated to issue or repurchase any IDX Common
- ---------------
Stock or other securities of IDX for any reason and no person or entity has any
right or privilege (whether preemptive or contractual) for the purchase,
subscription or issuance of any unissued IDX Common Stock or other securities of
IDX.  Prior to the Closing Date, IDX shall cause all "IDX Stock Rights" (as
defined in Section 3.5(e)), if any, to be amended in accordance with Section
9.20.  There are no outstanding rights of any Person to demand registration of
securities of IDX (other than pursuant to the Investor Stockholder Agreement
referenced in Section 9.2(f), which agreement IDX shall cause to be terminated
prior to Closing as contemplated in Section 9.2(f)), or any other rights of any
Person (except as set forth on Schedule 6.5(a)) to include or sell securities of
                               ----------------
IDX in connection with a registration by IDX under the Securities Act (and IDX
shall cause certain of such agreements to be terminated prior to Closing as
contemplated in Section 9.2(f)).  True and complete copies of all of the option
agreements and option plans evidencing the terms of the IDX Options and all of
the warrant agreements evidencing the terms of the IDX Warrants have been
provided to AMP.

          Except as described on Schedule 6.5(a), no shares of IDX Common Stock
                                 ---------------
have been pledged by IDX or, to the knowledge of the Company Entities, pledged
by any holder of IDX Common

                                      11
<PAGE>

Stock, to any Person or are subject to any security interest or other Lien,
other than the shares of IDX Common Stock that have been pledged to IDX pursuant
to the terms of the Physician Stockholder Agreement, dated December 24, 1997, as
amended (by the first amendment dated June 1998 and the second amendment dated
June 30, 2000) (the "Physician Stockholder Agreement"). Schedule 6.5(a) sets
                                                        ---------------
forth the names of each of the persons that have pledged shares to IDX pursuant
to the Physician Stockholder Agreement (and indicates which of such persons have
executed a Stock Pledge Agreement as contemplated by the Physician Stockholder
Agreement), and certificates for all such shares are in the possession of IDX
(and will be delivered to AMP upon Closing of the Merger) and are subject to a
valid and enforceable pledge and security interest in favor of IDX pursuant to
the terms of the Physician Stockholder Agreement (and the terms of a Stock
Pledge Agreement, if applicable).

          (b)  Schedule 6.5(b) sets forth a true and complete list of all IDX
               ---------------
Subsidiaries as of the date of this Agreement, including the legal name, state
of incorporation or organization, and a true and correct list of the class and
number of outstanding shares of capital stock of each IDX Subsidiary and the
record owner(s) thereof.  There are not issued, reserved for issuance or
outstanding (A) any shares of capital stock or other voting securities of any
IDX Subsidiary (other than shares of capital stock or other voting securities
that are directly or indirectly owned by IDX as indicated in Schedule 6.5(b)),
                                                             ----------------
(B) any securities of any IDX Subsidiary convertible into or exchangeable or
exercisable for shares of capital stock or other voting securities of, or other
ownership interests in IDX or any IDX Subsidiary or (B) any warrants, calls,
options or other rights to acquire from any IDX Subsidiary, and no obligation of
the any IDX Subsidiary to issue, any capital securities convertible into or
exchangeable or exercisable for, any capital stock or other voting securities
of, or ownership interests in, any IDX Subsidiary, and there are not any
outstanding obligations of any IDX Subsidiary to repurchase, redeem or otherwise
acquire any such securities or to issue, deliver or sell, or cause to be issued,
delivered or sold, any such securities.  Prior to the Closing Date, IDX shall
cause all "Subsidiary Stock Rights" (as defined in the following sentence), if
any, to be amended in accordance with Section 9.20.  "Subsidiary Stock Rights"
                                                      -----------------------
means all rights of any Person to purchase or acquire shares of capital stock or
other securities of any Subsidiary of IDX that are required to be disclosed in
Schedule 6.5(b).

          Except as described on Schedule 6.5(b), no shares of capital stock of
                                 ---------------
any of the Company Entities (excluding IDX) have been pledged by any Company
Entity or Specified Practice or, to the knowledge of the Company Entities, by
any other Person, to any Person or are subject to any security interest or other
Lien.

          (c)  Except as disclosed in Schedule 6.5(a) or Schedule 6.5(b), no
                                      ----------------------------------
Company Entity is a party to or sponsor of any phantom stock plans, stock
appreciation rights plans, phantom stock agreement or stock appreciation rights
agreements.

     6.6  Affiliated Practices; Management and Affiliation Contracts.
          ----------------------------------------------------------

          (a)  Set forth on Schedule 6.6(a) is an identification of (a) each
                            ---------------
group of physicians whose practice any Company Entity has acquired, (b) each
entity with which any Company Entity or any Affiliate of any Company Entity has
entered into a management services or similar agreement to provide medical
practice management or similar services (each a "Company Practice" and together
the "Company Practices"), and (c) which of the Company Practices are the
"Specified Practices".  Schedule 6.6(a) sets forth a true and complete list of
                        ---------------
(i) the type of entity of each such Company Practice and its jurisdiction of
organization or formation as applicable, and its legal name (which items
pursuant to this clause (i) are to the knowledge of the Company Entities with
respect to the Specified Practices), and (ii) a true and correct list of the
class and number of outstanding shares of capital stock or other ownership
interests in each Company Practice that is not a Specified Practice and the
record owner(s) thereof (if any such

                                      12
<PAGE>

Company Practice is a Subsidiary, then Schedule 6.6(a) may refer to Schedule
6.5(b) for the applicable information). As to any Company Practice that is not a
Specified Practice, except as disclosed in Schedule 6.6(a), there are not
                                           ----------------
issued, reserved for issuance or outstanding: (A) any securities of any such
Company Practice convertible into or exchangeable or exercisable for shares of
capital stock or other voting securities of, or other ownership interests in
such Company Practice or (C) any warrants, calls, options or other rights to
acquire from any such Company Practice, and no obligation of any such Company
Practice to issue, any capital securities convertible into or exchangeable or
exercisable for, any capital stock or other voting securities of, or ownership
interests in, any Company Practice, and there are not any outstanding
obligations of any such Company Practice to repurchase, redeem or otherwise
acquire any such securities or to issue, deliver or sell, or cause to be issued,
delivered or sold, any such securities.

          (b)  Set forth on Schedule 6.6(b) is,  as to each Company Practice, a
                            ---------------
list of all contracts and agreements between any Company Entity and such Company
Practice, including any predecessor thereto or owner thereof, including without
limitation any management services or similar agreement to provide medical
practice management or similar services (a "Practice Management Agreement") and
agreements relating to the transactions under which such Company Practice became
affiliated with any Company Entity or otherwise (the "Company Affiliation
Agreements").  True and correct copies of the Practice Management Agreements,
Company Affiliation Agreements, and other agreements listed in Schedule 6.6(b)
have been provided or made available to AMP.

          (c)  Except as set forth on Schedule 6.6(c), no Company Entity nor, to
                                      ---------------
the knowledge of any Company Entity, any Specified Practice, has owned and does
not currently own, directly or indirectly, of record, beneficially or equitably,
any capital stock or other equity, ownership or proprietary interest in any
corporation, partnership, limited liability company, association, trust, joint
venture or other entity.  Set forth on Schedule 6.6(c) is a listing of all
                                       ---------------
predecessor companies of IDX and its Subsidiaries, including the names of any
entities from whom IDX or any of its Subsidiaries previously acquired material
assets, and any other entity of which IDX or any of its Subsidiaries has been a
subsidiary or division.  Except as listed on Schedule 6.6(c), neither IDX nor
                                             ---------------
any of its Subsidiaries has sold or disposed of, by way of asset sale, stock
sale, spin-off or otherwise, any material assets or business.

          (d)  Except as set forth on Schedule 6.6(d), all of the physicians
                                      ---------------
employed on a full-time basis by any Company Entity or the Company Practices
have entered into covenants not to compete with a Company Entity or a Company
Practice for a period of at least one (1) year following the termination of such
employment.

     6.7  Financial Statements.  Attached hereto as Schedule 6.7 are (i) the
          --------------------                      ------------
audited consolidated financial statements of each of PCA and PathSource,
respectively, for the years ended December 31, 1999 and 1998, together with the
reports thereon of each such company's independent accounting firm, and
PathSource's interim unaudited financial statements for the three months ended
March 31, 2000, (ii) the financial statements of DVD for year ended December 31,
1999 and the six months ended June 30, 2000 as compiled by DVD's independent
accounting firm including the compilation reports of such accounting firm, and
(iii) IDX's consolidated and consolidating interim unaudited financial
statements for the nine months ended September 30, 2000 (the IDX Interim
Financial Statements"), (such financial statements referenced in the foregoing
clauses (i), (ii) and (iii) are sometimes referred to herein collectively as the
"Company Financial Statements").  The Company Financial Statements reflect the
results of operations and financial condition of PCA, PathSource, DVD and IDX
(as applicable) for such periods and at such dates as indicated therein.  Except
as indicated on Schedule 6.7 with respect to the DVD financial statements noted
                ------------
in clause (ii) above or any other Company Financial Statements, the

                                      13
<PAGE>

Company Financial Statements have been prepared in accordance with generally
accepted accounting principles ("GAAP") consistently applied except for (i) the
                                 ----
omission of notes to unaudited Company Financial Statements, and (ii) the fact
that interim unaudited Company Financial Statements are subject to normal year-
end adjustments. The Company Financial Statements present fairly the financial
position of PCA, PathSource, DVD and IDX as of the dates indicated and present
fairly the results of operations of PCA, PathSource, DVD and IDX for the periods
then ended, and are in accordance with the books and records of PCA, PathSource,
DVD and IDX, which are complete and correct in all material respects.

     6.8  Absence of Changes. Except as set forth on Schedule 6.8, since
          ------------------                          ------------
September 30, 2000, each Company Entity and, to the knowledge of any Company
Entity, the Specified Practices, has conducted its respective businesses only in
the ordinary course in all material respects and have not:

               (i)    suffered any material adverse change in its working
          capital, condition (financial or otherwise), assets, liabilities,
          reserves, business or operations;

               (ii)   paid, discharged or satisfied any material liability other
          than in the ordinary course of business;

               (iii)  written off as uncollectible any account receivable other
          than in the ordinary course of business or suffered an impairment of
          any other asset;

               (iv)   compromised any debts, claims or rights or disposed of any
          of its properties or assets other than in the ordinary course of
          business;

               (v)    entered into any commitments or transactions not in the
          ordinary course of business involving aggregate value in excess of
          $25,000 or made aggregate capital expenditures or commitments in
          excess of $25,000;

               (vi)   made any material change in any method of accounting or
          accounting practice;

               (vii)  subjected any of its assets, tangible or intangible, to
          any Lien, encumbrance or restriction of any nature whatsoever, except
          for Permitted Liens;

               (viii) hired, committed to hire or terminated any employee or
          medical director other than in the ordinary course of business;

               (ix)   except for payments, dividends or distributions consistent
          with past practices for prior periods, declared, set aside or made any
          payment, dividend or other distribution to any holder of IDX Common
          Stock or purchased, redeemed or otherwise acquired, directly or
          indirectly, any IDX Common Stock;

               (x)    terminated or made any material amendment to any material
          contract, license or other instrument to which any Company Entity is a
          party or suffered any loss or termination or threatened loss or
          termination of any existing business arrangement or material supplier,
          the termination or loss of which, in the aggregate, would have a
          Company Material Adverse Effect;

               (xi)   effected any change in its capital structure;

                                      14
<PAGE>

               (xii)  incurred, assumed or refinanced any indebtedness other
          than in the ordinary course of business consistent with past practice,
          or made any loans, advances or capital contributions to, or
          investments in, any Person other than an IDX Subsidiary or any
          employee or officer as a cash advance, in each case in the ordinary
          course of business and consistent with past practice;

               (xiii) paid, discharged or satisfied any liability, obligation,
          or Lien other than payment, discharge or satisfaction of (A)
          indebtedness as it matures and become due and payable or (B)
          liabilities, obligations or Liens in the ordinary course of business
          consistent with past practice;

               (xiv)  changed any of the accounting or tax principles, practices
          or methods used by the Company, except as required by changes in
          applicable Tax Laws or changed reserve amounts or policies;

               (xv)   (A) entered into any employment contract or other
          arrangement or made any change in the compensation payable or to
          become payable to any Company Entity's or any Company Practices'
          officers, employees, agents, consultants or Persons acting in a
          similar capacity (other than general increases in wages or salaries to
          employees or such other Persons (other than officers) in the ordinary
          course consistent with past practice), (B) terminated or entered into
          or amended any employment, severance, consulting, termination or other
          agreement or employee benefit plan, and except for cash advances made
          in the ordinary course of business consistent with past practice, (C)
          paid or committed to pay any bonuses to any Company Entity's or any
          Company Practices' officers, employees, agents, consultants or Persons
          acting in a similar capacity or (D) made any change in its existing
          borrowing or lending arrangements for or on behalf of any of such
          Persons pursuant to an employee benefit plan or otherwise;

               (xvi)  (A) paid or made any accrual or arrangement for payment of
          any pension, retirement allowance or other employee benefit pursuant
          to any existing plan, agreement or arrangement to any Affiliate,
          officer, employee or Person acting in a similar capacity, or paid or
          agreed to pay or made any accrual or arrangement for payment to any
          Affiliate, officers, employees or Persons acting in a similar capacity
          of any amount relating to unused vacation days, except payments and
          accruals made in the ordinary course consistent with past practice,
          (B) granted, issued, accelerated or accrued salary or other payments
          or benefits pursuant to any pension, profit-sharing, bonus, extra
          compensation, incentive, deferred compensation, stock purchase, stock
          option, stock appreciation right, group insurance, severance pay,
          retirement or other employee benefit plan, agreement or arrangement,
          or any employment or consulting agreement with or for the benefit of
          any Affiliate, officer, employee, agent or consultant or Person acting
          in a similar capacity, whether past or present or (C) or amended in
          any material respect any such existing plan, agreement or arrangement
          to effect any of the foregoing;

               (xvii) made any payments (other than regular compensation and
          cash advances payable to officers and employees or Persons acting in a
          similar capacity of any Company Entity in the ordinary course
          consistent with past practice), loans, advances or other
          distributions, or entered into any transaction, agreement or
          arrangement with, the Shareholders, any Company's Affiliates,
          officers, employees, agents, consultants or Persons acting in a
          similar capacity, stockholders of their Affiliates, associates or
          family members;

                                      15
<PAGE>

               (xviii)  settled or compromised any Tax liability or agreed to
          any adjustment of any Tax attribute or made any election with respect
          to Taxes;

               (xix)    (A) made any change in its working capital practices
          generally, including accelerating any collections of cash or accounts
          receivable or deferring payments or (B) failed to make timely
          accruals, including with respect to accounts payable and liabilities
          incurred in the ordinary course of business;

               (xx)     failed to renew (at levels consistent with presently
          existing levels), terminated or amended or failed to perform any of
          its obligations or permitted any material default to exist or caused
          any material breach under, or entered into (except for renewals in the
          ordinary course of business consistent with past practice), any policy
          of insurance;

               (xxi)    except in the ordinary course of business consistent
          with past practice pursuant to appropriate confidentiality agreements,
          and except as required by any Law or any existing agreements set forth
          on Schedule 6.13 or as may be reasonably necessary to secure or
             -------------
          protect intellectual or other property rights of the Company, provided
          any confidential information to any Person other than AMP;

               (xxii)   taken any action that would result in the failure of
          this transaction to be treated as a pooling of interests for financial
          accounting purposes; or

               (xxiii)  agreed, whether in writing or otherwise, to take any
          action described in this Section 6.8.

     6.9  No Undisclosed Liabilities.  Except as set forth on Schedule 6.9, no
          --------------------------                          ------------
Company Entity has any Liabilities of the type required to be reflected on a
balance sheet (or notes thereto) prepared in accordance with GAAP, other than
those Liabilities which have been adequately reflected in or provided for in the
Company Financial Statements or incurred in the ordinary course of its business
since September 30, 2000 and except for any Liabilities as would not
individually or in the aggregate have a Company Material Adverse Effect.

     6.10 Litigation, etc. Except as listed on Schedule 6.10 hereto, and except
          ---------------                      -------------
for matters involving Claims for less than $50,000 that are adequately covered
by any Company Entity's or any Company Practice's insurance (taking into account
any applicable limits on coverage) and which would not, if determined adversely,
have a Company Material Adverse Effect, (i) there are no Claims pending against
any Company Entity or, to the knowledge of any Company Entity, the Specified
Practices, and, to the knowledge of any Company Entity, no such matter is
threatened, (ii) to the knowledge of any Company Entity, there are no
governmental or administrative investigations or inquiries pending that involve
any Company Entity or the Company Practices, and (iii) there are no judgments
against or consent decrees binding on (a) any Company Entity or, to the
knowledge of any Company Entity, the Specified Practices or their assets, or (b)
to the knowledge of any Company Entity, without independent investigation, any
licensed professional other than any which individually or in the aggregate
would not have a Company Material Adverse Effect; and (iv) all Claims against a
Company Entity (and to the knowledge of the Company Entities, against a
Specified Practice), have been reported to the appropriate insurance carrier
and, to the knowledge of any Company Entity, no Company Entity or Specified
Practice has received a notice of denial of coverage or a reservation of rights.

                                      16
<PAGE>

     6.11  No Violation of Law. Except as disclosed in Schedule 6.11, no Company
           -------------------                         -------------
Entity nor, to the knowledge of any Company Entity, any Specified Practice, has
been or are currently in violation of any applicable local, state or federal
law, ordinance, regulation, order, injunction or decree, or any other
requirement of any governmental body, agency or authority or court binding on
it, or relating to its property or business or its advertising, sales or pricing
practices, except for any such violations as would not individually or in the
aggregate have a Company Material Adverse Effect.

     6.12  Real and Personal Property.
           --------------------------

          (a)  Schedule 6.12(a) sets forth a list of all items of material
               ----------------
personal and mixed, tangible and intangible property, rights and assets of any
Company Entity.  Except as set forth on Schedule 6.12(a), each Company Entity
                                        ----------------
(i) has good and valid title to all of the personal and mixed, tangible and
intangible property, rights and assets which it purports to own, including all
the personal property and assets reflected in the Company Financial Statements;
and (ii) owns such rights, assets and personal property free and clear of all
Liens, encumbrances or restrictions of any nature whatsoever (except for
Permitted Liens).

          (b)  Schedule 6.12(b) contains a true and correct description of all
               ----------------
real property owned or leased by any Company Entity, including all improvements
located thereon.  Except as set forth on Schedule 6.12(b), each Company Entity
                                         ----------------
has good and marketable title to all real property owned by it, free and clear
of any Liens, encumbrances or restrictions of any nature whatsoever (except for
Permitted Liens).  AMP has been furnished with, or provided access to, true,
correct and complete copies of all leases, deeds, easements and other documents
and instruments concerning the matters listed on Schedule 6.12(b).  No
                                                 ----------------
condemnation or similar actions are currently in effect or pending against any
part of any real property owned or leased by any Company Entity or, to the
knowledge of any Company Entity, the Specified Practices, and to the knowledge
of any Company Entity, no such action is threatened against any such real
property.  There are no encroachments, leases, easements, covenants,
restrictions, reservations or other burdens of any nature which might impair in
any material respect the use of any owned or leased real property in a manner
consistent with past practices nor does any part of any building structure or
any other improvement thereon encroach on any other property.

          (c)  The present zoning, subdivision, building and other ordinances
and regulations applicable to any owned or leased real property permit the
continued operation, use, occupancy and enjoyment of such real property
consistent with past practices, by any Company Entity and, to the knowledge of
any Company Entity, the Specified Practices, are in compliance with, and have
received no notices of violations of, any applicable zoning, subdivision or
building regulation, ordinance or other law, regulation, or requirement with
respect to such real property. Each Company Entity and, to the knowledge of each
Company Entity, the Specified Practices have all rights and easements necessary
for public ingress to and egress therefrom and for the provision of all utility
services thereto, including any required curb cut or street opening permits or
licenses for vehicular access over presently existing roads and driveways.

          (d)  The assets owned or leased by each Company Entity and, to the
knowledge of each Company Entity, the Specified Practices (including all
buildings and improvements in connection therewith) are in good operating
condition and repair, ordinary wear and tear excepted, and such assets (together
with any assets leased by each Company Entity) include all rights, properties,
interests in properties, and assets necessary to permit each Company Entity to
carry on its business as presently conducted following the Merger.

                                      17
<PAGE>

     6.13  Contracts and Commitments.
           -------------------------

           (a) Schedule 6.13 contains a complete and accurate list of all
               -------------
contracts, agreements, commitments, instruments and obligations (whether written
or oral, contingent or otherwise) of each of IDX and its Subsidiaries of or
concerning the following matters which involve (a) payments by or to any of IDX
or its Subsidiaries in excess of $20,000, (b) performance by or for any of IDX
or its Subsidiaries of services or obligations the value of which is in excess
of $20,000, or (c) performance by or for any of IDX or its Subsidiaries of
services or obligations for greater than 90 days (the "Company Agreements"):

               (i)    the lease (as lessee or lessor) or license (as licensee or
          licensor) of any real or personal property (tangible or intangible);

               (ii)   the employment or engagement of any officer, director,
          employee, consultant or agent (it being agreed however that with
          respect to employment agreements with any particular person other than
          the officers and directors of IDX, such employment agreements need be
          listed only if the aggregate annual salary, benefits and bonuses of
          such person exceeds $75,000);

               (iii)  any relationship with any Shareholder, or any person or
          entity affiliated with or related to any Shareholder or any officer,
          director, employee, consultant or agent of any Company Entity;

               (iv)   any arrangement limiting the freedom of any Company Entity
          or any Company Practice to compete in any manner in any line of
          business;

               (v)    any arrangement that could reasonably be anticipated to
          have a Company Material Adverse Effect;

               (vi)   any arrangement not in the ordinary course of business;

               (vii)  any power of attorney, whether limited or general, granted
          by or to any Company Entity;

               (viii) any promissory notes and other agreements relating to the
          making of any loan or advance to, or by, any Company Entity (and
          including an indication of which such items will continue to remain
          outstanding immediately following the Closing and which such items
          will be satisfied prior to Closing);

               (ix)   any agreements providing for the indemnification by any
          Company Entity of any Person;

               (x)    any agreements with any Authority except those entered
          into in the ordinary course of business which are not material to any
          Company Entity;

               (xi)   any broker, distributor, dealer or representative or
          agency agreements pursuant to which any Company Entity made payments
          in excess of $25,000 during the preceding fiscal year;

               (xii)  any agreements (including settlement agreements) currently
          in effect pursuant to which any Company Entity licenses the right to
          use any Intellectual Property

                                      18
<PAGE>

          to any Person or from any Person (other than license agreements
          related to off-the-shelf software products);

               (xiii)  any confidentiality agreements entered into by any
          Company Entity during the period commencing three years prior to the
          date hereof pursuant to which confidential information has been
          provided to a third party or by which any Company Entity was
          restricted from providing information to third parties, other than
          confidentiality agreements entered into in the normal course of
          business;

               (xiv)   any voting trust or similar agreements relating to any of
          the ownership interests in IDX or any Company Entity or Specified
          Practice to which any of the Shareholders or any Company Entity or
          Specified Practice is a party;

               (xv)    any joint venture, partnership or similar documents or
          agreements;

               (xvi)   any agreement that materially limits or purports to
          materially limit the ability of any Company Entity or Company Practice
          to own, operate, sell, transfer, pledge or otherwise dispose of any
          assets; and

               (xvii)  any agreements with hospitals or laboratories.

           (b) IDX has delivered or made available to AMP true and complete
copies of all Company Agreements.  Except as indicated on Schedule 6.13, the
                                                          -------------
Company Agreements are valid and enforceable in accordance with their terms,
except as may be limited by bankruptcy, insolvency, or other laws affecting
creditors' rights generally, or as may be modified by a court of equity, and
there is not under any of such contracts (i) any existing or claimed default by
any Company Entity or, to the knowledge of any Company Entity, a Specified
Practice or event which with the notice or lapse of time, or both, would
constitute a default by any Company Entity or (ii) to the knowledge of any
Company Entity, any existing or claimed default by any other party or event
which with notice or lapse of time, or both, would constitute a default by any
such party.  Except as indicated on Schedule 6.13, the continuation, validity
                                    -------------
and enforceability of the Company Agreements will not be affected by the Merger
and the Merger will not result in a breach of, or default under, or require the
consent of any other party to any of the Company Agreements.  There is no actual
or, to the knowledge of Company Entity, threatened termination, cancellation or
limitation of any Company Agreements that would have a Company Material Adverse
Effect.  To the knowledge of the Company Entity, there is no pending or
threatened bankruptcy, insolvency or similar proceeding with respect to any
other party to the Company Agreements.

     6.14  Employment and Labor Matters.
           ----------------------------

           (a) Schedule 6.14(a) sets forth (i) the number of full-time and part-
               ----------------
time employees of the Company Entities and Specified Practices, and (ii) the
name and compensation paid to each employee of or consultant to the Company
Entities who currently receives or has received salary, benefits and bonuses for
the two most recently ended fiscal years in excess of $75,000.  Schedule 6.14
                                                                -------------
also sets forth the names of the members of the Board of Directors of each
Company Entity and the officers (and titles) of the officers of each Company
Entity and the President of each Specified Practice.

           (b) Except as set forth on Schedule 6.14(b), each Company Entity and,
                                      ----------------
to the knowledge of any Company Entity, each Specified Practice, is in
compliance in all material respects with all applicable laws respecting
employment and employment practices, terms and conditions of employment, wages
and hours, occupational safety and health, including the National Labor
Relations

                                      19
<PAGE>

Act, the Immigration Reform and Control Act of 1986, Title VII of the Civil
Rights Act of 1964, the Civil Rights Act of 1991, 42 U.S.C. Section 1981, the
Americans With Disabilities Act, the Fair Labor Standards Act, the Occupational
Safety and Health Act, the Family Medical Leave Act, and any other law,
ordinance or regulation respecting the terms and conditions of employment,
including authorization to work in the United States, equal employment
opportunity (including prohibitions against discrimination, harassment, and
retaliation), payment of wages, hours of work, occupational safety and health,
and labor practices.

          (c)  Except as disclosed on Schedule 6.14(c), (and to the knowledge of
                                      ----------------
any Company Entity with respect to any Specified Practice):

               (i)   there are no charges, governmental audits, investigations,
          administrative proceedings or complaints concerning any Company
          Entity's or Specified Practice's employment practices pending or, to
          the knowledge of any Company Entity, threatened before any federal,
          state or local agency or court, and, to the knowledge of any Company
          Entity, no basis for any such matter exists;

               (ii)  to the knowledge of any Company Entity, there are no
          inquiries, investigations or monitoring of activities of any licensed,
          registered, or certified professional personnel employed by,
          credentialed or privileged by, or otherwise providing services to or
          for the benefit of any Company Entity or Specified Practice pending or
          threatened by any state professional board or agency charged with
          regulating the professional activities of health care practitioners;

               (iii) no Company Entity or Specified Practice is a party to any
          union or collective bargaining agreement, and, to the knowledge of any
          Company Entity, no union attempts to organize the employees of any
          Company Entity or Specified Practice have been made, nor are any such
          attempts now threatened;

               (iv)  no Company Entity or Specified Practice has experienced any
          organized slowdown, work interruption, strike, or work stoppage by its
          employees; and

               (v)   there are no pending or, to the knowledge of any Company
          Entity, threatened material claims by any current or former employee
          of any Company Entity or Specified Practice or any employment-related

          claims or investigations by any Authority, including any charges to
          the Equal Employment Opportunity Commission or state employment
          practice agency, investigations regarding compliance with federal,
          state or local wage and hour laws, audits by the Office of Federal
          Contractor Compliance Programs, complaints of sexual harassment or any
          other form of unlawful harassment, discrimination, or retaliation.

     6.15 Employee Benefit Matters.  The employee benefit plans and agreements
          ------------------------
described in Schedule 6.15 hereto are the only employee benefit plans and
             -------------
agreements maintained by any Company Entity or their respective ERISA Affiliates
for the benefit of their shareholders, officers, directors, employees, former
employees, or independent contractors or for the benefit of any Specified
Practice or any of their employees or former employees, or with respect to which
any Company Entity or their respective ERISA Affiliates has or may have any
actual or contingent liability, including, without limitation, (i) profit
sharing, pension, ESOP, 401(k) or other retirement plans or programs, (ii)
current and deferred compensation, severance, vacation, stock purchase, stock
option, bonus and incentive compensation benefits and (iii) medical, hospital,
life, health, accident, disability, death and other fringe

                                      20
<PAGE>

and welfare benefits, including any split-dollar life insurance policies, all of
which plans, programs, practices, policies and other individual and group
arrangements and agreements, including any unwritten compensation, fringe
benefit, payroll or employment practices, procedures or policies of any kind or
description are hereinafter referred to as the "Company Benefit Plans".
                                                ---------------------

     With respect to each Company Benefit Plan, IDX has delivered to AMP (i)
current, accurate and complete copies of each such Company Benefit Plan,
including all trust agreements, insurance or annuity contracts, descriptions,
agreements, participant records and any other material documents or instruments
relating thereto; (ii) copies of the most recent Internal Revenue Service
determination letter (including copies of any outstanding request for
determination letters) with respect to each such Company Benefit Plan which is
an employee pension benefit plan (as such term is defined in Section 3(2) of
ERISA) intended to qualify under Section 401(a) of the Code; (iii) copies of the
most recent Form 5500 Annual Report and accompanying schedules, the most recent
actuarial report (to the extent applicable) and the most recent summary plan
description; and (iv) Forms 5310 and any related filings with the Pension
Benefit Guaranty Corporation with respect to the last six plan years for each
Company Benefit Plan subject to Title IV of ERISA.

     Except as disclosed on Schedule 6.15, there are no contributions or
                            -------------
payments due with respect to any of the Company Benefit Plans, nor will any such
contributions or payments be due or required to be paid on or prior to the
Closing Date.  Except as disclosed on Schedule 6.15, each Company Benefit Plan
                                      -------------
has been operated and administered in substantial compliance with its terms and
with the provisions of ERISA, and the provisions of the Code applicable to it,
and all material reports, returns and similar documents pertaining to each
Company Benefit Plan that are required to be filed with any governmental agency
or distributed to any Company Benefit Plan participant have been duly and timely
filed or distributed (such items required to be disclosed on Schedule 6.15
pursuant to this sentence are sometimes referred to herein as the "Benefits
                                                                   --------
Compliance Matters").  Except as disclosed on Schedule 6.15, no Company Entity
- ------------------                            -------------
nor any of their respective ERISA Affiliates has any actual or contingent
liability under or relating to any plan that is or was a defined benefit plan,
as defined by Section 3(35) of ERISA; it being agreed that IDX shall indemnify
AMP in accordance with Article 12 hereof for any loss, cost, damage or expense
arising out of any such items disclosed on Schedule 6.15.  Each Company Benefit
Plan intended to be qualified under Section 401(a) of the Code is in fact
qualified under Section 401(a) of the Code and exempt from income taxes.  To the
knowledge of any Company Entity, no event has occurred and no condition exists
which could reasonably be expected to result in the revocation of such
qualification.  No event has occurred in connection with a Company Benefit Plan
that could result in liability to any Company Entity under Title IV of ERISA.
No Company Entity nor its ERISA Affiliates have had an "obligation to
contribute" (as defined in ERISA Section 4212) to a "multiemployer pension plan"
(as defined in ERISA Sections 4001(a)(3) and 3(37)(A)) at any time and no
Company Entity or its ERISA Affiliates has any liability (including current or
potential withdrawal liability) with respect to any multiemployer pension plan.
No facts exist which will result in a material increase in the premium costs of
any Company Benefit Plan for which benefits are insured or a material increase
in benefit costs of any Company Benefit Plan which provides self-insured
benefits (other than increases in premium and benefit costs in the ordinary
course of business).  No "prohibited transaction" (as defined in ERISA Section
406 or Code Section 4975) has occurred with respect to any Company Benefit Plan
that is subject to ERISA or Code Section 4975.  None of the Company Benefit
Plans has any current or projected liability in respect of post-employment or
post-retirement health or medical or life insurance benefits for former or
retired employees of any Company Entity, except as required to avoid excise
taxes under Code Section 4980B.  All Company Benefit Plans subject to Code
Section 4980B or Part 6 or 7 of Title I of ERISA have been maintained in
substantial compliance with the requirements of Code Section 4980B and Part 6
and 7 of Title I of ERISA.  Except as disclosed on Schedule 6.15, there is no
                                                   -------------
contract, agreement, plan or

                                      21
<PAGE>

arrangement covering any employee or former employee of any Company Entity that
could result in the payment of any amount that would not be deductible under
Code Section 280G.

     Except as disclosed on Schedule 6.15, the execution of this Agreement and
                            -------------
the performance of the transactions contemplated hereby will not constitute an
event under any Company Benefit Plan that may reasonably be expected to result
in any payment (whether of severance pay or otherwise), acceleration, vesting or
increase in benefits with respect to any employee, former employee or director
of any Company Entity or the Company Practices.  No insurance policy or any
other contract or agreement affecting any Company Benefit Plan requires or
permits a retroactive increase in premiums or payments due thereunder.  No
Company Benefit Plan or any related trust or fiduciary thereof is the direct or
indirect subject of a material audit, investigation or examination by any
governmental or quasi-governmental agency.  As of the Effective Time, no Company
Entity has material liability under any Company Benefit Plan that is not
reflected in the Company Financial Statements, other than routine claims for
benefits and premium and administration costs in the ordinary course of the
operation of the Company Benefit Plans.

     6.16  Insurance Policies.
           ------------------

           (a) Schedule 6.16 sets forth a complete and accurate list and
               -------------
description of all insurance policies in force naming any Company Entity, or any
employee thereof, as an insured or beneficiary or as a loss payee or for which
any Company Entity has paid or is obligated to pay all or part of the premiums
and all policies for each Company Practice, including, without limitation, all
liability, malpractice, fire, health and life insurance policies, and, except as
set forth on Schedule 6.16, each Company Entity, and to the knowledge of any
             --------------
Company Entity, the Company Practices, have maintained such insurance policies,
or policies providing substantially the same coverage, since the inception of
the Company Entity, the Company Practices or any of their predecessors.
Schedule 6.16 shall set forth the name of the insurer, the type of policy,
- -------------
whether it is a "claims made" or "occurrence" based policy, the risks covered
thereby, the amount of premiums, the term of each policy, the policy number, the
amounts of coverage, the deductibles in each case and all outstanding and
reported claims thereunder.  All policies listed on Schedule 6.16 (but to the
                                                    -------------
knowledge of any Company Entity as to policies of the Specified Practices) are
in full force and effect and the premiums due thereon have been timely paid.  No
Company Entity has, and to the knowledge of any Company Entity, no Specified
Practice has, received notice of any pending or threatened termination or
premium increase (retroactive or otherwise) with respect thereto, and, to the
knowledge of any Company Entity, each Company Entity and the Company Practices
are in compliance with all conditions contained therein.  Except as set forth on
Schedule 6.16, there are no pending claims against such insurance by any Company
- -------------
Entity or, to the knowledge of any Company Entity, the Specified Practices, as
to which insurers are defending under reservation of rights or have denied
liability, and except as set forth on Schedule 6.16, there exists no claim
                                      -------------
covered under such insurance that has not been properly filed by a Company
Entity or, to the knowledge of any Company Entity, the Specified Practices.  To
the knowledge of any Company Entity, there are no outstanding or unfulfilled
requirements or recommendations of any insurance company insuring any Company
Entity regarding any repairs to or work to be performed with respect to the
assets of any Company Entity.  Each Company Entity and, to the knowledge of any
Company Entity, the Specified Practices, have complied with any such
requirements and recommendations as to which any Company Entity or the Company
Practices have received notice.  Schedule 6.16 contains a listing of all claims
                                 -------------
made and loss histories in respect of any insurance maintained by any Company
Entity or any predecessor during the past three (3) years.

           (b) To any Company Entity's knowledge, except as set forth on
Schedule 6.16(b), none of the licensed professional employees or agents of any
- ----------------
Company Entity or the Company Practices

                                      22
<PAGE>

and none of the licensed professionals with privileges to use any of any Company
Entity's or Specified Practice's facilities have, while providing services to
any Company Entity or Specified Practice, filed a written application for
professional malpractice insurance coverage which has been denied by an
insurance agency or carrier and such persons have been continuously insured for
professional malpractice claims during the same period, and none of such persons
is in default with respect to any provisions contained in any such policy and
none of them has failed to give any notice or present any claim under any such
policy in due time and timely fashion.

     6.17  Environmental Matters.
           ---------------------

           (a) Except as set forth in Schedule 6.17, there are no present or
                                      -------------
past Environmental Conditions in any way relating to the business, properties or
assets of any Company Entity or, to the knowledge of any Company Entity, of the
Specified Practices,. For the purposes of this Section 6.17, "Environmental
Condition" means (a) the introduction into the environment of any pollution,
including without limitation any contaminant, irritant or pollutant or other
toxic or hazardous substance, in violation of any federal, state or local law,
ordinance or governmental rule or regulations, as a result of any spill,
discharge, leak, emission, escape, injection, dumping or release of any kind
whatsoever of any substance or exposure of any type in any work places or to any
medium, including without limitation air, land, surface waters or ground waters,
or from any generation, transportation, treatment, discharge, storage or
disposal of waste materials, raw materials, hazardous materials, toxic materials
or products of any kind or from the storage, use or handling of any hazardous or
toxic materials or other substances, as a result of which any Company Entity has
or may become liable to any person or by any reason of which any of the assets
of any Company Entity may suffer or be subjected to any Lien, encumbrance or
restriction of any nature, or (b) any noncompliance with any federal, state or
local environmental law, rule, regulation or order as a result of or in
connection with any of the foregoing.

           (b) Each Company Entity, and to the knowledge of any Company Entity,
each Specified Practice, has obtained and maintained in full force and effect,
all environmental permits, licenses, certificates of compliance, approvals and
other authorizations necessary to conduct the activities and business of such
Company Entity or Specified Practice as currently conducted and to own or
operate its business (collectively the "Environmental Permits").  Each Company
Entity, and to the knowledge of any Company Entity, each Specified Practice, has
conducted its activities and business in compliance in all material respects
with all terms and conditions of any Environmental Permits.  Each Company
Entity, and to the knowledge of any Company Entity, each Specified Practice, has
filed all reports and notifications required to be filed under applicable
Environmental Laws, and timely filed applications for all Environmental Permits,
except for those where the failure to file would not have a Company Material
Adverse Effect.  None of the Environmental Permits require consent,
notification, or other action to remain in full force and effect following
consummation of the transaction contemplated hereby.

     6.18  Accounts Receivable and Payable.  The accounts receivable reflected
           -------------------------------
on the IDX Interim Financial Statements as of September 30, 2000 (a true and
complete listing of which is set forth on Schedule 6.18(a)), represent bona fide
                                          -----------------
claims for services actually rendered and goods actually provided, subject to no
defenses, counterclaims, or rights of setoff other than those arising in the
ordinary course of business and for which the reserves that have been
established therefor have been reasonably determined in accordance with GAAP and
past practice and based on historical collection experience, and any known
writeoffs or writedowns have been made (or will be made by IDX in the "Pre-
Closing Balance Sheet" contemplated in Section 8.17(c)).  Schedule 6.18(a) sets
                                                          ----------------
forth a true and correct aging schedule of all accounts receivable of IDX on a
consolidated basis as of September 30, 2000 and indicating the receivables under
30 days, over 30 days, over 60 days, and over 90 days.

                                      23
<PAGE>

     The consolidated accounts receivable of IDX outstanding as of the Effective
Date will represent bona fide claims for services actually rendered and goods
actually provided, subject to no defenses, counterclaims, or rights of setoff
other than those arising in the ordinary course of business and for which the
reserves that have been established therefor as of such time will have been
reasonably determined in accordance with GAAP and past practice and based on
historical collection experience, and any known writeoffs or writedowns as of
such time will have been made.

     Except as set forth on Schedule 6.18(b), no accounts payable of the Company
                            ----------------
Entities are, at this date, over 60 days old and no accounts payable of the
Company Entities will be over 60 days old at the Closing Date.

     6.19  Taxes.
           -----

           (a) Each Company Entity has filed all Tax Returns that such Company
Entity was required to file, taking into account permitted extensions.  All such
Tax Returns were correct and complete in all material respects, and all taxes
shown as payable thereon have been or will be paid prior to the applicable date
due.  All Taxes owed by each Company Entity (whether or not shown on any Tax
Return and whether or not any Tax Return was required) have been paid or
adequately reserved for in their respective tax and accounting books and
records.  No Company Entity is currently the beneficiary of any extension of
time within which to file any Tax Return.  No claim has ever been made by a
taxing authority in a jurisdiction where any Company Entity does not file Tax
Returns that such Company Entity is or may be subject to taxation by that
jurisdiction.  There are no liens on any of the assets of any Company Entity
that arose in connection with any failure (or alleged failure) to pay any Tax,
except for liens for Taxes not yet due.

           (b) Each Company Entity has withheld and paid, or properly segregated
or deposited as required by applicable laws, all Taxes required to have been
withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder or other third party.

           (c) To the knowledge of the Company Entities, no officer (or employee
responsible for Tax matters) of any Company Entity expects any taxing authority
to assess (and no taxing authority has assessed) any additional Taxes for any
period for which Tax Returns have been filed.  There is no dispute or claim
concerning any Tax liability of any Company Entity either (i) claimed or raised
by any taxing authority in writing or (ii) to the knowledge of the Company
Entities, whether based upon personal contact with any agent of such taxing
authority or otherwise.  Schedule 6.19(c) lists all Federal, state, local and
                         ----------------
foreign income Tax Returns filed with respect to each Company Entity during the
past five years, and Schedule 6.19(c) also indicates which of such Tax Returns
                     ----------------
have been audited and indicates those Tax Returns that currently are the subject
of audit or in respect of which any written or unwritten notice of any audit or
examination has been received by any Company Entity.  No issue relating to Taxes
has been raised in writing by a taxing authority during any pending audit or
examination, and no issue relating to Taxes was raised in writing by a taxing
authority in any completed audit or examination, that reasonably can be expected
to recur in a later taxable period.  IDX has delivered or made available to AMP
correct and complete copies of all Federal income Tax Returns, examination
reports and statements of deficiencies assessed against or agreed to by any
Company Entity.

           (d) No Company Entity has waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency that is currently in effect.

                                      24
<PAGE>

          (e)  No Company Entity has filed a consent under Section 341(f) of the
Code concerning collapsible corporations.  No Company Entity has made any
payments, is obligated to make any payments or is a party to any agreement that
under certain circumstances could obligate it to make any payments that will not
be deductible under section 280G of the Code.  No Company Entity has been a
United States real property holding corporation within the meaning of Section
897(c)(2) of the Code during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code.  Each Company Entity, as applicable, has disclosed
on its Federal income Tax Returns all positions taken therein that reasonably
could be expected to give rise to a substantial understatement of Federal income
Tax within the meaning of Section 6662 of the Code.  No Company Entity is a
party to any Tax allocation or sharing agreement.  No Company Entity (i) has
been a member of an Affiliated Group filing a consolidated Federal income Tax
Return or (ii) has any liability for the Taxes of any Person under Treasury
regulation section 1.1502-6 (or any similar provision of state, local or foreign
law), as a transferee or successor, by contract or otherwise.

          (f)  The unpaid Taxes of each Company Entity (i) did not, as of the
most recent fiscal month end, exceed the reserve for Tax liability (rather than
any reserve for deferred Taxes established to reflect timing differences between
book and Tax income) set forth on the face of the most recent balance sheet
(rather than in any notes thereto) for such Company Entity and (ii) do not
exceed that reserve as adjusted for the passage of time through the Closing Date
in accordance with the past custom and practice of such Company Entity in filing
its Tax Returns.

          (g)  Except as disclosed in Schedule 6.19(g), no Company Entity shall
                                      ----------------
be required to include in a taxable period ending after the Closing Date taxable
income attributable to income that accrued in a prior taxable period but was not
recognized in any prior taxable period as a result of the installment method of
accounting, the completed contract method of accounting, the long-term contract
method of accounting, the cash method of accounting or Section 481 of the Code
or any comparable provision of state, local or foreign tax law.

          (h)  Except as set forth in Schedule 6.19(h), no Company Entity is a
                                      ----------------
party to any joint venture, partnership or other arrangement or contract that
could be treated as a partnership for Federal income tax purposes.

          (i)  Except as set forth on Schedule 6.19(i), no Company Entity has
                                      ----------------
entered into any sale leaseback or leveraged lease transaction that fails to
satisfy the requirements of Revenue Procedure 75-21 (or similar provisions of
foreign law) or any safe harbor lease transaction.

          (j)  Except as set forth on Schedule 6.19(j), no Company Entity has
                                      ----------------
been an S corporation (within the meaning of Section 1361(a)(1) of the Code).

          (k)  All material elections with respect to Taxes affecting each
Company Entity are disclosed or attached to a Tax Return of that Company Entity.
The basis of any depreciable assets, and the methods used in determining
allowable depreciation (including cost recovery), is materially correct and in
compliance with the Code.

          (l)  All private letter rulings issued by the Internal Revenue Service
to any Company Entity (and any corresponding ruling or determination of any
state, local or foreign taxing authority) have been disclosed on Schedule
                                                                 --------
6.19(l), and there are no pending requests for any such rulings (or
- -------
corresponding determinations).

                                      25
<PAGE>

          (m)  IDX shall grant to AMP or its designees access at all reasonable
times to all books and records (including tax workpapers and returns and
correspondence with tax authorities), including the right to take extracts
therefrom and make copies thereof, to the extent such books and records relate
to taxable periods ending on or prior to or that include the Closing Date with
respect to any Company Entity.

          (n)  Except as otherwise set forth on Schedule 6.19(n), the
                                                ----------------
acquisition of the ownership of the IDX Common Stock by AMP pursuant to the
terms of this Agreement will not result in any Tax liability to any Company
Entity or result in a reduction of the amount of any net operating loss, net
operating loss carryover, net capital loss, net capital loss carryover, Tax
credit, Tax credit carryover, excess charitable contribution or basis of
property that otherwise would be available to any Company Entity by reason or as
a result of deferred intercompany transactions, excess loss accounts, or similar
applicable rules under state or local law.

          (o)  For purposes of this Agreement, in the case of any period that
begins before the Closing Date and ends after the Closing Date, any tax based
directly or indirectly on gross or net income or receipts or imposed in respect
of specific transactions, and any credits available with respect to any Tax,
shall be allocated by assuming that the taxable period ended on the Closing
Date, and any other tax shall be allocated based on the number of days in the
taxable period ending on the Closing Date divided by the total number of days in
the taxable period.

          (p)  Except as set forth on Schedule 6.19(p), there are no
                                      ----------------
intercompany transactions as defined in Treasury regulation section 1.1502-13
(or any deferred intercompany transaction under the predecessor Treasury
regulations) between any Company Entities on which any income, deduction, gain,
loss or credit between any of the Company Entities has been deferred, and there
is no excess loss account within the meaning of Treasury regulation section
1.1502-19 (or any predecessor of that regulation) in the stock of any Company
Entity.

          (q)  Except as set forth on Schedule 6.19(q), no Company Entity is or
                                      ----------------
has been a controlled corporation or a distributing corporation in respect of a
distribution to which Section 355(e) of the Code would apply by reason of the
occurrence of the Merger.

          (r)  Except as set forth on Schedule 6.19(r), no limitation under
                                      ----------------
Section 382 or Section 383 of the Code or under any provision of any
consolidated return regulation applies to any net operating loss, net operating
loss carryover, capital loss, capital loss carryover, Tax credit, Tax credit
carryover or built-in loss of any Company Entity by reason of any change of
control or other transaction that occurred prior to the Closing Date.

          (s)  "Affiliated Group" shall mean any affiliated group within the
                ----------------
meaning of Section 1504(a) of the Code or any similar group defined under a
similar provision of state, local or foreign law.

          (t)  For purposes of this Section 6.19, the term "Company Entities"
shall mean IDX and its Subsidiaries, and any other corporation (if any) that is
a member of any Affiliated Group of which IDX is the common parent.

     6.20 Licenses, Authorizations and Provider Programs.
          ----------------------------------------------

          (a)  Except as set forth on Schedule 6.20(a), each Company Entity and
                                      ----------------
each licensed professional engaged by a Company Entity, and, to the knowledge of
the Company Entities, each

                                      26
<PAGE>

Specified Practice and each licensed professional engaged by a Specified
Practice: (i) is the holder of all valid licenses and other rights and
authorizations required by law, ordinance, regulation or ruling of any
governmental regulatory authority necessary for the Company Entity and, to the
knowledge of the Company Entity , the Specified Practices, to operate their
business; and (ii) where required, is certified for participation and
reimbursement under Titles XVIII and XIX of the Social Security Act (the
"Medicare and Medicaid programs") (Medicare and Medicaid programs and such other
similar federal, state or local reimbursement or governmental programs for which
the Company is eligible are hereinafter referred to collectively as the
"Government Programs") and has current provider agreements for such Government
Programs and with such private non-governmental programs, including without
limitation any private insurance program, under which any Company Entity and, to
the knowledge of any Company Entity, the Specified Practices, directly or
indirectly are presently receiving payments (such non-governmental programs
herein referred to as "Private Programs"), except for any failures to have any
of such items referenced in the foregoing clauses (i) or (ii) that would not
individually or in the aggregate result in a Company Material Adverse Effect.
Set forth on Schedule 6.20(a), is a correct and complete list of such licenses,
             ----------------
permits and other authorizations, complete and correct copies of which have been
provided or made available to AMP.  Except as set forth on Schedule 6.20(a),
                                                           ----------------
there are no surveys of any Company Entity or their facilities, and to the
knowledge of the Company Entities, there are no surveys of any Specified
Practice or their facilities, conducted in connection with any Government
Program, Private Program or licensing or accrediting body for which there are
open deficiencies.

          (b)  Except as set forth on Schedule 6.20(b), no violation, default,
                                      ----------------
order or deficiency exists (to the knowledge of the Company Entities with
respect to the Specified Practices) with respect to any of the items listed on
Schedule 6.20(a), except for any such violations, defaults, orders or
- ----------------
deficiencies that would not individually or in the aggregate result in a Company
Material Adverse Effect.  No Company Entity nor, to the knowledge of a Company
Entity, the Specified Practices, have received any notice of any action pending
or recommended by any state or federal agencies having jurisdiction over the
items listed on Schedule 6.20(a), either to revoke, withdraw or suspend any
                ----------------
license, right or authorization, or to terminate the participation of any
Company Entity or, to the knowledge of any Company Entity, any Specified
Practice, in any Government Program or Private Program.  To the knowledge of any
Company Entity, no event has occurred which, with the giving of notice, the
passage of time, or both, would constitute grounds for a material violation,
order or deficiency with respect to any of the items listed on Schedule 6.20(a)
                                                               ----------------
or to revoke, withdraw or suspend any such license, or to terminate or modify
the participation of any Company Entity or any Company Practice in any
Government Program or Private Program, except for any such events that would not
individually or in the aggregate result in a Company Material Adverse Effect.
To the knowledge of any Company Entity, there has been no decision not to renew
any provider or third-party payor agreement with any Company Entity or Company
Practice.  Except as listed on Schedule 6.20(b), no consent or approval of,
                               ----------------
prior filing with or notice to, or any action by, any governmental body or
agency or any other third party is required in connection with any such license,
right or authorization, or Government Program or Private Program, by reason of
the consummation of the Merger, and the continued operation of the business of
any Company Entity and, to the knowledge of any Company Entity, the Company
Practices thereafter on a basis consistent with past practices.

          (c)  Each Company Entity and, to the knowledge of each Company Entity,
the Specified Practices, have timely filed all reports and billings required to
be filed prior to the date hereof with respect to the Government Programs and
Private Programs, all fiscal intermediaries and other insurance carriers and all
such reports are complete and accurate in all material respects and have been
prepared in accordance with all applicable laws, regulations, and principles
governing reimbursement and payment claims, except for any failures to comply
with such requirements that would not individually or in the aggregate result in
a Company Material Adverse Effect.  Each Company Entity and,

                                      27
<PAGE>

to the knowledge of each Company Entity, the Specified Practices, have paid or
caused to be paid or have properly reflected in the Company Financial Statements
all known and undisputed refunds, overpayments, discounts or adjustments which
have become due pursuant to such reports and has no liability under any
Government Program or Private Program (known or unknown, contingent or
otherwise) for any refund, overpayment, discount or adjustment other than in the
ordinary course, and no interest or penalties accruing with respect thereto,
except as has been specifically reserved for in the Financial Statements or
disclosed herein or in the Schedules hereto. To the knowledge of any Company
                           ---------
Entity, there are no pending appeals, adjustments, challenges, audits,
litigation, or notices of intent to challenge any billings or accounts
receivable of any Company Entity or any of the Company Practices, including
those generated by licensed professionals engaged by Company Entity and the
Company Practices.

     6.21  Inspections and Investigations.
           ------------------------------

           (a) Except as set forth and described in Schedule 6.21(a), (i) no
                                                    ----------------
Company Entity's right nor, to the knowledge of any Company Entity, the right of
any Specified Practice or licensed professional or other individual affiliated
with a Company Entity or Company Practice to receive reimbursements pursuant to
any Government Program or Private Program has ever been terminated or otherwise
adversely affected as a result of any investigation or action whether by any
federal or state governmental regulatory authority or other third party, (ii) no
Company Entity, nor to the knowledge of any Company Entity, any Specified
Practice or any licensed professional or other individual affiliated with any
Company Entity or Company Practice (including without limitation directors,
officers and employees of the Company Entities and Specified Practices), has
during the past three (3) years been the subject of any inspection,
investigation, survey, audit, monitoring or other form of review by any
governmental regulatory entity, trade association, professional review
organization, accrediting organization or certifying agency for the purpose of
any alleged improper activity on the part of such entity or individual, other
than routine audits or inquiries (a) under the Health Care Financing
Administration ("HCFA") audit programs or (b) by state or local agencies, nor
has any Company Entity nor, to the knowledge of each Company Entity, any
Specified Practice, received any notice of deficiency in connection with its
operations that remains open, (iii) there are not presently (but to the
knowledge of the Company Entities with respect to the Specified Practices), and
each Company Entity will take commercially reasonable efforts so that, on the
Closing Date there will not be any, outstanding deficiencies or work orders of
any governmental authority having jurisdiction over any Company Entity or the
Company Practices, or other third party, requiring conformity to any applicable
agreement, statute, regulation, ordinance or bylaw, including but not limited
to, the Government Programs and Private Programs, and (iv) each Company Entity
and, to the knowledge of the Company Entities, the Specified Practices have not
received any notice of any claim, requirement or demand of any licensing or
certifying agency or other third party supervising or having authority over any
Company Entity or the Company Practices or their operations to rework or
redesign any part thereof or to provide additional furniture, fixtures,
equipment, appliances or inventory so as to conform to or comply with any
existing law, code, rule, regulation or standard; other than any of such items
required to be disclosed in Schedule 6.21(a) under the foregoing clauses (i)
through (iv) which would not individually or in the aggregate have a Company
Material Adverse Effect.  Attached as part of Schedule 6.21(a) are copies of all
                                              ----------------
reports, correspondence, notices and other documents relating to any matter
described or referenced therein.

           (b) Attached to Schedule 6.21(b) is a copy of the compliance
                           ----------------
programs, together with the minutes of any meetings or committees thereof or
other body established by IDX for the purpose of monitoring compliance efforts
by the Company Entities and Company Practices.

                                      28
<PAGE>

     6.22  Certain Relationships.  Except as set forth on Schedule 6.22, no
           ---------------------                          -------------
Company Entity has and, to the knowledge of any Company Entity, none of the
Specified Practices, have engaged in any of the following activities in order to
induce the referral of patients:

               (i)   offered, paid, solicited or received anything of value,
          paid directly or indirectly, overtly or covertly, in cash or in kind
          ("Remuneration") to or from any physician, family member of a
          physician, or an entity in which a physician or physician family
          member has an ownership or investment interest, including, but not
          limited to:

                     (A) payments for personal or management services pursuant
               to a medical director agreement, consulting agreement, management
               contract, personal services agreement, or otherwise;

                     (B) payments for the use of premises leased to or from a
               physician, a family member of a physician or an entity in which a
               physician or family member has an ownership or investment
               interest;

                     (C) payments for the acquisition or lease of equipment,
               goods or supplies from a physician, a family member of a
               physician or an entity in which a physician or family member has
               an ownership or investment interest; or

               (ii)  offered, paid, solicited or received any Remuneration
          (excluding fair market value payments for services, equipment or
          supplies) to or from any healthcare provider, pharmacy, drug or
          equipment supplier, distributor or manufacturer, including, but not
          limited to:

                     (A) made payments or exchanges of anything of value under a
               warranty provided by a manufacturer or supplier of an item to any
               Company Entity or a Company Practice; or

                     (B) made discounts, rebates, or other reductions in price
               on a good or service received by any Company Entity or a Company
               Practice;

               (iii) offered, paid, solicited or received any Remuneration to
          or from any person or entity in order to induce business, including,
          but not limited to, payments intended not only to induce referrals of
          patients, but also to induce the purchasing, leasing, ordering or
          arrangement for any good, facility, service or item;

               (iv)  entered into any joint venture, partnership, co-ownership
          or other arrangement involving any ownership or investment interest by
          any physician, or family member of a physician, or an entity in which
          physician or physician family member has an ownership or investment
          interest, directly or indirectly, through equity, debt, or other
          means, including, but not limited to, an interest in an entity
          providing goods or services to any Company Entity or a Company
          Practice;

               (v)   entered into any joint venture, partnership, co-ownership
          or other arrangement involving any ownership or investment interest by
          any person or entity including, but not limited to, a hospital,
          pharmacy, drug or equipment supplier, distributor or manufacturer,
          that is or was in a position to make or influence referrals,

                                      29
<PAGE>

          furnish items or services to, or otherwise generate business for any
          Company Entity or a Company Practice; or

               (vi) entered into any agreement providing for the referral of any
          patient for the provision of goods or services by any Company Entity
          or a Company Practice, or payments by any Company Entity or a Company
          Practice as a result of any referrals of patients to any Company
          Entity or a Company Practice.

     6.23 Health Care Laws and Regulations.
          --------------------------------

          (a)  Except as set forth on Schedule 6.23(a), each Company Entity and,
                                      ----------------
to the knowledge of any Company Entity, the Specified Practices, have not
engaged in any activities which are prohibited under federal Medicare and
Medicaid statutes, 42 U.S.C. Section 1320a-7a and 7b, or the  regulations
promulgated pursuant to such statutes or similar or related state or local
statutes or regulations or which would otherwise violate state or local statutes
or regulations, including without limitation prohibitions on fee splitting and
the corporate practice of medicine, or which are prohibited by rules of
professional conduct or which otherwise could constitute fraud, including but
not limited to the following:  (i) making or causing to be made a false
statement or representation of a material fact in any application for any
benefit or payment; (ii) making or causing to be made any false statement or
representation of a material fact for use in determining rights to any benefit
or payment; and (iii) soliciting, paying or receiving any remuneration
(including any kickback, bribe, or rebate), directly or indirectly, overtly or
covertly, in cash or in kind or offering to pay such remuneration (a) in return
for referring an individual to a Person for the furnishing or arranging for the
furnishing of any item or service for which payment may be made in whole or in
part by Medicare or Medicaid, or (b) in return for purchasing, leasing, or
ordering or arranging for or recommending purchasing, leasing, or ordering any
good, facility, service, or item for which payment may be made in whole or in
part by Medicare and Medicaid; other than any of such items required to be
disclosed in Schedule 6.23(a) under the foregoing clauses (i) through (iii)
which would not individually or in the aggregate have a Company Material Adverse
Effect.

          (b)  To the knowledge of the Company Entities, all agreements of the
Company Entities and the Specified Practices with third-party payors were
entered into by the Company Entities, and to the knowledge of each Company
Entity, the Specified Practices, in the ordinary course of business.  The
Company Entities and, to the knowledge of each Company Entity, the Specified
Practices, are in material compliance with each of its third-party payor
agreements, and each Company Entity, and to the knowledge of each Company
Entity, each of the Specified Practices, has properly charged and billed in
accordance with the terms of its third-party payor agreements, including, where
applicable, billing and collection of all deductibles and co-payments, except to
the extent that any failure to be in compliance or properly charge and bill
would not, individually or in the aggregate, have a Company Material Adverse
Effect.

          (c)  Each Company Entity, and to the knowledge of each Company Entity,
each Specified Practice, has timely and accurately filed all requisite claims
and other reports required to be filed in connection with all state and federal
Medicare and Medicaid programs in which a Company Entity or Company Practice
participates due on or before the Closing Date except to the extent that the
failure to file such claims and reports would not result in a Company Material
Adverse Effect.  Except as set forth on Schedule 6.23(c), there are no Claims
                                        ----------------
pending or, to the knowledge of any Company Entity, threatened or scheduled,
before any authority, including without limitation, any intermediary, carrier,
the Administrator of the Health Care Financing Administration, or any other
state or federal agency with respect to any Medicare and Medicaid claim filed by
any Company Entity, or, to the knowledge of each

                                      30
<PAGE>

Company Entity, by any Specified Practice, on or before the Closing Date, or
program compliance matters, which would have a Company Material Adverse Effect.
IDX has delivered to AMP accurate and complete copies of any Claims, actions or
appeals listed on Schedule 6.23(c). Except for routinely scheduled reviews, no
                  ----------------
valid review or program integrity review related to any Company Entity or, to
the knowledge of each Company Entity, any Specified Practice, has been conducted
by any authority in connection with the Medicare or Medicaid programs and no
such review is scheduled, or to the knowledge of any Company Entity, pending or
threatened against or affecting any Company Entity or Company Practice, its
business, assets, or the consummation of the transactions contemplated hereby.

          (d) Each facility currently operated by any Company Entity or Company
Practice (and to the knowledge of the Company Entities with respect to the
Specified Practices) charges rates and accordingly bills for services which are
legal and proper.  Certain reimbursement rates established by third-party payors
are subject to retrospective adjustment, which adjustments are set forth on
Schedule 6.23(d).
- ----------------

          (e) Except as set forth on Schedule 6.23(e), no Person having a
                                     ----------------
"financial relationship" with any Company Entity or Company Practice, as that
term is defined in 42 U.S.C. Section 1395nn, directly or indirectly refers
patients or services to any Company Entity or, to the knowledge of the Company
Entities, to any Specified Practices, other than referrals which comply with (or
are exempt from) the requirements of 42 U.S.C. Section 1395nn and the
regulations promulgated pursuant thereto.

          (f) Except as set forth on Schedule 6.23 (f), the structure and
                                     -----------------
operations of each Company Practice are in compliance with applicable state and
local statutes and regulations, including without limitation state laws relating
to the corporate practice of medicine, fee-splitting, and fraud and abuse, other
than any failures in such compliance which would not individually or in the
aggregate have a Company Material Adverse Effect.

     6.24  Interested Transactions.  Except as set forth in Schedule 6.24, no
           -----------------------                          -------------
Company Entity nor, to the knowledge of any Company Entity, any of the Specified
Practices, are a party to any contract, loan or other transaction with any
Shareholder nor does any Company Entity or, to the knowledge of any Company
Entity, any of the Specified Practices, have any direct or indirect interest in
or affiliation with any Shareholder to any such contract, loan or other
transaction.  To the knowledge of the Company Entities, no Shareholder is an
employee, consultant, partner, principal, director or owner of, or has any other
direct or indirect interest in or affiliation with, any person or business
entity that is engaged in a business that competes with or is similar to the
business of the Company Entities or the Company Practices.

     6.25  Intellectual Property.
           ---------------------

          (a) Each Company Entity is the sole and exclusive owner, or has the
valid right to use, sell and license, the Intellectual Property necessary or
otherwise material to the conduct of the business of IDX and such Company Entity
as now conducted.  Each such item of Intellectual Property will be owned by or
available for use by the Company Entities on substantially identical terms
immediately subsequent to the Closing, free and clear of all Liens.  For
purposes of this Section 6.25, the term "Liens" shall not include any license
agreement or lease pursuant to which the Company Entities have the right to use
any Intellectual Property. Schedule 6.25(a) sets forth a complete and accurate
                           ----------------
list (including whether the Company Entity is the owner or licensee thereof) of
all (i) patents and patent applications, (ii) trademark or service mark
registrations and applications, (iii) copyright registrations and applications
and (iv) material unregistered copyrights, service marks, trademarks and trade
names, each as owned or licensed by the Company Entities.  Except as otherwise
disclosed on Schedule 6.25(a), each
             ----------------

                                      31
<PAGE>

Company Entity currently is listed in the records of the appropriate United
States, state or foreign agency as the sole owner of record for each owned
application and registration listed on Schedule 6.25(a).
                                       ----------------

          (b) Except as provided on Schedule 6.25(b), the registrations listed
                                    ----------------
on Schedule 6.25(a) are valid and subsisting, in full force and effect in all
   ----------------
material respects and have not been canceled, expired or abandoned. There is no
pending, existing, or to the knowledge of any Company Entity, threatened,
opposition, interference, cancellation proceeding or other legal or governmental
proceeding before any court or registration authority in any jurisdiction
against the registrations listed on Schedule 6.25(a).
                                    ----------------

          (c) Schedule 6.25(c) lists all of the computer software applications
              ----------------
programs ("Computer Programs") (other than commercially available "off-the-
           -----------------
shelf" applications), which are owned, licensed, leased or otherwise used by any
Company Entity in connection with the operation of its businesses as currently
conducted, and identifies which is owned, licensed, leased, or otherwise used,
as the case may be. Each Computer Program listed on Schedule 6.25(c) is either
                                                    ----------------
(i) owned by a Company Entity, (ii) currently in the public domain or otherwise
available to a Company Entity without the license, lease or consent of any third
party or (iii) used under rights granted to a Company Entity pursuant to a
written agreement, license or lease from a third party, which written agreement,
license or lease is set forth on Schedule 6.25(c).  The Company Entities use the
                                 ----------------
Computer Programs set forth on Schedule 6.25(c) in connection with the operation
                               ----------------
of their respective businesses as conducted on the date hereof and, to the
knowledge of any Company Entities, such use does not violate the rights of any
third party. All Computer Programs owned by the Company Entities and set forth
in Schedule 6.25(c) were either developed by (x) employees of the Company
   ----------------
Entities within the scope of their employment, (y) third parties as "work-made-
for-hire", as that term is defined under Section 101 of the United States
copyright laws, pursuant to written agreements or (z) independent contractors
who have assigned their rights to the Company Entities pursuant to written
agreements.

          Year 2000 Compliance of Computer Software and Hardware.  The current
          ------------------------------------------------------
computer software applications, operating systems, and computer information
systems hardware, used by the Company Entities and the Company Practices in the
operation of their business (and to the knowledge of the Company Entities with
respect to the Specified Practices) are "Year 2000 Compliant"(defined as
follows).  "Year 2000 Compliant" means that, such software, hardware and data,
without causing failures in software, firmware or hardware and without leading
to invalid or incorrect results during operation prior to, during and after the
calendar year 2000 A.D., will:  (i) operate during and after the calendar year
2000 without error relating to the date data, (ii) properly use, recognize and
indicate dates in the Year 2000 and beyond as both input and output, including
without limitation, in any calculation of dates or length of time in the same
century or in multiple centuries; and (iii) conform to proper leap year
calculations for the Year 2000 and thereafter.

          (d) Schedule 6.25(d) sets forth as of the date hereof a complete and
              ----------------
accurate list of all agreements pertaining to the use of or granting any right
to use or practice any rights under any Intellectual Property, whether a Company
Entity is the licensee or licensor thereunder (the "Licenses") and any written
settlements or assignments relating to any Intellectual Property.  The Licenses
are valid and binding obligations of each party thereto, and to the knowledge of
any Company Entity, enforceable against each such party in accordance with their
terms, except that (i) such enforcement may be subject to applicable bankruptcy,
insolvency or other similar laws, now or hereafter in effect, affecting
creditors' rights generally and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought, and there are no breaches or defaults under any Licenses.

                                      32
<PAGE>

          (e) No trade secret or confidential know-how material to the business
of any Company Entity as currently operated has been disclosed or authorized to
be disclosed to any third party, other than pursuant to a non-disclosure
agreement that protects any Company Entity's proprietary interests in and to
such trade secrets and confidential know-how, and other than disclosures to
employees, officers, directors, agents, attorneys, accountants, consultants,
independent contractors or other representatives of the Company Entities, each
of whom is obligated (by contract, employment policy, cannons of ethics or the
like) to maintain the confidentiality of such information.

          (f) To the knowledge of the Company Entities, the conduct of the
business of the Company Entities and Company Practices does not infringe upon
any intellectual property right owned or controlled by any third party and to
the knowledge of the Company Entities, no third party is infringing upon any
Intellectual Property owned by the Company Entities and no such claims have been
made against a third party by the Company Entities.  There are no claims or
suits pending or, to the knowledge of the Company Entities, threatened, and the
Company Entities have not received any written notice of a third party claim or
suit (x) alleging that the activities of the Company Entities or the conduct of
their businesses infringes upon or constitutes the unauthorized use of the
proprietary rights of any third party or (y) challenging the ownership, use,
validity or enforceability of the Intellectual Property.

          (g) There are no settlements, consents, judgments, orders or other
agreements to which any Company Entity is subject which restrict the rights of
any Company Entity to use any Intellectual Property, or other agreements which
restrict the rights to use any Intellectual Property owned by the Company
Entities.

          (h) The consummation of the transactions contemplated hereby will not
result in the loss or impairment of the right of AMP, Merger Corp or the
Surviving Corporation or any of their successors to own, use, license or
sublicense any of the Intellectual Property currently owned, used, licensed or
sublicensed by the Company Entities nor will it require the consent of any
Authority or third party in respect of any such Intellectual Property and no
present or former employee, or officer of the Company Entities has any right,
title or interest, directly or indirectly, in whole or in part, in any
Intellectual Property.

     6.26  Rights Plan.  IDX does not have, and the Board of Directors of IDX
           -----------
has not approved, any stockholder rights plan, poison pill or similar
arrangement.

     6.27  Lack of Ownership of AMP Common Stock.   No Company Entity and, to
           -------------------------------------
the knowledge of the Company Entities without inquiry, no Shareholder, owns any
shares of AMP Common Stock or other securities convertible into shares of AMP
Common Stock.

     6.28  Opinion of Financial Advisor.  The Board of Directors of IDX has
           ----------------------------
received the opinion of SunTrust Equitable Securities, dated as of the date
hereof, to the effect that, as of such date, the Merger Consideration is fair to
holders of IDX Common Stock from a financial point of view (the "Financial
                                                                 ---------
Advisor Opinion"), a copy of which opinion is attached to Schedule 6.28.
- -----------------                                         -------------

     6.29  Required Vote of Company Shareholders.   The affirmative vote of the
           -------------------------------------
holders of a majority of the outstanding shares of IDX Common Stock is required
and sufficient to approve the Merger.  No other vote or approval of the
Shareholders of IDX is required by law, the charter or bylaws of IDX or
otherwise in order for IDX to consummate the Merger and the transactions
contemplated hereby.  The number of shares of IDX Common Stock held by the
Signing Shareholders (who are listed on Schedule 6.29), if voted to approve the
                                        -------------
Merger at the IDX Shareholders Meeting, will provide a sufficient number of
votes required to approve the Merger under the TBCA.

                                      33
<PAGE>

     6.30  Pooling of Interests; Section 368 Reorganization.   To the knowledge
           ------------------------------------------------
of the Company Entities and based upon the written advice of the independent
accountants of IDX, neither it nor any IDX Subsidiaries have taken any action or
failed to take any action which action or failure which (without giving effect
to any actions or failures to act by AMP or any of its Subsidiaries) would
prevent the treatment of the Merger as a pooling of interests for accounting
purposes or as a reorganization under the provisions of Section 368(a) of the
Code.

     6.31  DVD Transaction and Prior Transactions.   AMP has been provided with
           --------------------------------------
all material documentation evidencing the closing of the DVD Transaction and the
terms thereof.  Except as otherwise indicated on Schedule 6.31, none of the
                                                 -------------
Company Entities party to such DVD Transaction documents or the Prior
Transactions is in breach of the documents evidencing the DVD Transaction or
Prior Transactions, and to the knowledge of the Company Entities none of the
other parties to such documents is in breach thereof.  To the knowledge of the
Company Entities, no representation made by the sellers in the documentation
relating to the DVD Transaction or the Prior Transactions is untrue and no
indemnification claims have been made (and no facts are known to the Company
Entities which would give rise to any indemnification claims) with respect to
the DVD Transaction or the Prior Transactions.

     6.32  Takeover Statutes.  The Board of Directors of IDX has approved the
           -----------------
terms of this Agreement, and such approval constitutes sufficient approval of
this Agreement by the Board of Directors of IDX to render any restrictions on
business combinations contained in the TBCA inapplicable to the Merger.

     6.33  Accredited Investor Status.   To the knowledge of IDX based on
           --------------------------
written representations previously received from the holders of common stock of
IDX and the IDX Warrants (or other information in the possession of IDX relevant
to a determination of Accredited Investor status) in connection with prior
issuances of IDX Common Stock and IDX Warrants, no more than 35 of the
Shareholders (excluding holders of Assumed Options who do not own any IDX Common
Stock or IDX Warrants) were not Accredited Investors as of the time of such
transactions, and IDX has no reason to believe that, during the period from the
date hereof through the Closing Date, more than 35 of the Shareholders
(excluding holders of Assumed Options who do not own any IDX Common Stock or IDX
Warrants) will not be Accredited Investors.  To the knowledge of IDX based on
written representations previously received from the shareholders of Pathsource
in connection with the June Merger, at the time of the June Merger all
Shareholders who received shares of IDX Common Stock pursuant to such
transaction were "Accredited Investors", and the Company has no knowledge that
the status of Accredited Investor with respect to any such Shareholders has
changed since such date.

     6.34  Brokerage.  No Company Entity and no Shareholder has employed any
           ---------
broker, finder, advisor, consultant or other intermediary in connection with
this Agreement or the transactions contemplated by this Agreement who is or
might be entitled to any fee, commission or other compensation from a Company
Entity, or from AMP or its Affiliates, upon or as a result of the execution of
this Agreement or the consummation of the transactions contemplated hereby,
except for IDX's agreement with SunTrust Equitable Securities (a complete and
correct copy of which agreement has been delivered to AMP prior to the signing
of this Agreement, and the payment obligations under such agreement are set
forth on Schedule 6.34 hereto), and all of the obligations under such agreement
         -------------
are obligations of only IDX or SunTrust Equitable Securities (and none of the
obligations under such agreement are (or purport to be) obligations of AMP or
any Affiliate of AMP).

     6.35  Distribution of Proxy Statement.   IDX will distribute the Proxy
           -------------------------------
Statement to all of its Shareholders as soon as reasonably practicable after the
date of this Agreement, which will be at least 10 days prior to the date of the
IDX Shareholders Meeting.  Subject to Section 7.11, no information included

                                      34
<PAGE>

in the Proxy Statement provided by IDX will contain any untrue statement of
material fact or omit to state any material fact required to be stated therein
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading and will otherwise be in proper form for
compliance with TBCA. Subject to Section 7.11, the Proxy Statement shall include
the information and documents required pursuant to Rule 502(b)(2)(iv) under the
Securities Act, and shall otherwise comply with the requirements of Rule
502(b)(2) under such Act, so as to satisfy the informational requirements of
Rule 506 under the Securities Act. The process for soliciting approval of the
Merger shall be implemented and conducted so as to comply with Rule 502(c) under
the Securities Act.

     6.36  Statements True and Correct.   No representation or warranty made
           ---------------------------
herein by the Company Entities, nor in any statement, certificate or instrument
to be furnished to AMP by the Company Entities within or pursuant to any Merger
Document, contains or will contain any untrue statement of material fact or
omits or will omit to state a material fact necessary to make the statements
contained herein and therein, in light of the circumstances under which they are
made, not misleading.  All documents that IDX is responsible for filing with any
regulatory authority in connection with the Merger will comply in all material
respects with applicable legal requirements.

                                   ARTICLE 7

             REPRESENTATIONS AND WARRANTIES OF AMP AND MERGER CORP
             -----------------------------------------------------

     AMP and Merger Corp hereby represent and warrant to IDX and its
Shareholders as follows:

     7.1  Organization, Authority and Capacity.   Each of AMP and Merger Corp.
          ------------------------------------
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and the State of Tennessee, respectively.  Each of
AMP and Merger Corp. has the full power and authority necessary to (i) execute,
deliver and perform its obligations under the Merger Documents to be executed
and delivered by it, and (ii) carry on its business as it has been and is now
being conducted and to own and lease the properties and assets which it now owns
or leases.  Each of AMP and Merger Corp. is duly qualified to do business and is
in good standing in each jurisdiction in which a failure to be so qualified or
in good standing would have a material adverse effect on (i) their ability to
perform their obligations under the Merger Documents to be executed and
delivered by it or, (ii) the business, operations, properties, assets, results
of operations, or condition (financial or otherwise) of AMP and its Subsidiaries
taken as a whole (an "AMP Material Adverse Effect"); provided, however, that,
                      ---------------------------    -----------------
"AMP Material Adverse Effect" shall not be deemed to include the impact of (a)
actions or omissions of AMP (or its Subsidiaries) (other than actions or
omissions required pursuant to the terms of this Agreement) taken in strict
compliance with the prior informed written consent of IDX (in IDX's sole
discretion) in furtherance of the transactions contemplated hereunder, (b)
changes in law of general applicability or interpretations thereof by courts or
governmental authorities following the date of this Agreement, (c) changes in
generally accepted accounting principles following the date of this Agreement
which have an adverse effect on AMP and which are required by GAAP to be applied
by AMP), and (d) the expenses incurred by AMP in consummating the transactions
contemplated by this Agreement.

     7.2  Authorization and Validity  .  The execution, delivery and performance
          --------------------------
of the Merger Documents to be executed and delivered by AMP and Merger Corp.
have been duly authorized by all necessary corporate action by AMP and Merger
Corp.  The Merger Documents to be executed and delivered by AMP and Merger Corp.
have been or will be, as the case may be, duly executed and delivered by AMP and
Merger Corp. and constitute or will constitute the legal, valid and binding
obligations of AMP and Merger Corp., enforceable in accordance with their
respective terms, except as

                                      35
<PAGE>

may be limited by bankruptcy, insolvency, or other laws affecting creditors'
rights generally, or as may be modified by a court of equity.

     7.3  Absence of Conflicting Agreements or Required Consents.  Except as
          ------------------------------------------------------
set forth on Schedule 7.3, the execution, delivery and performance by AMP and
             ------------
Merger Corp. of the Merger Documents to be executed and delivered by it: (i)
other than filings under the HSR Act pursuant to Section 8.12 of this Agreement,
do not require the consent of or notice to any governmental or regulatory
authority or any other third party; (ii) will not conflict with any provision of
AMP's or Merger Corp.'s articles or certificate of incorporation or bylaws;
(iii) will not conflict with or result in a violation of any law, ordinance,
regulation, ruling, judgment, order or injunction of any court or governmental
instrumentality to which AMP or Merger Corp. is a party or by which AMP or
Merger Corp. or any of their respective properties are bound; (iv) will not
conflict with, constitute grounds for termination of, result in a breach of,
constitute a default under, require any notice under, or accelerate or permit
the acceleration of any performance required by the terms of (a) any material
agreement of AMP listed in the Exhibits to AMP's annual report on Form 10-K for
its 1999 fiscal year or subsequent Forms 10-Q and 8-K filed with the SEC prior
to the date of this Agreement, or (b) any other material agreement of AMP or
Merger Corp other than any such breaches or defaults thereof that will not,
individually or in the aggregate, have an AMP Material Adverse Effect; and (v)
will not create any lien, encumbrance or restriction upon any of the assets or
properties of AMP or Merger Corp. (other than Liens granted to lenders with
respect to the assets of the Surviving Corporation pursuant to the Credit
Agreement dated as of December 16, 1999, as amended, among AMP, certain of its
Subsidiaries, Fleet National Bank (f/k/a BankBoston, N.A.), and certain other
lenders).

     7.4  Governing Documents.   True and correct copies of the organizational
          -------------------
documents and all amendments thereto of AMP and copies of the bylaws of AMP have
been provided or made available to the Company.  IDX has previously been
provided with access to AMP's minutes, and such minutes accurately reflect all
proceedings of the shareholders and board of directors of AMP (and all
committees thereof).

     7.5  Outstanding and Authorized Capitalization.   The authorized capital
          -----------------------------------------
stock of Merger Corp. consists of 1,000 shares of common stock, of which 100
shares are issued and outstanding and held of record by AMP.  The authorized
capital stock of AMP consists of 30,000,000 shares of AMP Common Stock and
5,000,000 shares of preferred stock.  As of November 2, 2000, AMP had 21,919,907
shares of AMP Common Stock and no shares of preferred stock issued and
outstanding.  All issued and outstanding shares of AMP Common Stock have been
duly and validly issued, and are fully paid and non-assessable.  Except as set
forth in Schedule 7.5 or disclosed in the SEC Reports, and except for
         ------------
outstanding options to purchase shares of AMP Common Stock under AMP's Amended
and Restated 1996 Stock Option Plan (under which plan there were options
outstanding to purchase an aggregate of 1,837,851 shares of AMP Common Stock as
of September 30, 2000) and AMP's obligations under or contemplated by this
Agreement, there are no outstanding warrants, options, rights, calls or other
commitments of any nature relating to shares of capital stock of AMP, and no
outstanding securities convertible into or exchangeable for shares of capital
stock of AMP, and, AMP is not obligated to issue or repurchase any of its shares
of capital stock for any reason and no person or entity has any right or
privilege (whether preemptive or contractual) for the purchase, subscription or
issuance from AMP of any unissued shares of capital stock of AMP.  No shares of
AMP Common Stock are held in AMP's treasury.  All AMP Common Stock to be issued
in connection with the Merger will be duly and validly issued, fully paid and
nonassessable.  AMP has adopted a Preferred Share Purchase Rights Plan (a
"poison pill"), and the shares of AMP Common Stock issued under this Agreement
will include any applicable rights under such plan.

                                      36
<PAGE>

     7.6  Reports and Financial Statements.   AMP has previously made available
          --------------------------------
to IDX (including through the SEC's EDGAR system) true and complete copies of:
(a) AMP's Annual Report on Form 10-K filed with the SEC for the year ended
December 31, 1999; (b) AMP's Quarterly Reports on Form 10-Q filed with the SEC
for the quarters ended March 31, 2000 and June 30, 2000; (c) the definitive
proxy statement filed by AMP with the SEC on or about April 3, 2000; (d) the
final prospectus filed by AMP with the SEC with respect to its initial public
offering; (e) all Current Reports on Form 8-K filed by AMP with the SEC since
December 31, 1999 through the date of this Agreement (consisting of one 8-K
filed on August 2, 2000), and (f) AMP's Form 11-K filed on June 28, 2000; all of
which filings with the SEC were timely filed. As of their respective dates (or
if amended or superseded by a filing prior to the date of this Agreement, then
on the date of such filing), such reports, proxy statements and prospectuses
(individually a "SEC Report" and collectively, the "SEC Reports") (i) complied
in all material respects with the applicable requirements of the Securities Act,
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
rules and regulations promulgated thereunder and (ii) did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The audited
consolidated financial statements and unaudited consolidated interim financial
statements included in the SEC Reports (including any related notes and
schedules) complied, as of their respective dates of filing with the SEC, in all
material respects with all  applicable accounting requirements and the published
rules and regulations of  the SEC with respect thereto, were prepared in
accordance with GAAP  consistently applied during the periods involved (except
as otherwise disclosed in the notes thereto, and except that unaudited
statements do not contain footnotes in substance or form required by GAAP, as is
permitted by  Form 10-Q of the Exchange Act) and fairly presented the financial
position of AMP and its consolidated Subsidiaries as of the dates thereof and
the results of operations and cash flows for the periods or as of the dates then
ended (subject, where appropriate, to normal year-end adjustments), and are in
accordance with the books and records of AMP, which books and records are
correct and complete in all material respects. Since the date of the
effectiveness of the final prospectus for AMP's initial public offering, AMP has
timely filed all reports and other filings required to be filed by it with the
SEC under the rules and regulations of the SEC.

     7.7  Absence of Changes.   Except as set forth on Schedule 7.7 or
          ------------------                            ------------
disclosed in the SEC Reports, and except as contemplated by this Agreement,
since June 30, 2000, AMP has conducted its business in the ordinary course in
all material respects and there has not been an AMP Material Adverse Effect.

     7.8  No Undisclosed Liabilities.    Except as set forth on Schedule 7.8,
          --------------------------                            ------------
neither AMP nor any of its Subsidiaries has any Liabilities of the type required
to be reflected on a balance sheet (or notes thereto) prepared in accordance
with GAAP, except (a) Liabilities reflected in any of the SEC Reports, (b)
Liabilities incurred in the ordinary course of business since June 30, 2000, or
(c) Liabilities that would not, individually or in the aggregate, have an AMP
Material Adverse Effect.

     7.9  No Violation of Law.  Except as set forth on Schedule 7.9, the
          -------------------                            ------------
business of AMP and its Subsidiaries have not been and are not currently in
violation of any local, state or federal law, ordinance, regulation, order,
injunction or decree, or any other requirement of any governmental body except
(a) as described in any of the SEC Reports and (b) for violations that would
not, individually or in the aggregate, have an AMP Material Adverse Effect.

     7.10  Pooling of Interests; Section 368 Reorganization.   To the
           ------------------------------------------------
knowledge of AMP and based upon the written advice of its independent
accountants, neither it nor any of its Subsidiaries has taken any action or
failed to take any action (including the terms of the Merger) which action or
failure which (without giving effect to any actions or failures to act by any
Company Entity) would prevent the

                                      37
<PAGE>

treatment of the Merger as a pooling of interests for accounting purpose or as a
reorganization under the provisions of Section 368(a) of the Code.

     7.11  Disclosure.   No information about AMP that is provided by AMP to
           ----------
IDX for inclusion in the Proxy Statement will contain any untrue statement of
material fact or omit to state any material fact required to be stated therein
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading (subject to the applicable qualifications
set forth in Section 7.6).  The information about AMP that is provided by AMP to
IDX for inclusion in the Proxy Statement shall include the information and
documents required pursuant to Rule 502(b)(2)(vi) under the Securities Act, and
shall otherwise comply with the requirements of Rule 502(b)(2) under such Act,
so as to satisfy the informational requirements of Rule 506 under the Securities
Act.  All documents that AMP is responsible for filing with any regulatory
authority (including the SEC) in connection with the Merger will comply in all
material respects with applicable legal requirements.

     7.12  Brokerage.   AMP has not employed any broker, finder, advisor,
           ---------
consultant or other intermediary in connection with this Agreement or the
transactions contemplated by this Agreement who is or might be entitled to any
fee, commission or other compensation from IDX or any Shareholder, upon or as a
result of the execution of this Agreement or the consummation of the
transactions contemplated hereby (but AMP has engaged its financial advisor with
fees to be paid by AMP).

     7.13  Litigation, etc.  Except as listed on Schedule 7.13 hereto or
           ---------------                         -------------
disclosed in the SEC Reports, and except for matters involving Claims for less
than $500,000 that are adequately covered by insurance (taking into account any
applicable limits on coverage) and which would not, if determined adversely,
have an AMP Material Adverse Effect, (i) there are no Claims pending against any
AMP Entity, and, to the knowledge of AMP, no such matter is threatened, (ii) to
the knowledge of AMP, there are no governmental or administrative investigations
or inquiries pending that involve any AMP Entity, other than routine audits or
inquiries (a) under the HCFA audit programs or (b) by state or local agencies,
and (iii) there are no judgments against or consent decrees binding on any AMP
Entity which may have an AMP Material Adverse Effect; and (iv) all Claims known
to AMP against any AMP Entity have been reported to the appropriate insurance
carrier and, to the knowledge of AMP, no AMP Entity has received a notice of
denial of coverage or a reservation of rights.

     7.14  Inspections and Investigations.
           ------------------------------

          Except as set forth and described in Schedule 7.14 or as disclosed in
                                               -------------
the SEC Reports, (i) no AMP Entity's right to receive reimbursements pursuant to
any Government Program or Private Program has ever been terminated or otherwise
adversely affected as a result of any investigation or action whether by any
federal or state governmental regulatory authority or other third party, (ii) no
AMP Entity has during the past three (3) years been the subject of any
inspection, investigation, survey, audit, monitoring or other form of review by
any governmental regulatory entity, trade association, professional review
organization, accrediting organization or certifying agency for the purpose of
any alleged improper activity on the part of such entity, other than routine
audits or inquiries (a) under the HCFA audit programs or (b) by state or local
agencies, (iii) no AMP Entity has received any notice of deficiency in
connection with its operations that remains open, and (iv) no AMP Entity has
received any notice of any claim, requirement or demand of any licensing or
certifying agency or other third party supervising or having authority over any
AMP Entity or their operations to rework or redesign any part thereof or to
provide additional furniture, fixtures, equipment, appliances or inventory so as
to conform to or comply with any existing law, code, rule, regulation or
standard; other than any of such items required to be disclosed in Schedule 7.14
under the foregoing clauses (i) through (iv) which would not individually or in
the aggregate have an AMP Material Adverse Effect.

                                      38
<PAGE>

     7.15  Health Care Laws and Regulations.  The representations and
           --------------------------------
warranties in this Section 7.15 are qualified by the disclosures set forth in
the SEC Reports.

          (a) Except as set forth on Schedule 7.15(a), each AMP Entity has not
                                    -----------------
engaged in any activities which are prohibited under federal Medicare and
Medicaid statutes, 42 U.S.C. Section 1320a-7a and 7b, or the regulations
promulgated pursuant to such statutes or similar or related state or local
statutes or regulations or which would otherwise violate state or local statutes
or regulations, including without limitation prohibitions on fee splitting and
the corporate practice of medicine, or which are prohibited by rules of
professional conduct or which otherwise could constitute fraud, including but
not limited to the following:  (i) making or causing to be made a false
statement or representation of a material fact in any application for any
benefit or payment; (ii) making or causing to be made any false statement or
representation of a material fact for use in determining rights to any benefit
or payment; and (iii) soliciting, paying or receiving any remuneration
(including any kickback, bribe, or rebate), directly or indirectly, overtly or
covertly, in cash or in kind or offering to pay such remuneration (a) in return
for referring an individual to a Person for the furnishing or arranging for the
furnishing of any item or service for which payment may be made in whole or in
part by Medicare or Medicaid, or (b) in return for purchasing, leasing, or
ordering or arranging for or recommending purchasing, leasing, or ordering any
good, facility, service, or item for which payment may be made in whole or in
part by Medicare and Medicaid; other than any of such items required to be
disclosed in Schedule 7.15(a) under the foregoing clauses (i) through (iii)
which would not individually or in the aggregate have an AMP Material Adverse
Effect.

          (b) To the knowledge of AMP, all agreements of the AMP Entities with
third-party payors were entered into by the AMP Entities in the ordinary course
of business.  The AMP Entities are in material compliance with each of its
third-party payor agreements, and each AMP Entity has properly charged and
billed in accordance with the terms of its third-party payor agreements,
including, where applicable, billing and collection of all deductibles and co-
payments, except to the extent that any failure to be in compliance or properly
charge and bill would not, individually or in the aggregate, have an AMP
Material Adverse Effect.

          (c) Each AMP Entity has timely and accurately filed all requisite
claims and other reports required to be filed in connection with all state and
federal Medicare and Medicaid programs in which an AMP Entity participates due
on or before the Closing Date except to the extent that the failure to file such
claims and reports would not result in an AMP Material Adverse Effect.  Except
as set forth on Schedule 7.15(c) or as disclosed in the SEC Reports, there are
                ----------------
no Claims pending or, to the knowledge of any AMP Entity, threatened or
scheduled, before any authority, including without limitation, any intermediary,
carrier, the Administrator of the Health Care Financing Administration, or any
other state or federal agency with respect to any Medicare and Medicaid claim
filed by any AMP Entity on or before the Closing Date, or program compliance
matters, which would have an AMP Material Adverse Effect.  AMP has delivered to
IDX accurate and complete copies of any Claims, actions or appeals listed on
Schedule 7.15(c).  Except for routinely scheduled reviews, and except as set
- ----------------
forth on Schedule 7.15(c) or as disclosed in the SEC Reports, no valid review or
         ----------------
program integrity review related to any AMP Entity has been conducted by any
authority in connection with the Medicare or Medicaid programs and no such
review is scheduled, pending or threatened against or affecting any AMP Entity,
its business, assets, or the consummation of the transactions contemplated
hereby.

          (d) Each facility currently operated by any AMP Entity charges rates
and accordingly bills for services which are legal and proper.

                                      39
<PAGE>

          (e) Except as set forth on Schedule 7.15(e), no Person having a
                                     ----------------
"financial relationship" with any AMP Entity as that term is defined in 42
U.S.C. Section 1395nn, directly or indirectly refers patients or services to any
AMP Entity other than (i) referrals which comply with (or are exempt from) the
requirements of 42 U.S.C. Section 1395nn and the regulations promulgated
pursuant thereto, or (ii) referrals that would not, individually or in the
aggregate, have an AMP Material Adverse Effect.

          (f) Except as set forth on Schedule 7.15(f) or as disclosed in the SEC
                                     ----------------
Reports, the structure and operations of each AMP Practice are in compliance
with applicable state and local statutes and regulations, including without
limitation state laws relating to the corporate practice of medicine, fee-
splitting, and fraud and abuse, other than any failures in such compliance which
would not individually or in the aggregate have an AMP Material Adverse Effect.

     7.16  Statements True and Correct.   No representation or warranty made
           ---------------------------
herein by AMP, when taken together with the statements made in the SEC Reports,
contains any untrue statement of material fact or omits to state a material fact
necessary to make the statements contained herein and therein, in light of the
circumstances under which they are made, not misleading.

                                   ARTICLE 8
                             ADDITIONAL AGREEMENTS
                             ---------------------

     8.1  Access to Information; Prohibition on Insider Trading.  At all times
          -----------------------------------------------------
prior to the Closing, IDX will afford the officers and authorized
representatives of AMP access to each Company Entity's properties, books and
records that may relate to or concern the Merger and will furnish such parties
with such additional financial, operating and other information as to the
business and properties of the Company Entities as such parties may from time to
time reasonably request.  Such parties shall also be allowed access, upon
reasonable notice, to consult with the officers, employees, accountants, counsel
and agents of the Company Entities in connection with such investigation of the
properties and business of the Company Entities.  In addition, at all times
prior to the Closing, AMP will afford the officers and authorized
representatives of IDX access to all of AMP's properties, books and records that
may relate to or concern the Merger and will furnish such parties with such
additional financial, operating and other information as to the business and
properties of AMP as such parties may from time to time reasonably request.
Such parties shall also be allowed access, upon reasonable notice, to consult
with the officers, employees, accountants, counsel and agents of AMP in
connection with such investigation of the properties and business of AMP.  In
each case, such access or investigation shall be subject to the terms of that
certain letter agreement signed by AMP and IDX dated August 27, 2000 addressed
to IDX from AMP and providing for, among other things, the mutual obligations of
the parties with respect to confidential treatment of information provided by
AMP and IDX (the "Confidentiality Agreement").  In addition, the Company
                  -------------------------
Entities and AMP shall each take responsible steps to assure that any person who
receives nonpublic information concerning the Merger or the other party will
treat the information confidentially as provided in this Section and not
directly or indirectly buy or sell, or advise or encourage other persons to buy
or sell, AMP's stock until such information is properly disclosed to the public.

     8.2  No Solicitation; Acquisition Proposals.
          --------------------------------------

     (a) Unless and until this Agreement is terminated pursuant to Article 11
hereof, neither IDX nor any Affiliate thereof nor any Representatives thereof
retained by IDX shall directly or indirectly (i) solicit, initiate or encourage
the making of any Acquisition Proposal by any Person, (ii) participate in any

                                      40
<PAGE>

discussions or negotiations regarding, or furnish to any other person,
corporation or other entity, any information with respect to, or otherwise
cooperate in any way with, or assist or participate in, facilitate or encourage,
any effort or attempt by any other person, in connection with, an Acquisition
Proposal; or (iii) enter into any contract, agreement or understanding, whether
oral or written, that would prevent the consummation of the Merger.  In the
event any Company Entity shall directly or indirectly receive or become aware of
a proposal relating to any acquisition or business combination involving any of
the Company Entities, the Company Entities shall immediately notify AMP in
writing of the terms of such proposal.  IDX agrees that it will, and will cause
the other Company Entities and its and their respective officers, directors and
representatives to, immediately cease and cause to be terminated any activities,
discussions or negotiations existing as of the date of this Agreement with any
parties conducted heretofore with respect to any acquisition, business
combination, equity interest or similar transaction with respect to the Company
Entities.  Notwithstanding anything herein to the contrary, IDX and its Board of
Directors shall be permitted to engage in any discussions or negotiations with,
or provide any information to, any Person in response to an unsolicited
Acquisition Proposal (which may include an Acquisition Proposal resulting from
solicitation efforts prior to the date hereof, but not any Acquisition Proposal
solicited subsequent to the date hereof or that results from a breach of this
Section 8.2) by any such Person, but only if and only to the extent that (A)
                                 -----------
IDX's Board of Directors concludes in good faith and consistent with its
fiduciary duties, after consulting with its independent financial advisors, that
such Person is reasonably capable of consummating such Acquisition Proposal and
that such Acquisition Proposal is a Superior Proposal (such conclusion by the
Board is referred to below as a "Superior Determination"), (B) prior to
providing any information or data to any Person in connection with such Superior
Proposal by any such Person, IDX receives from such Person an executed
confidentiality agreement containing customary confidentiality provisions (with
terms similar to the terms of the Confidentiality Agreement entered into by IDX
and AMP), and (C) prior to entering into such negotiations with any Person, IDX
notifies AMP of the receipt of the Superior Proposal and shall in such notice
indicate in reasonable detail the identity of the offeror and the material terms
and conditions of any proposal.

     (b) Except as provided in the following sentence, neither IDX nor its Board
of Directors shall (i) withdraw or modify in a manner adverse to AMP or Merger
Corp. the approval by such Board of Directors of this Agreement, the Merger or
the favorable recommendation of the Board with respect thereto, (ii) approve or
recommend any Acquisition Proposal, or (iii) cause or permit the Company or any
Company Entity to enter into any agreement with respect to any Acquisition
Proposal.  Notwithstanding the foregoing or anything else to the contrary in
this Agreement or any other agreement, in the event that IDX has received a
Superior Proposal not solicited in violation of this Agreement that is the
subject of a Superior Determination, then IDX's Board of Directors may, if the
Board of Directors of the Company determines in good faith, after consultation
with outside counsel, that it is advisable to do so consistent with its
fiduciary duties to the Company's stockholders under applicable law, (x)
withdraw or modify its approval or recommendation of this Agreement and the
Merger and disclose the same to its stockholders or otherwise make disclosure to
them, or (y) approve or recommend such Superior Proposal; provided, however,
that in no event may the Board of Directors take either such action earlier than
the conclusion of the third full business day following notice to AMP of such
intention of the Board of Directors to do so.

     8.3  Affirmative Covenants of the Company Entities.    From the date hereof
          ---------------------------------------------
until the earlier of the Effective Time or the termination of this Agreement as
permitted by the terms hereof, IDX covenants and agrees that, unless the prior
written consent of AMP shall have been obtained, and except as otherwise
expressly provided herein, IDX and each other Company Entity shall (and IDX
hereby agrees to cause the other Company Entities to) comply with the
requirements of this Section 8.3):

                                      41
<PAGE>

               (i)    operate its business only in the usual, regular, and
          ordinary course of business, consistent with past practices;

               (ii)   use reasonable commercial efforts to preserve intact its
          business organization, licenses, permits, government programs, private
          programs and customers;

               (iii)  use reasonable commercial efforts to retain the services
          of its employees, agents and consultants on terms and conditions not
          less favorable than those existing prior to the date hereof and to
          ensure that there are no material or adverse changes to employee
          relations;

               (iv)   keep and maintain its assets in their present condition,
          repair and working order, except for normal depreciation and wear and
          tear, and maintain its insurance, rights and licenses;

               (v)    pay all accounts payable of the Company Entity in
          accordance with past practice and collect all accounts receivable in
          accordance with past practice;

               (vi)   consult with AMP prior to undertaking any new business
          opportunity outside the ordinary course of business and not undertake
          such new business opportunity without the prior written consent of
          AMP;

               (vii)  confer on a regular and frequent basis with one or more
          designated representatives of AMP to report material operational
          matters and to report the general status of ongoing business
          operations;

               (viii) make available to AMP true and correct copies of all
          internal management and control reports (including aging of accounts
          receivable, listings of accounts payable, and inventory control
          reports) and financial statements related to the Company Entities and
          furnished to management of the Company Entities;

               (ix)   cause all tax returns that have not been filed prior to
          the date hereof to be prepared and filed on or before the date such
          tax return is required to be filed (taking into account any extensions
          of the filing deadlines granted); provided, however, that any such tax
          return shall not be filed without a reasonable opportunity for prior
          review and comment by AMP;

               (x)    as soon as reasonably practicable after they become
          available, but in no event more than thirty (30) days following the
          end of each calendar month, deliver to AMP true and complete copies of
          its monthly financial statements for each calendar month ending
          subsequent to the date hereof on the format historically utilized by
          the Company Entity;

               (xi)   perform in all material respects all obligations under
          agreements relating to or affecting its assets, properties or rights;

               (xii)  keep in full force and effect present insurance policies
          or other comparable insurance coverage; and

                                       42
<PAGE>

               (xiii) notify AMP of (i) any event or circumstance which has
          caused or constituted, or is reasonably likely to have, a Company
          Material Adverse Effect or would cause or constitute a breach of any
          of the representations, warranties or covenants contained herein by
          the Company Entities; or (ii) any material change in the normal course
          of business or in the operation of the assets, and of any governmental
          complaints, investigations or hearings (or communications indicating
          that the same may be contemplated), adjudicatory proceedings, budget
          meetings or submissions involving the Company Entities or any material
          property of the Company Entities.  Each Company Entity agrees to keep
          AMP fully informed of such events and to permit AMP's representatives
          prompt access to all materials prepared in connection therewith.

     8.4  Negative Covenants of the Company Entities.   From the date hereof
          ------------------------------------------
until the earlier of the Effective Time or the termination of this Agreement as
permitted by the terms hereof, IDX covenants and agrees that IDX and each other
Company Entity shall not (and IDX hereby agrees to cause the other Company
Entities not to) do any of the following without the prior written consent of
AMP:

               (i)    take any action which would (i) adversely affect the
          ability of any party to the Merger Documents to obtain any consents
          required for the transactions contemplated thereby, or (ii) adversely
          affect the ability of any party hereto to perform its covenants and
          agreements under the Merger Documents;

               (ii)   amend any of its organizational or governing documents;

               (iii)  incur any additional debt obligation or other obligation
          for borrowed money except in the ordinary course of the business of
          the Company Entities consistent with past practices, or impose, or
          suffer the imposition, on any asset of the Company Entities of any
          lien or permit any such lien to exist;

               (iv)   repurchase, redeem, or otherwise acquire or exchange,
          directly or indirectly, any IDX Common Stock, or any securities
          convertible into IDX Common Stock, or declare or pay any dividend or
          make any other distribution in respect of IDX Common Stock;

               (v)    other than pursuant to the Merger Documents, issue, sell,
          pledge, encumber, authorize the issuance of, enter into any contract
          to issue, sell, pledge, encumber, or authorize the issuance of, or
          otherwise permit to become outstanding, any additional IDX Common
          Stock or any rights with respect to any IDX Common Stock;

               (vi)   purchase or acquire any assets or properties, whether real
          or personal, tangible or intangible, or sell or dispose of any assets
          or properties, whether real or personal, tangible or intangible,
          except in the ordinary course of business and consistent with past
          practices;

               (vii)  adjust, split, combine or reclassify any IDX Common Stock
          or issue or authorize the issuance of any other securities in respect
          of or in substitution for IDX Common Stock, or sell, lease, mortgage
          or otherwise dispose of or otherwise encumber any asset having a book
          value in excess of $50,000 other than in the ordinary course of
          business for reasonable and adequate consideration;

                                      43
<PAGE>

               (viii)  purchase any securities or make any material investment,
          either by purchase of stock or other securities, contributions to
          capital, asset transfers, or purchase of any assets, in any entity, or
          otherwise acquire direct or indirect control over any other entity;

               (ix)    grant any increase in compensation or benefits to the
          employees or officers of the Company Entities or Company Practices,
          except in accordance with past practice as to employees that are not
          officers; pay any severance or termination pay or any bonus other than
          pursuant to written policies or written contracts in effect as of the
          date hereof and disclosed on the Schedules hereto; enter into or amend
                                           ---------
          any severance agreements with officers of the Company Entities; or
          grant any material increase in fees or other increases in compensation
          or other benefits to directors of the Company;

               (x)     other than as contemplated by this Agreement or as set
          forth on Schedule 8.4, enter into or amend any employment contract
                   ------------
          between any Company Entities and any person or entity (unless such
          amendment is required by law) that the Company does not have the
          unconditional right to terminate without liability (other than
          liability for services already rendered), at any time on or after the
          Effective Time;

               (xi)    adopt any new employee benefit plan or make any material
          change in or to any existing employee benefit plans other than any
          such change that is required by law or that, in the opinion of
          counsel, is necessary or advisable to maintain the tax qualified
          status of any such plan;

               (xii)   make any significant change in any tax or accounting
          methods or systems of internal accounting controls, except as may be
          appropriate to conform to changes in tax laws or regulatory accounting
          requirements or GAAP;

               (xiii)  commence any litigation other than in accordance with
          past practice, settle any litigation involving any liability of the
          Company Entities for material money damages or restrictions upon the
          operations of the Company Entities;

               (xiv)   except as set forth on Schedule 8.4, modify, amend or
                                              ------------
          terminate any material contract or waive, release, compromise or
          assign any material rights or claims;

               (xv)    except in the ordinary course of business and, even if in
          the ordinary course of business, then not in an amount to exceed
          $100,000 in the aggregate, make or commit to make any capital
          expenditure, or enter into any lease of capital equipment as lessee or
          lessor;

               (xvi)   take any action, or omit to take any action, which would
          cause any of the representations and warranties contained in Article 6
          to be untrue or incorrect;

               (xvii)  make any loan to any person or increase the aggregate
          amount of any loan currently outstanding to any person;

               (xviii) take any actions that would, or would be reasonably
          likely to, prevent AMP from accounting for the Merger in accordance
          with the pooling of interests method of accounting under the
          requirements of Opinion No. 16 "Business Combinations" of the
          Accounting Principles Board of the American Institute of Certified
          Public Accountants,

                                      44
<PAGE>

          as amended by applicable pronouncements by or interpretations issued
          by the Financial Accounting Standards Board or the SEC;

               (xix)  take any action that would give rise to a claim under the
          WARN Act or any similar state law or regulation because of a "plant
          closing" or "mass layoff" (each as defined in the WARN Act);

               (xx)   make any election under any of its stock option plans to
          pay cash in exchange for terminating awards under such plans; or

               (xxi)  agree, in writing or otherwise, to take any of the
          foregoing actions or take any action that would result in any of the
          conditions to the Merger not being satisfied, or, except as otherwise
          allowed hereunder, that could reasonably be expected to prevent,
          impede, interfere with or significantly delay the transactions
          contemplated hereby.

     8.5  Affirmative Covenants of AMP.   From the date hereof until the
          ----------------------------
earlier of the Effective Time or the termination of this Agreement as permitted
by the terms hereof, AMP covenants and agrees that, unless the prior written
consent of IDX shall have been obtained, and except as otherwise expressly
provided herein, AMP and each of its Subsidiaries shall:

               (i)    use reasonable commercial efforts to preserve intact its
          business organization, licenses, permits, government programs, private
          programs and customers;

               (ii)   notify IDX of (i) any event or circumstance which has
          caused or constituted, or is reasonably likely to have, an AMP
          Material Adverse Effect or would cause or constitute a breach of any
          of AMP's or Merger Corp's representations, warranties or covenants
          contained herein; or (ii) any material change in the normal course of
          business or in the operation of AMP's assets, and of any material
          governmental complaints, investigations or hearings (or communications
          indicating that the same may be contemplated) or adjudicatory
          proceedings;

               (iii)  promptly prepare and file with Nasdaq any required listing
          applications covering the shares of AMP Common Stock issuable in the
          Merger or upon exercise of the IDX Options and IDX Warrants; and

               (iv)   as soon as reasonably practicable after they become
          available, deliver to IDX true and complete copies of AMP's monthly
          financial statements for each calendar month ending subsequent to the
          date hereof on the format historically utilized by AMP.

     8.6  Negative Covenants of AMP.  From the date hereof until the earlier
          -------------------------
of the Effective Time or the termination of this Agreement as permitted by the
terms hereof, AMP covenants and agrees that neither it nor any of its
Subsidiaries will do any of the following without the prior written consent of
IDX:

               (i)    take any action which would (i) adversely affect the
          ability of any party to the Merger Documents to obtain any consents
          required for the transactions contemplated thereby, (ii) adversely
          affect the ability of any party to the Merger Documents to cause any
          of the conditions set forth in Article 9 to be satisfied, or

                                      45
<PAGE>

          (iii) adversely affect the ability of any party hereto to perform its
          covenants and agreements under the Merger Documents;

               (ii)   take any action, or omit to take any action, which would
          cause any of the representations and warranties contained in Article 7
          to be untrue or incorrect;

               (iii)  take any actions that would, or would be reasonably likely
          to, prevent AMP from accounting for the Merger in accordance with the
          pooling of interests method of accounting under the requirements of
          Opinion No. 16 "Business Combinations" of the Accounting Principles
          Board of the American Institute of Certified Public Accountants, as
          amended by applicable pronouncements by or interpretations issued by
          the Financial Accounting Standards Board or the SEC; or

               (iv)   agree, in writing or otherwise, to take any of the
          foregoing actions or take any action that would result in any of the
          conditions to the Merger not being satisfied, or, except as otherwise
          allowed hereunder, that could reasonably be expected to prevent,
          impede, interfere with or significantly delay the transactions
          contemplated hereby.

     8.7  Confidentiality, Public Announcements.   The parties hereby affirm
          -------------------------------------
and ratify the terms of the Confidentiality Agreement (it being agreed however
that the Confidentiality Agreement may not be amended or modified without the
written agreement of both IDX and AMP).  Neither AMP or Merger Corp, nor any
Company Entity nor any Affiliate, representative, employee, or shareholder of
any of such Persons, shall disclose any of the terms of this Agreement to any
third party (other than to AMP's advisors and senior lending group and the
advisors of IDX within the limits provided in the Confidentiality Agreement)
without AMP's and IDX's prior written consent unless required by any applicable
law or order (but in any event subject to the applicable terms of the
Confidentiality Agreement).  The form, content and timing of any and all press
releases, public announcements or publicity statements prior to Closing with
respect to this Agreement or the transactions contemplated hereby shall be
subject to the prior approval of AMP and IDX which shall not be unreasonably
withheld, subject to exceptions for legally required disclosures as provided in
the previous sentence and the terms of the Confidentiality Agreement.  AMP and
IDX shall confer with each other prior to the issuance of any reports, public
statements or releases pertaining to this Agreement or any transaction
contemplated hereby and shall not issue any such press release or make any such
public statement prior to such consultation, except as may be required by
applicable law or court process or by obligations pursuant to any listing
agreement with Nasdaq or similar self-regulatory agency and subject to the terms
of the Confidentiality Agreement.

     8.8  Accounting and Tax Treatment.    Each of the Parties undertakes and
          ----------------------------
agrees to use its reasonable efforts to cause the Merger to be accounted for
under the pooling of interests method of accounting, and not to take any action
that would cause the Merger not to qualify for treatment as a "reorganization"
with the meaning of Section 368 of the Code.

     8.9  Filings with State Offices.   Upon the terms and subject to the
          --------------------------
conditions of this Agreement, the Company and Merger Corp. shall execute and
file Articles of Merger with the Secretary of State of the State of Tennessee in
connection with the Closing.

     8.10  Agreement as to Efforts to Consummate.  Subject to the terms and
           -------------------------------------
conditions of this Agreement, each party agrees to use, and to cause its
Subsidiaries to use, its reasonable commercial efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, all things necessary,
proper, or advisable under applicable laws to consummate and make effective, as
soon as reasonably

                                      46
<PAGE>

possible after the date of this Agreement, the Merger, including using its
reasonable efforts to lift or rescind any order adversely affecting its ability
to consummate the Merger and to cause to be satisfied the conditions referred to
Articles 9 and 10 that it is required to obtain; provided, that nothing herein
shall preclude either party from exercising its rights under this Agreement.
Each party shall use, and shall cause each of its Subsidiaries to use, its
reasonable commercial efforts to obtain all consents necessary or desirable and
which it is required to obtain for the consummation of the Merger.

     8.11  Reports.   Each party and its Subsidiaries, as applicable, shall
           -------
file all reports required to be filed by it with regulatory authorities between
the date of this Agreement and the Effective Time.  Any financial statements
contained in any such reports shall be prepared in accordance with laws
applicable to such reports.

     8.12  Applications; Antitrust Notification.   If a filing is required by
           ------------------------------------
the HSR Act with respect to the Merger, each of the Parties will use their
reasonable best efforts to file within five business days of the date of this
Agreement with the United States Federal Trade Commission ("FTC") and the United
States Department of Justice ("DOJ") the notification and report form and
documents required for the transactions contemplated hereby and any supplemental
or additional information which may reasonably be requested in connection
therewith pursuant to the HSR Act and will comply in all material respects with
the requirements of HSR Act.  Each party shall furnish to the other party such
necessary information and assistance as the other party may request in
connection with its preparation of necessary filings or submissions to the FTC,
the DOJ or any other governmental, regulatory or administrative agency or
authority.  Additionally, each of the Parties will take all such further action
as reasonably may be necessary to resolve objections, if any, of the FTC, DOJ,
state antitrust authorities or competition authorities of any jurisdiction under
relevant antitrust or competition laws with respect to the transactions
contemplated hereby.

     8.13  Issuance of Shares; Shareholder Approval.
           ----------------------------------------

          (a) The AMP Common Stock to be issued in the Merger will be issued by
AMP relying on an exemption from registration pursuant to Section 4(2) under the
Securities Act and Regulation D thereunder or similar exemptions under the
Securities Act.  The certificates representing the shares of AMP Common Stock
shall bear appropriate legends to identify such shares as "restricted
securities" under the Securities Act to comply with applicable federal and state
securities laws.  IDX acknowledges and agrees that in order for AMP to rely on
such exemptions from registration, AMP will be required to obtain certain
representations made by the Shareholders including, but not limited to,
representations concerning status as an "accredited investor" within the meaning
of Regulation D of the Securities Act and regarding limitations on resales of
the AMP Common Stock.

          (b) So long as required in the reasonable opinion of AMP's counsel,
stock transfer orders will be given to AMP's Transfer Agent in connection with
the certificates to be issued representing the AMP Common Stock issued pursuant
to this Agreement and such certificates will bear legends substantially as
follows (the second legend below will apply only to the certificates for shares
held by the Escrow Agent):

              "THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
     REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY
     NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF, NOR WILL ANY
     ASSIGNEE OR ENDORSEE HEREOF BE RECOGNIZED AS AN OWNER HEREOF BY
     THE ISSUER FOR ANY PURPOSE, UNLESS A REGISTRATION STATEMENT UNDER
     THE SECURITIES ACT OF 1933, AS AMENDED, WITH

                                      47
<PAGE>

     RESPECT TO SUCH SHARES SHALL THEN BE IN EFFECT OR UNLESS THE
     AVAILABILITY OF AN EXEMPTION FROM REGISTRATION WITH RESPECT TO
     ANY PROPOSED TRANSFER OR DISPOSITION OF SUCH SHARES SHALL HAVE
     BEEN ESTABLISHED TO THE SATISFACTION OF THE ISSUER. IN ADDITION,
     THESE SECURITIES HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE
     SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR TRANSFERRED
     EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER THE APPLICABLE
     STATE SECURITIES LAWS OR PURSUANT TO AN EFFECTIVE REGISTRATION OR
     QUALIFICATION UNDER SUCH LAWS."

     "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
     CANCELLATION PURSUANT TO THE TERMS AND CONDITIONS OF AN AGREEMENT
     AND PLAN OF MERGER DATED AS OF NOVEMBER 7, 2000 AND AN ESCROW
     AGREEMENT DATED _______, 2000, WHICH AGREEMENTS MAY BE EXAMINED
     AT THE OFFICES OF THE COMPANY."

     In addition, the certificates delivered to each Shareholder under
Article 4 will include one certificate representing the number of shares of AMP
Common Stock which such Shareholder may be entitled to have registered under
(and subject to the terms of, and such Shareholder's execution and delivery of)
the Registration Rights Agreement (the "Registration Shares").  Such
certificates representing the Registration Shares will bear the first legend
below, and the other certificates delivered under Article 4 will bear the second
legend below:

     "THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE ELIGIBLE FOR
     REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
     PURSUANT TO THE TERMS AND CONDITIONS OF A REGISTRATION RIGHTS
     AGREEMENT DATED AS OF _______, 200__, WHICH AGREEMENT MAY BE
     EXAMINED AT THE OFFICES OF THE COMPANY."

     "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE NOT ELIGIBLE FOR
     REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
     PURSUANT TO THE TERMS AND CONDITIONS OF A REGISTRATION RIGHTS
     AGREEMENT DATED AS OF _______, 200__, WHICH AGREEMENT MAY BE
     EXAMINED AT THE OFFICES OF THE COMPANY."

          (c) IDX shall call a shareholder meeting, to be held as soon as
reasonably practicable after the date hereof, for the purpose of voting upon
approval of this Agreement and the Merger, and such other related matters as it
deems appropriate with the consent of AMP (which consent shall not be
unreasonable withheld).  In connection with such shareholder meeting, (i) IDX
shall prepare a Proxy Statement and mail such Proxy Statement to all of IDX's
stockholders and to other persons to whom such delivery is required under
applicable securities law or agreements, and IDX shall include in the Proxy
Statement appropriate disclosures and information concerning IDX and AMP and the
Merger as are required by Rule 502(b) under the Securities Act, (ii) AMP shall
prepare and provide to IDX for inclusion in the Proxy Statement appropriate
disclosures and information concerning AMP as are required by Rule 502(b) under
the Securities Act, (iii) the Parties shall furnish to each other all
information concerning them that they may reasonably request in connection with
such Proxy Statement, (iv) the Board of Directors of IDX shall recommend to its
stockholders the approval of the matters submitted for approval (subject to
Section 8.2(b)), and (v) the Board of Directors and officers of IDX shall use
commercially reasonable efforts to obtain such stockholders' approval (subject
to Section 8.2(b)).  The Proxy Statement and all materials submitted to
Shareholders to seek their consent or vote

                                      48
<PAGE>

shall be subject to prior review and approval by AMP (which approval shall not
be unreasonably withheld).

     8.14  Affiliate Agreements.   The agreements to be entered into pursuant
           --------------------
to the following provisions of this Section 8.14 are sometimes referred to
herein as the "Affiliate Agreements".
               --------------------

          (a) IDX shall, within five business days of the date of this
Agreement, deliver to AMP a list setting forth the names and addresses of all
Persons who are, or at the time of the IDX Shareholders Meeting, in the
reasonable judgment of IDX, "affiliates" of the Company for purposes of Rule 145
under the Securities Act or under applicable SEC accounting releases with
respect to pooling of interests accounting treatment. IDX shall furnish such
information and documents as AMP may reasonably request for the purpose of
reviewing such list. IDX shall use its reasonable best efforts to cause each
Person who is identified as an "affiliate" in the list furnished pursuant to
this Section 8.14(a) to execute a written agreement on or prior to the Effective
Time, in substantially the form of Exhibit E-1 hereto.
                                   -----------

          (b) AMP shall, within five business days of the date of this
Agreement, deliver to the Company a list setting forth the names and addresses
of all Persons who are, or at the time of the IDX Shareholders Meeting, in AMP's
reasonable judgment, "affiliates" of AMP under applicable SEC accounting
releases with respect to pooling of interests accounting treatment.  AMP shall
furnish such information and documents as the Company may reasonably request for
the purpose of reviewing such list. AMP shall use its reasonable best efforts to
cause each Person who is identified as an "affiliate" in the list furnished
pursuant to this Section 8.14(b) to execute a written agreement at or prior to
the Effective Time, in substantially the form of Exhibit E-2 hereto.
                                                 -----------

     8.15  Registration of Shares.   AMP will use all reasonable best efforts
           ----------------------
to cause a registration statement to be filed and to become effective pursuant
to the terms of the Registration Rights Agreement in the form attached as
Exhibit F (the "Registration Rights Agreement") following execution and delivery
- ---------
of such agreement at Closing.

     8.16  Availability of Rule 144 Information.  AMP agrees, during the two-
           ------------------------------------
year period commencing on the Effective Time, to:

     (i)   use its commercially reasonable efforts to make and keep "current
public information" about AMP available, as those terms are understood and
defined in Rule 144 under the Securities Act;

     (ii)  use its commercially reasonable to file with the SEC in a timely
manner all reports and other documents required of AMP to be filed under the
Securities Act and the Exchange Act; and

     (iii) furnish to any Shareholder holding shares of AMP Common Stock issued
in the Merger, upon request (i) a written statement by the AMP as to AMP's
compliance with the reporting requirements of Rule 144 and of the Securities Act
and the Exchange Act, (ii) a copy of the most recent annual or quarterly report
filed by AMP with the SEC (or instructions as to how to access through the
internet the SEC's publicly available EDGAR database to obtain such reports).

     In addition, between the date of this Agreement and the Effective Time, AMP
shall file on a timely basis all reports required to be filed by it under the
1934 Act, and upon request shall provide copies of such reports to counsel for
IDX.

     8.17  Closing Working Capital; Pre-Closing Balance Sheet.
           --------------------------------------------------

                                      49
<PAGE>

     (a) If IDX's "Closing Working Capital" (as defined below) is less than
$4,174,266 (the "Minimum Working Capital"), then the Escrow Shares shall be
                 -----------------------
subject to cancellation as provided in this Section 8.17 and the Escrow
Agreement.  The number of Escrow Shares to be cancelled shall be equal to the
quotient of (i) the amount by which the Closing Working Capital is less than the
Minimum Working Capital (the "Working Capital Deficiency"), divided by (ii) the
                              --------------------------
Average Trading Price (as defined in Article 13 hereof).  "Closing Working
                                                           ---------------
Capital" means the consolidated Working Capital of IDX as of the Closing Date as
- -------
of the time immediately prior to Closing, determined in accordance with GAAP
and, to the extent not inconsistent therewith, applied in a manner consistent
with past practice of IDX.  "Working Capital" means the sum of all cash and cash
                             ---------------
equivalents, accounts receivable (net of bad debt allowance), inventory, and
prepaid expenses and other current assets, minus all accounts payable, accrued
                                           -----
salary and wages, and all other current liabilities (which current liabilities
                                                     -------------------------
shall include without limitation all expenses incurred by IDX (on a consolidated
- -------------
basis) in connection with planning, preparation and consummation of the Merger
and this Merger Agreement and the transactions contemplated hereby, including,
without limitation (and without duplication), (A) the fees and expenses of legal
counsel, accounting firms and financial advisors, (B) the adjustments to current
assets and "Other Current Liabilities" reflected in the "Merger and
Restructuring Costs" in the InformDX Projected Balance Sheet attached as

Schedule 8.17 (subject to adjustment to the extent of any differences between
- -------------
such projected costs and the actual amounts of such costs), including without
limitation the Termination Payments, Stay Bonuses and Severance indicated in
Schedule 8.17, and (C) the payments required to be listed in Schedule 6.3
pursuant to clause (iv) of Section 6.3 (including payments specified in the last
sentence of Section 6.3); and which current liabilities shall exclude the
                              ---------------------------------------
following current liabilities:  (Y) "current portion of long-term debt and
capital leases" and (Z) "restructuring and purchase accounting".

     (b) Within ninety (90) days after the Closing Date, AMP's financial
officers shall prepare, and Deloitte & Touche LLP (AMP's independent public
accountants) shall complete an audit of, the determination of Closing Working
Capital .  At the completion of the audit, AMP shall deliver written notice (the
"Working Capital Notice") to the Shareholders' Representative and the Escrow
 ----------------------
Agent of the amount of Closing Working Capital determined pursuant to such
audit, and the amount of the Working Capital Deficiency (if any).  If the
Working Capital Deficiency is disputed by the Shareholders' Representative as
provided in the Escrow Agreement, the resolution of such dispute shall be
conducted as provided in the Escrow Agreement.  If there is a Working Capital
Deficiency, the Working Capital Notice shall also indicate the amount charged by
Deloitte & Touche LLP for conducting such audit, which charges shall be
addressed as provided in the Escrow Agreement.

     (c) Delivery of Pre-Closing Balance Sheet.  No later than the fifth (5th)
         -------------------------------------
business day prior to the Closing Date (and no earlier than the 10th business
day prior to the Closing Date), IDX shall prepare and deliver to AMP a pro forma
balance sheet of IDX (on a consolidated basis) as of a date within 10 days prior
to the Closing Date (the "Pre-Closing Balance Sheet") (which Pre-Closing Balance
Sheet shall include accruals through such date for all expenses incurred by IDX
(on a consolidated basis) in connection with planning, preparation and
consummation of the Merger and this Merger Agreement and the transactions
contemplated hereby, including, without limitation, all fees and expenses of
legal counsel, accounting firms, and financial advisors, and other current
liabilities included in the definition of Working Capital in paragraph (a) of
this Section 8.17 (and accruals for reasonable estimates of such expenses
through the Closing Date for which invoices have not yet been received by IDX)).
The Pre-Closing Balance Sheet shall be prepared on a basis consistent with the
Company Financial Statements and shall present fairly in all material respects
the consolidated financial condition of IDX as of the date thereof. No later
than five (5) business days prior to the Closing Date (and no earlier than the
10th business day prior to the Closing Date), IDX shall provide AMP with its
estimate of IDX's Accounts Receivable and Accounts Payable that will be
outstanding as of the Closing Date (including estimates of all fees and expenses
of legal counsel, accounting firms, and financial advisors, whether or not
invoices

                                      50
<PAGE>

have not yet been received by IDX, as well as copies of all invoices
received from such persons and written estimates of invoices not yet received).
IDX represents and warrants that it has delivered to AMP copies of all invoices,
engagement letters and agreements for such services that IDX has received
through the date of this Agreement and IDX agrees that it shall promptly deliver
to AMP all such documents that it hereafter receives through the time of
Closing.

     (d) IDX represents and warrants to AMP that the aggregate outstanding
balance under IDX's credit agreement referenced in Section 9.16 as of the time
immediately prior to Closing (and prior to the payment thereof contemplated in
Section 9.16) will not exceed the amount specified in Section 9.16.

8.18 Benefit Plans.
     --------------

     (a)  Pension Benefit Plans.
          ---------------------

          (i)  Throughout the Transition Period (defined below), AMP or its
subsidiaries shall sponsor one or more retirement plans qualified under Section
401(a) of the Internal Revenue Code that, in the aggregate, shall provide
Equivalent Benefits (as defined below) to all Current IDX Plan Participants (as
defined below.)  For purposes of this section 8.18(a)(i), "Equivalent Benefits"
shall mean benefits that are equal to or greater, in all material respects, than
the benefits provided through the combination of the Pathology Consultants of
America, Inc. 401(k)/Profit sharing Plan and Trust and the Pathology Consultants
of America, Inc. Money Purchase Pension Plan and Trust (the "PCA Plans").  Such
benefits shall include: (1) the right to make employee contributions to the plan
on a pre-tax basis, provided that such right may be eliminated to the extent
that such employee contributions are replaced by employer contributions; (2) the
right to be credited with employer contributions; (3) the right to have such
contributions vest at least as fast as under the vesting schedule in effect on
the Closing Date; (4) the right to direct the investment of funds in the
participant's accounts; and (5) the right of a participant to take withdrawals
and loans from his own accounts. The plan or plans providing such Equivalent
Benefits are hereinafter referred to as the "IDX Plans."  IDX agrees that if the
PCA Plans are used to provide the benefits described above in this Section
8.18(a)(i), the benefits so provided by the PCA Plans shall be deemed to be
Equivalent Benefits.  For purposes of this Section 8.18, "Transition Period"
shall mean the period commencing on the Closing Date and continuing through
December 31, 2001.  For purposes of this Section 8.18, "Current IDX Plan
Participants" shall mean all individuals who are both (x) participants in a PCA
Plan as of the Closing Date, and (y) employees of AMP or any of its
subsidiaries, or of any Company Practice that is not a Specified Practice, as of
the day immediately following the Closing Date.  Notwithstanding the above, AMP
shall have the right to amend either or both of the PCA Plans, or cause such
plan to be amended, including, but not limited to any amendments necessary to
maintain the status of such plans as qualified under Section 401(a) of the
Internal Revenue Code, any amendments desired to reflect the transactions
contemplated by this Agreement, or any amendments necessary to merge,
consolidate or transfer all or a portion of the assets and liabilities of such
PCA Plan with and into any retirement plan(s) sponsored by AMP that is qualified
under Section 401(a) of the Code.

          (ii) Throughout the Transition Period, AMP or one of its subsidiaries
as determined by AMP shall continue to sponsor the PCA Plans for the benefit of
those employees of the Specified Practices, including without limitation leased
employees with respect to which a Specified Practice is the recipient within the
meaning of Code Section 414(n), who were participants in the PCA Plans on the
Closing Date, with benefits to be funded by the respective Specified Practices.
In the event that AMP determines not to continue to sponsor the PCA Plans, or
any other plans, for employees of any Specified Practices for any periods after
the Transition Period, it shall provide notice to the Specified Practices of
that fact a reasonable period of time prior to the date on which it shall cease
such plan sponsorship, and

                                      51
<PAGE>

shall cooperate with the Specified Practices in their assumption of sponsorship
of the PCA Plans or in spinning off the assets of the PCA Plans into new plans
sponsored by the Specified Practices.

          (iii) Each Current IDX Plan Participant who as of the Closing Date
becomes an employee of AMP or its subsidiaries shall be credited with years of
service for eligibility and vesting purposes under any AMP employee pension
benefit plan (within the meaning of Section 3(2) of ERISA) that is qualified
under Section 401(a) of the Code, for prior service with IDX, any Company Entity
or any Company Practice, to the extent that such service was so recognized under
the PCA Plans.

          (b)  Welfare Benefit Plans.   Throughout the Transition Period, AMP or
               ---------------------
one of it subsidiaries shall permit those employees of IDX and its ERISA
Affiliates who are Current IDX Plan Participants, to participate in such
employee welfare benefit plans (within the meaning of Section 3(1) of ERISA),
together with any insurance contracts or agreements related thereto, as AMP
provides to similarly situated employees (the "AMP Welfare Plans").  Each
Current IDX Plan Participant shall be credited with their service with IDX and
its ERISA Affiliates in determining their eligibility to participate in any AMP
Welfare Plans, and shall not be subject to exclusion from such coverage for pre-
existing conditions other than those exclusions that were applicable under the
corresponding employee welfare benefit plans of IDX as in effect immediately
prior to the Closing Date. Notwithstanding the foregoing, AMP may, for any
reason including, without limitation, to prevent an employee welfare benefit
plan from becoming a multiple employer welfare arrangement (within the meaning
of section 3(40) of ERISA), establish additional plans, insurance policies or
contracts that provide benefits which in the aggregate are substantially similar
to those provided under the AMP Welfare Plans, for the benefit of the Current
IDX Plan Participants.  AMP agrees that if and to the extent required under any
existing management services agreement between AMP and a Specified Practice, AMP
shall continue to assist in the negotiation and administration of any employee
welfare benefit plans (within the meaning of Section 3(l) of ERISA) that are
maintained by the Specified Practice.

     8.19 Indemnification of IDX Officers and Directors.  The Charter and bylaws
          ---------------------------------------------
of the Surviving Corporation shall contain provisions with respect to
indemnification substantially to the same effect as those set forth in IDX's
Charter and Bylaws on the date hereof, which provisions shall not be amended,
modified or otherwise repealed for a period of seven years after the Effective
Time in any manner that would adversely affect the rights thereunder as of the
Effective Time (with respect to periods prior to and until the Effective Time)
of individuals who at the Effective Time were directors or officers of IDX,
unless such modification is required after the Effective Time by applicable law.

                                   ARTICLE 9
               CONDITIONS TO OBLIGATIONS OF AMP AND MERGER CORP.
               -------------------------------------------------

     The obligation of AMP and Merger Corp. to consummate the Closing of the
Merger is subject to the satisfaction, or written waiver by AMP, at or prior to
Closing, of each of the following conditions:

     9.1  Representations and Warranties.  The representations and warranties of
          ------------------------------
the Company Entities set forth in this Agreement shall be true and correct in
all material respects as of the Effective Time with the same force and effect as
if such representations and warranties had been made at and as of the Effective
Time, except with respect to any of such representations and warranties
referring to a state of facts existing on a specified date prior to the Closing
Date, it shall be sufficient if at the Effective Time such representation and
warranty continues to describe accurately the state of facts existing on the
date so specified; it being agreed however that any failures in such
representations and warranties to be

                                      52
<PAGE>

true and correct (other than failures as a result of fraud or intentional
misrepresentation) shall not cause the conditions in this Section 9.1 to fail to
be satisfied if such failures do not, individually or in the aggregate, result
in a Company Material Adverse Effect.

     9.2  Performance; Covenants.  All of the terms, covenants and conditions of
          ----------------------
the Merger Documents to be complied with or performed by the Company Entities or
the Shareholders at or prior to Closing shall have been complied with and
performed in all material respects including, but not limited to, the delivery
to AMP of the following documents:

          (a) Good standing certificates regarding IDX and each IDX Subsidiary,
              --------------------------
certified by the Secretary of State of the respective state of incorporation and
all states where such entities are qualified to do business, dated within
fifteen (15) business days of the Closing;

          (b) A certificate dated as of the Closing Date signed by the duly
                -----------
authorized officers of IDX certifying the satisfaction of Section 9.1 and that
the Company Entities have complied in all material respects with all obligations
under this Agreement required to be performed by them at or prior to Closing;

          (c) Necessary Consents and Approvals.  All consents and approvals
              --------------------------------
necessary for the consummation of the transactions contemplated by the Merger
Documents which are disclosed or required to be disclosed in the Schedules
hereto, including any required consents, licenses, permits or other approvals
identified in Schedule 6.3; and the required waiting period under the HSR Act
shall have expired or been terminated as necessary to consummate the Merger
without violation of the HSR Act.

          (d) Resolutions duly adopted by IDX's Board of Directors and
              -----------
Shareholders approving the execution, delivery and performance of this Agreement
and the consummation of the Merger, certified by an appropriate officer of IDX;

          (e) Resignations and Releases in the form attached as Exhibit G
              -------------------------                         ---------
hereto, executed and delivered by each of the officers and directors of the
Company Entities identified in Exhibit G, as applicable, effective as of the
Effective Time (subject to approval by AMP of the items listed in the respective
Exhibits A thereto);

          (f) Termination of Stockholder Agreements; Other Stock Agreements.
              -------------------------------------------------------------
The following agreements shall have been terminated, and evidence of termination
reasonably satisfactory to AMP shall have been delivered to AMP:  (i) the
Investor Stockholder Agreement dated June 30 2000 among IDX, ABS Capital
Partners II, L.P., Union Street Partners, L.P., James Shapiro, Questor Partners
Fund, L.P., Questor Side-By-Side Partners, L.P., and certain other parties
including certain stockholders of IDX, and (ii) all "Stock Agreements" listed in
Schedule 6.13 or other Schedules to this Agreement (other than the "Stock
Agreement" with Stephen F. Drake dated December 24, 1997).

     9.3  No Material Adverse Change.  There shall not have occurred a Company
          --------------------------
Material Adverse Effect between the date hereof and the Effective Time.

     9.4  No Injunction, Etc.  No action or proceeding shall have commenced
          -------------------
before any court or governmental agency, and no applicable legislation shall
have been enacted by any legislative body, to enjoin, restrain, prohibit or
obtain substantial damages in respect of, or which is related to, arises out of,
this Agreement or the consummation of the Merger, if such action, proceeding, or
legislation, in the reasonable judgment of AMP and its counsel, would make it
inadvisable to consummate such

                                      53
<PAGE>

transactions. In the event any order, decree or injunction shall have been
issued, each party shall use its reasonable efforts to remove any such order,
decree or injunction.

     9.5  Legal Opinions.  AMP shall have received an opinion of counsel to the
          --------------
Company Entities substantially in the form attached hereto as Exhibit H (subject
                                                              ---------
to AMP's approval of the opinion of Tennessee counsel referenced therein, which
approval shall not be unreasonably withheld).

     9.6  Pooling-of-Interests.  AMP shall have received (i) a letter addressed
          --------------------
to AMP from AMP's independent accountants, as of a date reasonably approximate
to the date of the Closing, to the effect that, as of such date, AMP is eligible
to participate in a pooling-of-interests combination, (ii) a letter addressed to
AMP from AMP's independent accountants, satisfactory in form and substance, to
the effect that (based in part on the letter from AMP's independent accountants)
the Merger should be treated as a pooling-of-interests for accounting and
financial reporting purposes, subject to satisfaction of post-Merger conditions,
and (iii) a copy of the letter delivered to the accountants for IDX that IDX is
eligible to participate in a pooling-of-interests combination.

     9.7  Affiliate Agreements.  AMP shall have received the Affiliate
          --------------------
Agreements contemplated by Section 8.14.

     9.8  Management Employment Agreements; Termination of Severance Agreements.
          ---------------------------------------------------------------------
Brian Carr and James Billington shall have entered into employment agreements in
substantially the applicable forms attached as Exhibit I (the "Employment
                                               ---------       ----------
Agreements").
- ----------

     9.9  Investment Representation Letters.  Subject to the permitted
          ---------------------------------
exceptions indicated in this Section 9.9 below, all Shareholders shall have
completed, executed and delivered the Investment Representation Letter in the
form attached hereto and indicated therein that such Shareholder is an
Accredited Investor (provided, however, that the conditions in this Section 9.9
shall not be deemed to be unsatisfied if no more than 35 Shareholders in the
aggregate fail to so deliver the Investment Representation Letter or indicate
therein that they are not Accredited Investors; and further provided that any
holder of Assumed Options who is not a holder of any IDX Common Stock or IDX
Warrants that fails to so deliver the Investment Representation Letter need not
be counted for purposes of such 35-holder limit on failures to deliver the
Investment Representation Letter), and copies of all such Investment
Representation Letters shall have been delivered to AMP.  In addition, if this
Section 9.9 is not otherwise satisfied pursuant to its terms, AMP may, in AMP's
discretion, rely on other documentation reasonably satisfactory to AMP in order
to provide AMP with reasonable assurances in the nature of those provided in the
Investment Representation Letters (including, without limitation, that the
Shareholder(s) in question are Accredited Investors), with respect to one or
more of the Shareholders that fails to deliver the Investment Representation
Letter as required under this Section 9.9;.

     9.10 IDX Shareholder Approval.  This Agreement and the Merger and all other
          ------------------------
documents and instruments to be delivered in connection herewith, shall have
been approved by the Shareholders in accordance with TBCA.  In addition, the
holders of no more than ten percent (10%) of IDX Common Stock shall have pursued
dissenters rights under the TBCA by giving notice of intent to demand payment
for his shares in connection with the Merger as provided in Chapter 23 of the
TBCA or otherwise.

     9.11 [intentionally omitted]

     9.12 Articles of Merger.  IDX shall have executed and delivered to AMP and
          ------------------
Merger Corp. the articles of merger to be filed with the Secretary of State of
the State of Tennessee in connection with the Merger.

                                      54
<PAGE>

     9.13 Consent of Lender; Other Required Consents.  AMP shall have obtained
          ------------------------------------------
all consents and approvals required with respect to the Merger and this
Agreement under its Credit Agreement with Fleet National Bank (the "Fleet Credit
Agreement"), and the other required consents identified in Schedule 7.3 (if
any).

     9.14 Compliance with Securities Laws.  IDX shall have complied in all
          -------------------------------
respects with Sections 6.35 and 8.13(c), except for any noncompliance that would
not result in (i) the failure of the Merger to comply with the exemption from
the registration requirements of the Securities Act provided under Regulation D
(including Rule 506) thereunder, or (ii) any other violation of the Securities
Act or the Exchange Act (or the rules thereunder) in connection with the Merger;
and except for any noncompliance by IDX that was caused by AMP.

     9.15 Escrow Agreement.  The parties to the Escrow Agreement shall have
          ----------------
executed and delivered the Escrow Agreement in the form attached as Exhibit D
hereto (subject to any changes that may be required by the Escrow Agent prior to
execution thereof, if such changes are approved by AMP and IDX (which approval
shall not be unreasonably withheld)).

     9.16 Pay-off Letter.  AMP shall have received a customary "estoppel/pay-
          ---------------
off" letter (reasonably satisfactory to AMP) from Bank of America regarding
IDX's credit agreement with such bank, which reflects (i) the aggregate amount
necessary to payoff all amounts outstanding thereunder, inclusive of principal,
interest and penalty, that does not exceed $8,000,000, and (ii) the Bank's
confirmation of the termination of all liens encumbering the assets of the
Company Entities thereunder, upon (i) payment of such payoff amount and (ii) if
applicable, replacement of the letters of credit under credit agreement.

     9.17 [intentionally omitted]

     9.18 Required Subordination Agreements.  All subordination agreements (if
          ---------------------------------
any) required by the Fleet Credit Agreement to be entered into by persons to
whom any of the Company Entities have obligations shall have been executed and
delivered to Fleet National Bank and AMP in form satisfactory to Fleet.

     9.19 IDX Pre-Closing Balance Sheet  IDX shall have prepared and delivered
          -----------------------------
the Pre-Closing Balance Sheet in accordance with Section 8.17.

     9.20 Amendment of Obligations to Issue Stock  IDX shall have caused to be
          ---------------------------------------
amended, to the reasonable satisfaction of AMP pursuant to terms approved by AMP
prior to such amendment, all rights of any person to receive, and all
obligations of IDX or any IDX Subsidiary to issue, any shares of IDX Common
Stock or other securities of IDX or any capital stock or other securities of any
IDX Subsidiary that are disclosed or required to be disclosed in Schedule 6.5(a)
or Schedule 6.5(b), other than the IDX Options and IDX Warrants (which are
otherwise addressed in Section 3.5 hereof); it being agreed that such amendments
(i) shall in substance have the effect contemplated in Section 3.5(e) hereof
pursuant to which such rights will be converted into rights to acquire shares of
AMP Common Stock in a manner that is materially consistent with the Exchange
Ratio (with due consideration, in the case of rights to be amended which are not
rights to acquire shares of IDX Common Stock, for the differences in the per
share value between the IDX Common Stock and such other securities), and (ii)
must be done in a fashion that will not cause the Merger to fail to qualify for
pooling treatment.  AMP shall have received documentation of such amendments
reasonably satisfactory to AMP.  The rights to be terminated or amended under
this Section 9.20 shall include, without limitation, the obligation for shares
of Pathsource, Inc. to be issued pursuant to that certain Asset Purchase
Agreement, dated as of October 13, 1998, by and

                                      55
<PAGE>

between TID Acquisition Corp. and Institute for Dermatopathology Management
Company, L.L.C., and Pathsource, Inc.

                                   ARTICLE 10
                    CONDITIONS TO OBLIGATIONS OF THE COMPANY
                    ----------------------------------------

     The obligations of the Company to consummate the Closing of the Merger is
subject to the satisfaction, or waiver by the Company, at or prior to Closing,
of each of the following conditions:

     10.1 Representations and Warranties.  The representations and warranties of
          ------------------------------
AMP and Merger Corp. set forth in this Agreement shall be true and correct in
all material respects as of the Effective Time with the same force and effect as
if such representations and warranties had been made at and as of the Effective
Time, except with respect to any of such representations and warranties
referring to a state of facts existing at a specified date prior to the Closing
Date, it shall be sufficient if at the Effective Time such representation and
warranty continues to describe accurately in all material respects the state of
facts existing on the date so specified; it being agreed however that any
failures in such representations and warranties to be true and correct (other
than failures as a result of fraud or intentional misrepresentation) shall not
cause the conditions in this Section 10.1 to fail to be satisfied if such
failures do not, individually or in the aggregate, result in an AMP Material
Adverse Effect.

     10.2 Performance; Covenants.  All of the terms, covenants and conditions of
          ----------------------
this Agreement to be complied with or performed by AMP at or prior to the
Closing shall have been complied with and performed in all material respects,
including, but not limited to delivery of the following documents:

          (a) A good standing certificate regarding AMP and Merger Corp.
                -------------------------
certified by the Secretary of State of the States of Delaware and Tennessee,
respectively, each dated within 15 days prior to Closing;

          (b) A certificate dated as of the Closing Date signed by a duly
                -----------
authorized officer of AMP and Merger Corp. certifying satisfaction of Section
10.1, and that AMP and Merger Corp. have complied in all material respects with
all obligations under this Agreement required to be performed by them at or
prior to Closing;

          (c) Resolutions duly adopted by the Board of Directors of AMP and the
              -----------
Board of Directors and shareholder of Merger Corp. approving the execution,
delivery and performance of this Agreement and the consummation of the Merger,
certified by an appropriate officer of AMP and Merger Corp., respectively.

     10.3 Necessary Consents and Approvals. The required waiting period under
          --------------------------------
the HSR Act shall have expired or been terminated as necessary to consummate the
Merger without violation of the HSR Act.

     10.4 No Material Adverse Change.  There shall not have occurred an AMP
          --------------------------
Material Adverse Effect between the date hereof and the Effective Time.

     10.5 No Injunction, Etc.  No action or proceeding shall have commenced
          -------------------
before any court or governmental agency, and no applicable legislation shall
have been enacted by any legislative body, to enjoin, restrain, prohibit or
obtain substantial damages in respect of, or which is related to, arises out of,
this Agreement or the consummation of the Merger, if such action, proceeding, or
legislation, in the

                                      56
<PAGE>

reasonable judgment of IDX and its counsel, would make it inadvisable to
consummate such transactions. In the event any order, decree or injunction shall
have been issued, each party shall use its reasonable efforts to remove any such
order, decree or injunction.

     10.6  Stockholder Approval.  This Agreement and the Merger shall have been
           --------------------
approved by the Shareholders of IDX in accordance with the TBCA.

     10.7  Articles of Merger.  Merger Corp. shall have executed and delivered
           ------------------
to IDX the articles of merger to be filed with the Secretary of State of the
State of Tennessee in connection with the Merger.

     10.8  Tax-Free Merger.  No event outside the control of the Company shall
           ---------------
have occurred between the date of this Agreement and the Closing Date, so as to
jeopardize the treatment of the transactions contemplated by the Merger as a
reorganization within the meaning of Section 368(a) of the Code.  IDX shall have
obtained and received an opinion from a law firm or accounting firm reasonably
acceptable to IDX to the effect that the Merger will qualify for federal income
tax purposes as a reorganization within the meaning of Section 368(a) of the
Code.

     10.9  Registration Rights Agreement.  AMP shall have executed and delivered
           -----------------------------
the Registration Rights Agreement.

     10.10 Legal Opinion.  IDX shall have received an opinion of counsel to AMP
           -------------
substantially in the form attached hereto as Exhibit J.
                                             ---------

     10.11 Nasdaq Listing.  The shares of AMP Common Stock to be issued
           --------------
pursuant to the Merger shall be approved for listing on Nasdaq upon issuance.

                                   ARTICLE 11
                                  TERMINATION
                                  -----------

     11.1 Right of Termination.  This Agreement and the Merger may be terminated
          --------------------
at any time prior to the Closing Date as follows:

          (a) By the mutual written consent of AMP and IDX;

          (b) by either IDX or AMP if the Effective Time shall not have occurred
prior to the close of business on December 29, 2000; provided, that the party
seeking to terminate this Agreement pursuant to this Section 11.1(b) shall not
have breached in any material respect its obligations under this Agreement in
any manner that shall have materially contributed to the failure to consummate
the Merger on or before such date;

          (c) by either IDX or AMP if (i) a statute, rule, regulation or
executive order shall have been enacted, entered, promulgated or enforced by any
Governmental Authority prohibiting the consummation of the Merger substantially
on the terms contemplated hereby or (ii) an order, decree, ruling or injunction
shall have been entered permanently restraining, enjoining or otherwise
prohibiting the consummation of the Merger substantially on the terms
contemplated hereby and such order, decree, ruling or injunction shall have
become final and non-appealable; provided, that the party seeking to terminate
this Agreement pursuant to this Section 11.1(c)(ii) shall have used its
reasonable best efforts to remove such order, decree, ruling or injunction;

                                      57
<PAGE>

        (d)  by IDX:

             (i)    if AMP or Merger Corp. shall have materially breached any of
   its representations or warranties or agreements herein which breach would
   give rise to the failure of the conditions set forth in Section 10.1 hereof
   to be satisfied, which breach is incapable of being cured or has not been
   cured by the date that is 15 business days following written notice thereof
   to AMP from IDX;

             (ii)   if the Board of Directors of IDX shall have withdrawn or
   modified in a manner adverse to AMP its approval or recommendation of this
   Agreement or the Merger in connection with entering into a definitive
   agreement providing for the transactions contemplated by a Superior Proposal,
   provided that IDX shall have complied with the provisions of Section 8.2
   hereof, including the notice provisions therein; and concurrently with or
   prior to such termination, IDX has confirmed to AMP its obligation to pay the
   Company Termination Fee set forth in Section 11.3 (such termination by IDX
   shall not be deemed a breach of this Agreement); or

             (iii)  if the Merger does not qualify as a pooling of interests
   transaction for financial accounting purposes due to breaches of AMP's
   covenants or warranties under this Agreement; provided that IDX will not have
   the right to terminate under this clause (iii) if IDX itself fails or the
   terms of the Merger fail to satisfy the pooling of interest rules for such
   pooling treatment;

        (e)  by AMP:

             (i)    if IDX shall have materially breached any of its
   representations or warranties or agreements herein which breach would give
   rise to the failure of the conditions set forth in Section 9.1 hereof to be
   satisfied, which breach is incapable of being cured or has not been cured by
   the date that is 15 business days following written notice thereof to IDX
   from AMP; or

             (ii)   if (A) the Board of Directors of IDX or any committee
   thereof shall have withdrawn or modified (in a manner adverse to AMP) its
   approval or recommendation of this Agreement or the Merger; (B) the Board of
   Directors of IDX or any committee thereof shall have recommended to the
   stockholders of IDX, taken no position with respect to, or failed to
   recommend against acceptance of, any Acquisition Proposal; (C) IDX shall have
   entered into any definitive agreement with respect to an Acquisition
   Proposal; or (D) the Board of Directors of IDX or any committee thereof shall
   have resolved to do any of the foregoing;

         (f) by either IDX or AMP if (i) the IDX Shareholders Meeting
(including any adjournments thereof) shall have been held and completed and the
Shareholders shall have taken a final vote on a proposal to approve this
Agreement, and (ii) the required approval of the Shareholders shall not have
been obtained; provided, that the party seeking to terminate this Agreement
pursuant to this Section 11.1(f) shall not have breached in any material respect
its obligations under this Agreement in any manner that shall have materially
contributed to the failure to obtain such approval; it being agreed, however,
that a termination or purported termination of this Agreement by IDX under this
paragraph (f) on the same date as AMP terminates under this paragraph (f) shall
not preclude AMP's right to terminate the Agreement under this paragraph (f) and
to recover any amounts due to AMP by reason thereof as provided in this Article
11;

                                      58
<PAGE>

          (g) by AMP, if IDX shall have failed to include in the Proxy Statement
a recommendation by the IDX Board of Directors to approve the Merger, or shall
have failed to call or conduct the IDX Shareholders Meeting in accordance this
Agreement;

          (h) by AMP if the Merger does not qualify as a pooling of interests
transaction for financial accounting purposes due to breaches of IDX's covenants
or warranties under this Agreement; provided that AMP will not have the right to
terminate under this clause (h) if AMP itself fails or the terms of the Merger
fail to satisfy the pooling of interest rules for such pooling treatment;

          (i) by AMP if IDX fails to satisfy the condition to closing set forth
in Section 9.9 by the close of business on December 29, 2000; it being agreed,
however, that a termination or purported termination of this Agreement by IDX
under Section 11.1(b) on the same date as AMP terminates under this paragraph
(i) shall not preclude AMP's right to terminate the Agreement under this
paragraph (i) and to recover any amounts due to AMP by reason thereof as
provided in this Article 11.

          (j) by IDX if AMP fails to satisfy or waive the condition to closing
set forth in Section 9.13 with respect to the Fleet Credit Agreement by the
close of business on December 29, 2000; it being agreed, however, that a
termination or purported termination of this Agreement by AMP under Section
11.1(b) on the same date as IDX terminates under this paragraph (j) shall not
preclude IDX's right to terminate the Agreement under this paragraph (j) and to
recover any amounts due to IDX by reason thereof as provided in this Article 11.

     11.2 Effect of Termination.  In the event of the termination of this
          ---------------------
Agreement pursuant to and in accordance with Section 11.1, this Agreement shall
become void and have no effect, without any liability or obligation under this
Agreement on the part of any party or its Affiliates, agents, advisors or
stockholders, except that (i) the provisions of this Section 11.2, and Sections
6.34, 7.12, 8.7, 11.3 and Article 14 of this Agreement shall survive any such
termination, and (ii) except as otherwise provided herein, a termination shall
not relieve the breaching party from liability for a breach of this Agreement.

     11.3 Certain Termination Fees.
          ------------------------

          (a) In the event that a Company Termination Fee Event (as defined
below) occurs, then IDX shall pay AMP a fee equal to $2,000,000 (the "Company
Termination Fee") payable by wire transfer of same day funds at the applicable
time set forth in this paragraph below.  A "Company Termination Fee Event" shall
mean a termination of this Agreement (i) by AMP pursuant to any of Sections
11.1(e)(ii), 11.1(f), 11.1(g) or 11.1(i); provided that a termination under
                                          -------------
either of Sections 11.1(f) or 11.1(i) shall only be a Company Termination Fee
Event if all other conditions to Closing in Articles 9 and 10 have been
satisfied or waived, other than the conditions in Sections 10.7, 10.8 (as to
delivery of the tax opinion) and 10.10 (but only if delivery of such legal
opinion has been tendered, in substantially the form required, subject to the
occurrence of the Closing in accordance with the terms of this Agreement), the
condition in Section 10.6 in the case of a termination under Section 11.1(f),
and other than those conditions that are not satisfied due to either a breach by
IDX under this Agreement or actions or omissions of IDX that have frustrated the
satisfaction of a condition or IDX's failure to use reasonable efforts to
satisfy any condition, or (ii) by IDX pursuant to Section 11.1(d)(ii).  Upon the
occurrence of a Company Termination Fee Event, IDX shall pay to AMP, or cause to
be paid, the Company Termination Fee (1) in the case of a Company Termination
Fee Event other than pursuant to Section 11.1(d)(ii), not later than one
business day following such termination, or (2) in the case of a Company
Termination Fee Event pursuant to Section 11.1(d)(ii), prior to or concurrently
with such termination; and in any case, in cash, by wire transfer of immediately
available funds to an account designated by AMP.  Except for nonpayment of the
Company Termination Fee, AMP and Merger Corp.

                                      59
<PAGE>

hereby agree that, upon any termination of this Agreement pursuant to a Company
Termination Fee Event, in no event shall AMP or Merger Corp. be entitled to seek
or to obtain any further recovery or judgment against IDX or any of its assets,
or against any of its Affiliates, agents, advisors or stockholders relating to
the termination of this Agreement and the transactions contemplated hereby, and
in no event shall AMP or Merger Corp. be entitled to seek or obtain any other
amount relating thereto, except in the case of fraud or intentional
misrepresentation.

          (b) Each party acknowledges that the agreements contained in this
Section 11.3 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, the other party would not enter
into this Agreement; accordingly, if IDX fails promptly to pay any Company
Termination Fee when due pursuant to this Section 11.3, and, in order to obtain
such payment, AMP commences a suit that results in a final and non-appealable
judgment against IDX for the such Company Termination Fee, IDX shall pay to AMP
its costs and expenses actually incurred (including reasonable attorneys' fees
and expenses) in connection with such suit, together with interest on the amount
of the fee at the prime rate of Bank of America, N.A. in effect on the date such
payment was required to be made.

          (c) Upon the occurrence of a termination by AMP under Section
11.1(e)(i) or 11.1(h), IDX shall, upon submission of one or more statements
therefor, accompanied by reasonable supporting documentation, reimburse AMP for
up to $625,000 of all out of pocket costs, fees and expenses reasonably incurred
by AMP or on its behalf arising out of, in connection with, or related to this
Agreement, the Merger and the consummation of all transactions contemplated by
this Agreement (including, without limitation, if applicable, HSR Act and other
filing fees, fees and expenses of printers, accountants, attorneys, consultants
(including without limitation, Acquisition Management Services, Inc.) and
appraisers); it being agreed however that no fees or expenses of any financial
advisor or investment banking firm shall be reimbursed under this clause (c)
(including without limitation any fees of the firm of Donaldson, Lufkin &
Jenrette).

          (d) Upon the occurrence of a termination of this Agreement by IDX
under Section 11.1(d)(i), 11.1(d)(iii) or 11.1(j) (subject to the proviso in
this paragraph below), AMP shall, upon submission of one or more statements
therefor, accompanied by reasonable supporting documentation, reimburse IDX for
up to $625,000 of all out of pocket costs, fees and expenses reasonably incurred
by IDX or on its behalf arising out of, in connection with, or related to this
Agreement, the Merger and the consummation of all transactions contemplated by
this Agreement (including, without limitation, if applicable, HSR Act and other
filing fees, fees and expenses of printers, accountants, attorneys, consultants
and appraisers); it being agreed however that no fees or expenses of any
financial advisor or investment banking firm shall be reimbursed under this
clause (c) (including without limitation any fees of the firm of SunTrust
Equitable Securities); provided that AMP shall not be obligated to reimburse IDX
                       -------------
under this paragraph (d) in the case of a termination under 11.1(j) unless all
other conditions to Closing in Articles 9 and 10 have been satisfied or waived,
other than the conditions in Sections 9.12 and 9.5 (but only if delivery of such
legal opinion has been tendered, in substantially the form required, subject to
the occurrence of the Closing in accordance with the terms of this Agreement),
the condition in Section 9.13 (with respect to the Fleet Credit Agreement), the
condition in Section 9.18 (but only if IDX has used reasonable commercial
efforts to obtain any subordination agreements required under Section 9.18
(which efforts do not require the payment of money or other consideration to the
persons required to deliver such subordinations)), and other than those
conditions that are not satisfied due to either a breach by AMP under this
Agreement or actions or omissions of AMP that have frustrated the satisfaction
of a condition or AMP's failure to use reasonable efforts to satisfy any
condition.

                                      60
<PAGE>

                                   ARTICLE 12
                       SURVIVAL OF TERMS; INDEMNIFICATION
                       ----------------------------------

     12.1  Survival.  All of the terms and conditions of this Agreement,
           --------
together with the representations, warranties and covenants contained herein or
in any instrument or document delivered or to be delivered pursuant to this
Agreement, shall survive the execution of this Agreement and the Closing
notwithstanding any investigation heretofore or hereafter made by or on behalf
of any party hereto; provided, however, that (a) the agreements and covenants
set forth in this Agreement shall survive and continue until all obligations set
forth therein shall have been performed and satisfied; and (b) all
representations and warranties shall survive after the Closing until the one-
year anniversary of the Effective Time (the "Survival Period"), subject to
Section 12.6(c), except for representations and warranties for which a claim for
indemnification as provided under this Article 12 has been made shall be pending
as of the end of the Survival Period, in which event such applicable
representations and warranties shall survive thereafter with respect to such
claim until the final disposition thereof. No claim for indemnification may be
made after the Survival Period, subject to Section 12.6(c).

     12.2  Indemnification by IDX.    Subject to this Article 12, AMP and its
           ----------------------                     ----------
Affiliates, including the Company Entities, officers, directors, employees,
shareholders, representatives and agents shall be indemnified and held harmless
by IDX at all times after the date of this Agreement, against and in respect of
any and all damage, loss, deficiency, liability, obligation, commitment, cost or
expense (including the reasonable fees and expenses of counsel) (collectively,
"Losses") resulting from, or in respect of, any of the following:

          (a) Any misrepresentation, breach of warranty, or non-fulfillment of
any obligation on the part of any of the Company Entities under this Agreement,
any document relating thereto or contained in any schedule or exhibit to this
Agreement or from any misrepresentation in or omission from any certificate,
schedule, other agreement or instrument by any of the Company Entities
hereunder;

          (b) Any and all liabilities of any nature whether accrued, absolute,
contingent or otherwise, and whether known or unknown, for those matters
identified or required to be identified on Schedule 6.10 (litigation) attached
                                           -------------
hereto; and

          (c) Any Benefits Compliance Matters (as defined in Section 6.15).

     12.3  Indemnification by AMP.  Subject to this Article 12, the Company
           ----------------------                   ----------
Entities and Shareholders and their heirs, assigns, representatives and agents
shall be indemnified and held harmless by AMP, at all times after the date of
this Agreement, against and in respect of any and all Losses resulting from, or
in respect of any misrepresentation, breach of warranty, or non-fulfillment of
any obligation on the part of AMP or Merger Corp. under this Agreement.

     12.4  Third-Party Claims.    Except as otherwise provided in this
           ------------------
Agreement, the following procedures shall be applicable with respect to
indemnification for third-party Claims.  Promptly after receipt by the party
seeking indemnification hereunder (hereinafter referred to as the "indemnitee")
of notice of the commencement of any (a) Tax audit or proceeding for the
assessment of Tax by any taxing authority or any other proceeding likely to
result in the imposition of a Tax liability or obligation or (b) any action or
the assertion of any Claim, liability or obligation by a third party (whether by
legal process or otherwise), against which Claim, liability or obligation the
other party to this Agreement (hereinafter the "indemnitor") is, or may be,
required under this Agreement to indemnify such indemnitee, the indemnitee will,
if an indemnification claim thereon is to be, or may be, made hereunder against
the indemnitor, notify the indemnitor in writing of the commencement or
assertion thereof and

                                      61
<PAGE>

give the indemnitor a copy of such Claim, process and all legal pleadings (which
notice, if made by or on behalf of any one or more Shareholders, shall be made
by the Shareholders' Representative). The indemnitor shall have the right to
participate in the defense of such action with counsel of reputable standing.
The indemnitor shall have the right to assume the defense of such action unless
such action (i) may result in injunctions or other equitable remedies in respect
of the indemnitee or its business; (ii) may result in liabilities which, taken
with other then existing Claims under this Article 12, would not be fully
                                           ----------
indemnified hereunder; or (iii) may have an adverse impact on the business or
financial condition of the indemnitee after the Closing Date (including an
effect on the Tax liabilities, earnings or ongoing business relationships of the
indemnitee). The indemnitor and the indemnitee shall cooperate in the defense of
such Claims. In the case that the indemnitor shall assume or participate in the
defense of such audit, assessment or other proceeding as provided herein, the
indemnitee shall make available to the indemnitor all relevant records and take
such other reasonable action and sign such documents as are necessary to defend
such audit, assessment or other proceeding in a timely manner (and if the
indemnitee is AMP, such requirement will be satisfied by providing such items to
the Shareholders' Representative). If the indemnitee shall be required by
judgment or a settlement agreement to pay any amount in respect of any
obligation or liability against which the indemnitor has agreed to indemnify the
indemnitee under this Agreement, the indemnitor shall promptly reimburse the
indemnitee in an amount equal to the amount of such payment plus all reasonable
expenses (including legal fees and expenses) incurred by such indemnitee in
connection with such obligation or liability subject to this Article 12. An
                                                             ----------
indemnitee shall have the right to settle any Claim against it for which the
indemnitor is or may be liable hereunder, but the indemnitor's indemnification
obligation with respect to the settled Claim is subject to the prior written
approval of the indemnitor, which approval shall not be unreasonably withheld or
delayed (and if the indemnitee is AMP, such approval shall be deemed to have
been given if approved by the Shareholders' Representative, which approval shall
not be unreasonably withheld or delayed). An indemnitor shall not settle or seek
to settle any such Claim by a third party against an indemnitee except and only
to the extent that the indemnitee gives prior written approval to the indemnitor
to do so in the specific case (and if the indemnitor is AMP, such approval shall
be deemed to have been given if approved by the Shareholders' Representative,
which approval shall not be unreasonably withheld or delayed), and no such
settlement shall be binding on the indemnitee unless the settlement is duly
agreed to in writing by the indemnitee (and if the indemnitor is AMP, such
agreement to a settlement shall be deemed to have been given if approved by the
Shareholders' Representative, which approval shall not be unreasonably withheld
or delayed).

     An indemnitee shall have the right to employ its own counsel in any case,
but the fees and expenses of such counsel shall be at the expense of the
indemnitee unless (a) the employment of such counsel shall have been authorized
in writing by the indemnitor in connection with the defense of such action or
Claim, (b) the indemnitor shall not have employed, or is prohibited under this
Section from employing, counsel in the defense of such action or Claim, or (c)
such indemnitee shall have reasonably concluded upon advice of counsel that
there may be material defenses available to it which are materially contrary to,
or materially inconsistent with, those available to the indemnitor (which
determination, if made by or on behalf of any one or more Shareholders, shall be
made by the Shareholders' Representative); in any of which events under the
foregoing clauses (a), (b) and (c) such fees and expenses of not more than one
additional counsel for the indemnified parties shall be borne by the indemnitor;
it being agreed that the indemnifying party shall not, in connection with any
one such action or separate but substantially similar or related actions
relating to one or more indemnified parties arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one attorney at any time for all such indemnified parties.

                                      62
<PAGE>

     12.5  Indemnification for Prior Acts.  The Company Entities expressly
           ------------------------------
assign to AMP all rights of indemnification under prior purchase agreements to
the extent such assignment is necessary to allow AMP to proceed against prior
owners of businesses purchased by IDX or other Company Entities.

     12.6  Limitations on Indemnification.
           ------------------------------

          (a) The indemnification rights pursuant to this Article 12 shall,
after the Closing, be the exclusive remedy of the parties for Losses arising out
of or in connection with this Agreement and the transactions contemplated
hereby, except as provided in Section 12.6(c) below, provided, however, that the
foregoing limitation shall not limit the remedies available to the parties under
any agreement entered into pursuant hereto or equitable remedies that may be
available in respect of any breach of any covenant contained in this Agreement.
The parties hereby acknowledge, without modifying the terms of this Agreement,
that this Article 12 shall not limit any rights and remedies of any persons who
become holders of AMP Common Stock pursuant to the Merger with respect to claims
that such persons may have against AMP under federal or state securities laws
that arise independently of the terms of this Agreement.

          (b) After the Closing, all obligations of IDX to indemnify under this
Agreement shall be satisfied solely and exclusively under the terms of the
Escrow Agreement, which Escrow Agreement provides for the delivery by the Escrow
Agent to AMP, and the cancellation by AMP, of shares of AMP Common Stock having
an aggregate value equal to the amount for which AMP is entitled to be
indemnified.  AMP's aggregate liability under this Article 12 shall be limited
to and shall not exceed one-tenth (1/10) of the product of (a) the number of
shares of AMP Common Stock included in the Merger Consideration, multiplied by
(b) the Average Trading Price.

          Except as provided otherwise pursuant to clauses (i) and (ii) of this
paragraph, IDX shall not be liable for its indemnifications under this Article
12 unless and until the first time when the aggregate Losses indemnified by IDX
under this Article 12 exceed One Hundred Fifty Thousand Dollars ($150,000) (the
"IDX Threshold"), in which event IDX shall be liable for the full amount of such
 -------------
Losses (including the initial $150,000 thereof) subject to the terms of this
Article 12 and the Escrow Agreement; provided, however that (i) the IDX
Threshold shall not apply to the breach of Sections 6.1(a), 6.2, 6.5 and 6.19,
and (ii) IDX shall not be liable for its indemnifications under Section 12.2(b)
unless and until the aggregate Losses indemnified by IDX under Section 12.2(b)
exceed One Hundred Fifty Thousand Dollars ($150,000), in which event IDX shall
be liable only for amount of such aggregate Losses to the extent such Losses
exceed $150,000 (it being agreed, however, that this clause (ii) shall not limit
the liability of IDX for its indemnifications under Section 12.2(a)).

          (c) The limitations on indemnification and remedies contained in this
Article 12 (including without limitation the limited duration of Survival Period
and the other limitations in this Section 12.6) shall not apply to fraud or
intentional misrepresentation by a party, in which case the Survival Period and
the applicable representations and warranties shall survive thereafter with
respect to such claim until the final disposition thereof.

          (d) The amount of any Losses subject to indemnification under Section
12.2 shall be calculated net of any amounts which are recovered by AMP or the
Surviving Corporation under applicable insurance policies with respect to such
Losses before the applicable claim for indemnification under Section 12.2 is
paid pursuant to this Article 12 and the Escrow Agreement, and in the event they
receive any recovery, the amount of such recovery shall be applied first, to
reimburse AMP and the Surviving Corporation for their out-of-pocket expenses
(including reasonable attorneys' fees) expended in pursuing such recovery, and
any remainder shall be retained by AMP and offset against the amount of

                                      63
<PAGE>

such Losses (net of any income tax payable by AMP on account of receiving such
insurance proceeds, if any).

          In addition, all Losses subject to indemnification under Section 12.2
shall be calculated net of (i) any tax benefits which are realized by AMP as a
result thereof for the year in which such Losses occurred, and (ii) the net
present value (using a discount factor of 10.0% per annum and assuming AMP's
income tax rates then in effect for any given period remain unchanged) of tax
benefits which are reasonably certain of realization by AMP with respect to such
Losses in subsequent tax years.

                                   ARTICLE 13
                              CERTAIN DEFINITIONS
                              -------------------

     Except as otherwise provided herein, the capitalized terms set forth below
shall have the following meanings:

     "Accredited Investor" means a Person that is an "accredited investor"
within the meaning of the definition of "accredited investor" set forth in Rule
501 of Regulation D promulgated under the Securities Act.

     "Acquisition Proposal" shall mean any proposal or offer (in each case,
whether or not in writing and whether or not delivered to the stockholders of
IDX generally) to acquire in any manner, directly or indirectly, all or a
substantial portion of the assets of, or a greater than 20% equity interest in,
IDX or any of its Subsidiaries, whether by merger, tender offer, exchange offer,
sale of assets or similar transactions involving IDX or any Subsidiary, division
or operating or principal business unit of IDX, other than pursuant to the
transactions contemplated by this Agreement.

     "Affiliate" shall mean, with regard to any Person, (a) any Person, directly
or indirectly, controlled by, under common control of, or controlling such
Person, (b) any Person, directly or indirectly, in which such Person holds, of
record or beneficially, five percent or more of the equity or voting securities,
(c) any Person that holds, of record or beneficially, five percent or more of
the equity or voting securities of such Person, (d) any Person that, through
Contract, relationship or otherwise, exerts a substantial influence on the
management of such Person's affairs, (e) any Person that, through Contract,
relationship or otherwise, is influenced substantially in the management of
their affairs by such Person, or (f) any director, officer, partner or
individual holding a similar position in respect of such Person.

     "Affiliated Group" shall have the meaning set forth in Section 6.19(s).

     "Agreement" shall mean this Agreement and Plan of Merger.

     "AMP Material Adverse Effect" shall have the meaning set forth in Section
7.1.

     "AMP Common Stock" shall mean the common stock, $.01 par value, of AMP.

     "AMP Entities" shall mean AMP and all of its Subsidiaries and the AMP
Practices.

     "AMP" shall mean AmeriPath, Inc., a Delaware corporation

                                      64
<PAGE>

     "AMP Practice" means each entity with which AMP or any Subsidiary of AMP
has entered into a management services or similar agreement to provide medical
practice management or similar services (each an "AMP Practice", and together
the "AMP Practices")

     "Authority" shall mean any governmental, regulatory or administrative body,
agency, arbitrator or authority, any court or judicial authority, any public,
private or industry regulatory agency, arbitrator authority, whether
international, national, federal, state or local.

     "Average Trading Price" shall mean the average of the respective closing
prices of the AMP Common Stock on the Nasdaq Stock Market during the ten trading
days prior to the Closing Date, excluding after hours trading.

     "Claim" shall mean any action, claim, obligation, liability, expense,
lawsuit, demand, suit, inquiry, hearing, investigation, notice of a violation,
litigation, proceeding, arbitration, or other dispute, whether civil, criminal,
administrative or otherwise, whether pursuant to contractual obligations or
otherwise.

     "Closing Date" shall have the meaning set forth in Section 1.2.

     "Closing" shall mean the meaning set forth in Section 1.2.

     "Code" shall mean the Internal Revenue Code of 1986, as amended.

     "Company" means IDX

     "Company Agreements" shall have the meaning set forth in Section 6.13.

     "Company Benefit Plans" shall have the meaning set forth in Section 6.15.

     "Company Termination Fee" shall have the meaning set forth in Section 11.3.

     "Company Affiliation Agreement" shall have the meaning set forth in Section
6.6 hereof.

     "Company Entities" shall mean IDX and all of its Subsidiaries and the
Company Practices that are not Specified Practices.

     "Company Financial Statements" shall have the meaning set forth in Section
6.7.

     "Company Material Adverse Effect" shall have the meaning set forth in
Section 6.1.

     "Company Practice" shall have the meaning set forth in Section 6.6 hereof,
and includes the Specified Practices.

     "Convertible Holder" shall mean a holder of IDX Options or IDX Warrants.

     "Dissenting Stockholder" shall have the meaning set forth in Section 3.6
hereof.

     "DOJ" shall have the meaning set forth in Section 8.12.

     "DVD Transaction" shall mean IDX's acquisition of assets of .Delaware
Valley Dermatopathology, LLP, a Pennsylvania limited liability partnership
("DVD"), pursuant to an Asset

                                      65
<PAGE>

Purchase Agreement dated September 15, 2000, and the other transactions and
agreements entered into in connection therewith.

     "DVD" means Delaware Valley Dermatopathology, LLP, a Pennsylvania limited
liability partnership.

     "Effective Time" shall have the meaning set forth in Section 1.3.

     "Environmental Permits" shall have the meaning set forth in Section 6.17.

     "ERISA Affiliate" shall mean any trade or business, whether or not
incorporated, that together with the Company would be deemed a "single employer"
                                                                ---------------
within the meaning of Section 414(b), (c), (m) and (o) of the Code.

     "ERISA" shall mean the Employee Retirement Security Act of 1974, as
amended.

     "Escrow Agent" shall have the meaning set forth in Section 3.7.

     "Escrow Agreement" shall have the meaning set forth in Section 3.7.

     "Escrow Shares" shall have the meaning set forth in Section 3.7.

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

     "Exchange Fund" shall have the meaning set forth in Section 4.1.

     "Exchange Ratio" has the meaning set forth in Section 3.1.

     "FTC" shall have the meaning set forth in Section 8.12.

     "Government Programs" shall have the meaning set forth in Section 6.20.

     "HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.

     "IDX Common Stock" shall mean the Common Stock, $.01 par value, of IDX.

     "IDX Convertible Securities" shall mean the IDX Warrants and the IDX
Options.

     "IDX Options" shall mean the options listed on Schedule 6.5(a) that allow
                                                    ---------------
the holder thereof to purchase shares of IDX Common Stock.

     "IDX Shareholders' Meeting" shall have the meaning set forth in Section
5.1.

     "IDX Subsidiary" means all Subsidiaries of IDX

     "IDX Warrants" shall mean the warrants listed on Schedule 6.5(a) that allow
                                                      ---------------
the holder thereof to purchase shares of IDX Common Stock.

     "IDX" shall mean Pathology Consultants of America, Inc., a Tennessee
corporation, after giving effect to the June Merger Agreement.

                                      66
<PAGE>

     "Indemnitee" shall have the meaning set forth in Section 12.4.

     "Indemnitor" shall have the meaning set forth in Section 12.4.

     "Intellectual Property" shall mean all letters patent, patent applications,
inventions upon which patent applications have not yet been filed, trade names,
trademarks, trademark registrations and applications, service marks, service
mark registrations and applications, copyrights and copyright registrations and
applications, both domestic and foreign, owned, possessed or used by Borrower.

     "Investment Representation Letter" shall have the meaning set forth in the
Preamble of this Agreement.

     "June Merger Agreement" shall mean the Agreement and Plan of Merger, by and
among IDX, PCA Merger Corp, Pathsource, Inc. and the owners of Pathsource, Inc.,
dated as of May 31, 2000, which was consummated on June 30, 2000.

     "Knowledge" or "known," "to the knowledge of" or similar references shall
mean, (i) in the case of knowledge of a corporation or other entity (other than
in cases where clause (ii) of this definition applies), the actual knowledge of
any of the directors or officers of such entity (except that with respect to the
Company Entities, the term "directors and officers" for purposes of this
definition shall mean only the following persons:  Brian Carr, James Billington,
William Brownie, William McDowell, Haywood Cochrane, Dan Lufkin, Frederick
Bryant, Thomas Chesney, M.D., Robert Friedman, M.D., and Richard Jacoby, M.D.);
and such knowledge as any of such persons should have reasonably known; and (ii)
in the case of knowledge of any Company Entity with respect to the Specified
Practices, the actual knowledge of any of Brian C. Carr, James E. Billington or
William H. Brownie.

     "Liability" shall mean any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost or expense (including costs
of investigation, collection and defense), claim, deficiency, guaranty or
endorsement of or by any Person (other than endorsements of notes, bills,
checks, and drafts presented for collection or deposit in the ordinary course of
business) of any type, whether accrued, absolute or contingent, liquidated or
unliquidated, matured or unmatured, or otherwise.

     "Licenses" shall have the meaning set forth in Section 6.25.

     "Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance (including, without limitation, any
easement, right-of-way, zoning or similar restriction or title defect), lien
(statutory or other) or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC or comparable
law of any jurisdiction).

     "Medicare and Medicaid Programs" shall have the meaning set forth in
Section 6.20.

     "Merger Corp" shall mean AMP Merger Corp., a Tennessee corporation and a
wholly owned subsidiary of AMP.

     "Merger Documents" shall have the meaning set forth in Section 6.1.

     "Merger" shall have the meaning set forth in the Preamble of the Agreement.

                                      67
<PAGE>

     "Pathsource" shall mean Pathsource, Inc., prior to giving effect to the
June Merger Agreement.

     "PCA" shall mean Pathology Consultants of America, Inc., prior to giving
effect to the June Merger Agreement.

     "Permitted Liens" means mortgages, encumbrances, security interests or
liens of any nature whatsoever: (i) for taxes not yet due and payable, (ii)
imposed by law (including, without limitation, mechanics', materialmen's,
landlords', warehousemen's and carriers' liens) securing obligations incurred in
the ordinary course of business which are not past due, (iii) that are disclosed
in the Company Financial Statements, or (iv) that relate to immaterial
properties or assets.

     "Person" shall mean any corporation, partnership, joint venture, company,
syndicate, organization, association, trust, entity, joint stock company,
unincorporated organization, Authority or natural person.

     "Prior Transactions" shall mean all of the predecessor transactions,
whether pursuant to stock, asset or merger or similar transactions, which now
comprise the Company Entities.

     "Private Programs" shall have the meaning set forth in Section 6.20.

     "Proxy Statement" shall have the meaning set forth in Section 8.13.

     "Reimbursement Claims" shall have the meaning set forth in Section 12.2.

     "Remuneration" shall have the meaning set forth in Section 6.22.

     "Representative" shall mean any investment banker, financial advisor,
attorney, accountant, consultant, or other representative engaged by a Person.

     "SEC Reports" shall have the meaning set forth in Section 7.6.

     "SEC" shall mean the Securities and Exchange Commission.

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

     "Shareholders" shall mean the holders of the IDX Common Stock and the IDX
Convertible Securities.

     "Shareholders' Representative" means Questor Partners Fund, L.P. in its
capacity as the Shareholders' Representative under this Agreement and the Escrow
Agreement.

     "Signing Shareholders" shall mean the meaning set forth in the Preamble to
this Agreement.

     "Specified Practices" means the entities identified as "Specified
Practices" in the Schedules to Section 6.6 hereto.

     "Subsidiary" shall mean any Person of which a majority of the outstanding
voting or equity securities or other voting equity interests are owned, directly
or indirectly (but in the case of Subsidiaries of IDX, Subsidiary does not
include the following Company Practice which is owned by a nominee:  Institute
for Dermatopathology, P.C.; and in the case of Subsidiaries of AMP, Subsidiary
does not mean

                                      68
<PAGE>

any AMP Practice that is owned by a nominee or by a trust or which is a Texas
5.01(a) non-profit corporation).

     "Superior Proposal" shall mean any Acquisition Proposal that is a bona fide
offer made by a Person other than AMP, Merger Corp. or any of their respective
Affiliates to acquire, directly or indirectly, for consideration consisting of
cash and/or securities, more than fifty percent (50.0%) of the shares of IDX
Common Stock then outstanding, or all or substantially all the assets of the
Company Entities, and otherwise on terms which the Board of Directors of the
Company determines in good faith (based on consultation with its financial
adviser of nationally recognized reputation) to be (1) reasonably capable of
being completed (taking into account legal, financial, regulatory and other
aspects of the proposal and the person or entity making the proposal, including
the availability of financing therefor), and (2) more favorable to the Company's
stockholders than the transactions contemplated by this Agreement.

     "Tax Return" means any return, declaration, report, claim for refund or
information return or statement relating to Taxes, including any schedule or
attachment thereto and including any amendment thereof.

     "Tax" shall mean any Federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Section 59A of
the Code), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated or other tax of any kind whatsoever, including any interest,
penalty or addition thereto, whether disputed or not, and "Taxes" means any or
                                                           -----
all of the foregoing collectively.

     "TBCA" shall have the meaning set forth in Section 1.3.

     "Voting Agreement" shall have the meaning set forth in the Preamble of this
Agreement.

     "Voting Shareholders" shall mean the Signing Shareholders and any other
Shareholders holding shares of IDX Common Stock that sign and deliver a Voting
Agreement.

Any singular term in this Agreement shall be deemed to include the plural, and
any plural term the singular.  Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed followed by the
words "without limitation."

                                   ARTICLE 14
                           MISCELLANEOUS PROVISIONS
                           ------------------------

     14.1    Notices.
             -------

          (a) Any notice sent in accordance with the provisions of this Section
14.1 shall be deemed to have been received (even if delivery is refused or
unclaimed) on the date which is:  (i) the date of proper posting, if sent by
certified U.S. mail or by express U.S. mail or private overnight courier; or
(ii) the date on which sent, if sent by facsimile transmission, with
confirmation and with the original to be sent by certified U.S. mail, addressed
as follows:

                                      69
<PAGE>

          If to IDX:                Pathology Consultants of America, Inc.
                                    20 Burton Hills Boulevard, Suite 400
                                    Nashville, Tennessee 37215
                                    Telecopy Number: (615) 665-1157
                                    Attention: Mr. Brian C. Carr

          Copy to Counsel:          Alston & Bird LLP
                                    One Atlantic Center
                                    1201 W. Peachtree Street
                                    Atlanta, Georgia 30309
                                    Telecopy Number:  (404) 881-4777
                                    Attention:  Steven L. Pottle, Esq.

          If to AmeriPath:          AmeriPath, Inc.
                                    7289 Garden Road, Suite 200
                                    Riviera Beach, Florida 33404
                                    Attn:  James C. New, President

          Copy to Counsel:          Greenberg Traurig, P.A.
                                    515 East Las Olas Boulevard, Suite 1500
                                    Fort Lauderdale, Florida 33301
                                    Attn:  Daniel H. Aronson, Esq.

          If to the Shareholders'   c/o Questor Management Company
          Representative:           4000 Town Center, Suite 530
                                    Southfield, Michigan  48075
                                    Attn:  Frederick L. McDonald, II

          (b) Any party hereto may change its address specified for notices
herein by designating a new address by notice in accordance with this Section
14.1.

      14.2  Expenses.  Except as otherwise provided in this Agreement, each of
            --------
the parties hereto shall bear and pay all costs and expenses incurred by it or
on its behalf in connection with the transactions contemplated hereunder,
including any fees of brokers, finders investment bankers or other agents or
incurred to obtain a fairness opinion.

      14.3  Further Assurances.  Each party covenants that at any time, and
            ------------------
from time to time, after the Closing, it will execute such additional
instruments and take such actions as may be reasonably requested by the other
parties to confirm or perfect or otherwise to carry out the intent and purposes
of this Agreement.

      14.4  Waiver.  Any failure on the part of any party to comply with any
            ------
of its obligations, agreements or conditions hereunder may be waived by any
other party to whom such compliance is owed. No waiver of any provision of this
Agreement shall be deemed, or shall constitute, a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a continuing waiver.

      14.5  Assignment.  Merger Corp may assign its rights under this Agreement
            ----------
to any affiliated entity of AMP; otherwise, this Agreement shall not be
assignable by any of the parties hereto without the written consent of all other
parties.

                                      70

<PAGE>

      14.6  Binding Effect.  This Agreement shall be binding upon and inure to
            --------------
the benefit of the parties hereto and their respective heirs, legal
representatives, executors, administrators, successors and permitted assigns.
This Agreement shall survive the Closing and not be merged therein.

      14.7  Headings.  The headings contained in this Agreement are for
            --------
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

      14.8  Entire Agreement.  This Agreement and the Exhibits, Schedules,
            ----------------
certificates and other documents attached or delivered pursuant hereto or
incorporated herein by reference, and the Confidentiality Agreement, contain and
constitute the entire agreement among the parties and supersede and cancel any
prior agreements, representations, warranties, or communications, whether oral
or written, among the parties relating to the transactions contemplated by this
Agreement. Neither this Agreement nor any provision hereof may be changed,
waived, discharged or terminated orally, but only by an agreement in writing
signed by the party against whom or which the enforcement of such change,
waiver, discharge or termination is sought.

      14.9  Governing Law; Severability.  This Agreement shall be governed by
            ---------------------------
and construed in accordance with the Laws of the State of Delaware, without
regard to any applicable conflicts of Laws. The provisions of this Agreement are
severable and the invalidity of one or more of the provisions herein shall not
have any effect upon the validity or enforceability of any other provision.

     14.10  Counterparts.  This Agreement may be executed in one or more
            ------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     14.11  [intentionally omitted]
            -----------------------

     14.12  Schedules and Exhibits.  All Schedules and Exhibits attached to
            ----------------------
this Agreement are by reference made a part hereof.

     14.13  [intentionally omitted].
            -----------------------

     14.14  Enforcement of Agreement.  Except as otherwise provided herein,
            ------------------------
any and all remedies herein expressly conferred upon a party will be deemed
cumulative with and not exclusive of any other remedy conferred hereby, or by
law or equity upon such party, and the exercise by a party of any one remedy
will not preclude the exercise of any other remedy. The parties hereto agree
that money damages or other remedy at law would not be sufficient or adequate
remedy for any breach or violation of, or a default under, this Agreement by
them and that in addition to all other remedies available to the parties, each
party shall be entitled to the fullest extent permitted by law to an injunction
restraining such breach, violation or default or threatened breach, violation or
default and to any other equitable relief, including, without limitation,
specific performance, without bond or other security being required. In the
event that a court of competent jurisdiction shall determine that any provision
of this Agreement is invalid or more restrictive than permitted under the
governing law of such jurisdiction, or that any specified monetary remedy
(including without limitation any provision relating to liquidated damages) is
in an amount greater than permitted under the governing law of such
jurisdiction, then only as to enforcement of such provisions or remedy within
the jurisdiction of such court, such provision shall be interpreted and enforced
as if it provided for the maximum restriction or amount, as the case may be,
permitted under such governing law.

                         [signatures on following page]

                                      71
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have made and entered into this
Agreement as of the date first written above.

                             AMERIPATH, INC.

                             By:___________________________________________
                             Name:  James C. New
                             Title:  President and Chief Executive Officer

                             AMP MERGER CORP.

                             By:___________________________________________
                             Name:  Robert P. Wynn
                             Title:  President

                             PATHOLOGY CONSULTANTS OF AMERICA, INC.

                             By:___________________________________________
                             Name:  Brian C. Carr
                             Title:  Chief Executive Officer

                                      72
<PAGE>

                               LIST OF SCHEDULES

Schedule 2.3             -  Officers and Directors

Schedule 6.1(a)          -  Organization, Authority and Capacity

Schedule 6.3             -  Conflicting Agreements and Required Consents

Schedule 6.5(a)          -  Outstanding & Authorized Capitalization

Schedule 6.5(b)          -  IDX Subsidiaries

Schedule 6.6(a)          -  Affiliated Practices, Management and Affiliation
                            Contracts

Schedule 6.6(b)          -  Affiliated Practices, Management and Affiliation
                            Contracts

Schedule 6.6(c)          -  Subsidiaries of IDX & Specified Practices

Schedule 6.6(d)          -  Physicians Without Non Competes of at Least One Year

Schedule 6.7             -  Financial Statements

Schedule 6.8             -  Absence of Changes

Schedule 6.9             -  No Undisclosed Liabilities

Schedule 6.10            -  Litigation

Schedule 6.11            -  No Violation of Law

Schedule 6.12(a)         -  Real and Personal Property

Schedule 6.12(b)         -  Real Property Owned or Leased

Schedule 6.13            -  Contracts and Commitments

Schedule 6.14(a)         -  Employees, Directors and Officers for IDX and
                            Subsidiaries, Specified Practice Presidents

Schedule 6.14(b)         -  Employment and Labor Matters

Schedule 6.14(c)         -  Employment and Labor Matters

Schedule 6.15            -  Pension and Benefit Plans

Schedule 6.16            -  Insurance Policies

                                      73
<PAGE>

Schedule 6.16(b)         -  Denial of Insurance

Schedule 6.17            -  Environmental Matters

Schedule 6.18(a)         -  Accounts Receivable

Schedule 6.18(b)         -  Accounts Payable

Schedule 6.19(c)         -  Taxes

Schedule 6.19(g)         -  Taxes

Schedule 6.19(h)         -  Taxes

Schedule 6.19(i)         -  Taxes

Schedule 6.19(j)         -  Taxes

Schedule 6.19(l)         -  Taxes

Schedule 6.19(n)         -  Taxes

Schedule 6.19(p)         -  Taxes

Schedule 6.20(a)         -  Licenses, Authorizations and Provider Programs

Schedule 6.20(b)         -  Licenses, Permits and Authorizations

Schedule 6.20(c)         -  Filings and Reports

Schedule 6.21(a)         -  Inspection and Investigations

Schedule 6.21(b)         -  Compliance Program

Schedule 6.22            -  Certain Relationships

Schedule 6.23(a)         -  Health Care Laws and Regulations

Schedule 6.23(c)         -  Health Care Laws and Regulations

Schedule 6.23(d)         -  Health Care Laws and Regulations

Schedule 6.23(e)         -  Health Care Laws and Regulations

Schedule 6.23(f)         -  Health Care Laws and Regulations

Schedule 6.24            -  Interested Transactions

Schedule 6.25(a)         -  Intellectual Property

                                      74
<PAGE>

Schedule 6.25(b)         -  Intellectual Property Registrations

Schedule 6.25(c)         -  Computer Programs

Schedule 6.25(d)         -  Intellectual Property

Schedule 6.28            -  Opinion of Financial Advisor

Schedule 6.29            -  Signing Shareholders

Schedule 6.31            -  DVD Violations

Schedule 6.34            -  Brokerage

Schedule 7.3             -  Absence of Conflicting Agreements or Required
                            Consents

Schedule 7.5             -  Outstanding & Authorized Capitalization

Schedule 7.7             -  Absence of Changes

Schedule 7.8             -  Liabilities

Schedule 7.9             -  Violation of Law

Schedule 7.13            -  Litigation

Schedule 7.14            -  Inspections and Investigations

Schedule 7.15(a)         -  Health Care Laws and Regulations

Schedule 7.15(c)         -  Health Care Laws and Regulations

Schedule 7.15(e)         -  Health Care Laws and Regulations

Schedule 7.15(f)         -  Health Care Laws and Regulations

Schedule 8.4             -  Negative Covenants

Schedule 8.17               Closing Working Capital

                                      75
<PAGE>

                               LIST OF EXHIBITS

Exhibit A       -  Voting Agreement

Exhibit B       -  Investment Representation Letter

Exhibit C       -  [intentionally omitted]

Exhibit D       -  Escrow Agreement

Exhibit E       -  Affiliate Agreements

Exhibit F       -  Registration Rights Agreement

Exhibit G       -  Resignations and Releases

Exhibit H       -  IDX Counsel's Opinion

Exhibit I       -  Management Employment Agreements

Exhibit J       -  AMP Counsel's Opinion

                                      76

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.45
<SEQUENCE>3
<FILENAME>0003.txt
<TEXT>

                                                                   EXHIBIT 10.45

                                AMERIPATH, INC.

                     AMENDED AND RESTATED CREDIT AGREEMENT

                                Amendment No. 2
                                ---------------

     This agreement, dated as of November 29, 2000 (this "Agreement"), is
                                                          ---------
among AmeriPath, Inc., a Delaware corporation, its Subsidiaries set forth on the
signature pages hereof and Fleet National Bank (f/k/a BankBoston, N.A.), as
Agent for itself and the Required Lenders under the Credit Agreement (as defined
below).  The parties agree as follows:

     1.   Credit Agreement; Definitions.  This Agreement amends the Amended and
          -----------------------------
Restated Credit Agreement dated as of December 16, 1999 among the parties hereto
and the Lenders (as in effect prior to giving effect to this Agreement, the
"Credit Agreement").  Terms defined in the Credit Agreement as amended hereby
- -----------------
(the "Amended Credit Agreement") and not otherwise defined herein are used with
      ------------------------
the meaning so defined.

     2.   Amendment of Credit Agreement.  Effective upon the date hereof, the
          -----------------------------
Credit Agreement is amended as follows:

          2.1.   Amendment of Exhibit 1.  Exhibit 1 of the Credit Agreement is
                 ----------------------
     restated to read in its entirety as appears on Exhibit 1 to this Agreement.

          2.2.   Amendment of Section 6.5.3.  Section 6.5.3 of the Credit
                 --------------------------
     Agreement is amended to read in its entirety as follows:

          "6.5.3.  Consolidated Operating Cash Flow.  On the last day of each
                   --------------------------------
          fiscal quarter of the Borrower, Consolidated Operating Cash Flow for
          the period of four consecutive fiscal quarters then ending shall equal
          or exceed the percentage specified in the table below of the sum of
          (i) Consolidated Total Debt Service for such period minus (ii)
                                                              -----
          voluntary prepayments of the Loan:

          Period Ending                            Percentage
          -------------                            ----------

          Initial Closing Date through
          September 30, 2000                          125%

          December 31, 2000 through
          December 31, 2001                           120%

          March 31, 2002 through

                                      -1-
<PAGE>

          December 30, 2003                           130%

          December 31, 2003 and thereafter            145%

          Notwithstanding the foregoing, in calculating Consolidated Operating
          Cash Flow for purposes of this Section 6.5.3, for periods ending June
          30, 2000 through March 31, 2001, charges totaling $5,240,000 in
          connection with the impairment of assets and related charges for
          AmeriPath PCC, Inc. shall not be subtracted from Consolidated
          Operating Cash Flow.

          Notwithstanding the foregoing, in calculating Consolidated Operating
          Cash Flow for purposes of this Section 6.5.3, for the periods ending
          December 31, 2000 through December 31, 2001, charges of up to
          $17,500,000 (comprised of one time cash transaction and restructuring
          charges of up to $7,500,000 in connection with the acquisition of
          Pathology Consultants of America Inc., and nonrecurring non-cash
          charges of up to $10,000,000, including charges resulting from an
          increase in the accounts receivable reserve in connection with the
          acquisition of Pathology Consultants of America Inc., and potential
          unidentified impairment charges relating to good will and other
          intangibles of not more than $5,000,000) shall not be subtracted from
          Consolidated Operating Cash Flow."

          2.3.   Amendment to Section 6.6.7.  Section 6.6.7 of the Credit
                 --------------------------
     Agreement is amended to read in its entirety as follows:

          "6.6.7. To the extent permitted by Section 6.8.9, Indebtedness in
          respect of Capitalized Lease Obligations or secured by purchase money
          security interests;  provided, however, that the aggregate principal
                               -----------------
          amount of all Indebtedness permitted by this Section 6.6.7 at any one
          time outstanding shall not exceed $3,000,000."

          2.4.  Amendment to Section 6.21.2.  The first paragraph of Section
                ---------------------------
     6.21.2 of the Credit Agreement is amended to read in its entirety as
     follows:

          "Prior to and on December 31, 2001, in the case of any such
          acquisition for which the Purchase Price is greater than or equal to
          $5,000,000 and the Cash Purchase Price is less than $10,000,000, and
          after December 31, 2001, in the case of any such acquisition for which
          the Purchase Price is greater than or equal to $5,000,000 and the Cash
          Purchase Price is less than $20,000,000, the Borrower shall comply
          with all the requirements of Section 6.21.1, with the exception of
          6.21.1(f), and:"

          2.5. Amendment to Section 6.21.3.  Section 6.21.3 of the Credit
               ---------------------------
     Agreement is amended to read in its entirety as follows:

                                      -2-
<PAGE>

          "6.21.3 (A) Prior to and on December 31, 2001, in the case of any such
          acquisition for which the Cash Purchase Price is equal to or exceeds
          $10,000,000, in addition to meeting the requirements of Sections
          6.21.1 and 6.21.2 the Borrower shall receive prior written consent of
          the Required Lenders and provide all further documentation and meet
          all further requirements reasonably requested by the Agent.

          (B) After December 31, 2001, in the case of any such acquisition for
          which the Cash Purchase Price is equal to or exceeds $20,000,000, in
          addition to meeting the requirements of Sections 6.21.1 and 6.21.2 the
          Borrower shall receive prior written consent of the Required Lenders
          and provide all further documentation and meet all further
          requirements reasonably requested by the Agent."

          2.6.  Restatement of Exhibit 7.3. Exhibit 7.3 of the Credit Agreement
                --------------------------
     is restated to read in its entirety as appears on Exhibit 7.3 to this
     Agreement.

     3.   Representation and Warranty.  In order to induce the Agent to enter
          ---------------------------
into this Agreement, each of the Borrower and the Guarantors jointly and
severally represents and warrants that, after giving effect to this Agreement,
no Default exists.

     4.   Payment of Fees.  Upon or prior to the effectiveness of this
          ---------------
Agreement, the Borrower agrees to pay the Agent (a) for the account of each
Lender which has returned a duly executed counterpart of this Amendment by noon
on November 29, 2000, an amendment fee of 0.175 percent (0.175%) of such
Lender's Percentage Interest in the Maximum Amount of Revolving Credit, and (b)
reasonable legal fees and expenses of the Agent with respect to this Agreement
and the transactions contemplated hereby.

     5.   General.    The Amended Credit Agreement and all of the Credit
          -------
Documents are each confirmed as being in full force and effect.  This Agreement,
the Amended Credit Agreement and the other Credit Documents referred to herein
or therein constitute the entire understanding of the parties with respect to
the subject matter hereof and thereof and supersede all prior and current
understandings and agreements, whether written or oral.  Each of this Agreement
and the Amended Credit Agreement is a Credit Document and may be executed in any
number of counterparts, which together shall constitute one instrument, and
shall bind and inure to the benefit of the parties and their respective
successors and assigns, including as such successors and assigns all holders of
any Credit Obligation.  This Agreement shall be governed by and construed in
accordance with the laws (other than the conflict of law rules) of The
Commonwealth of Massachusetts.

                                      -3-
<PAGE>

     Each of the undersigned has caused this Agreement to be executed and
delivered by its duly authorized officer as an agreement under seal as of the
date first written above.

                              AMERIPATH, INC.

                              By _______________________________
                                  Name:
                                  Title:

                                      -4-
<PAGE>

                    The Guarantors
                    --------------

                    AMERIPATH ALABAMA, INC.
                    SHOALS PATHOLOGY ASSOCIATES, INC.
                    AMERIPATH FLORIDA, INC.
                    LABORATORY PHYSICIANS, JACKSONVILLE, INC.
                    PASADENA PATHOLOGY EDWARD K MILLER, M.D., INC.
                    SOUTH FLORIDA PATHOLOGY ASSOCIATES, INC.
                    HIALEAH PATHOLOGY ASSOCIATES, INC.
                    OCMULGEE MEDICAL PATHOLOGY ASSOCIATION, INC.
                    AMERIPATH INDIANA, INC.
                    AMERIPATH KENTUCKY, INC.
                    AMERIPATH MICHIGAN, INC.
                    AMERIPATH MISSISSIPPI, INC.
                    R.M.C. PATHOLOGY ASSOCIATES, INC.
                    AMERIPATH NEW YORK, INC.
                    AMERIPATH NORTH CAROLINA, INC.
                    AMERIPATH OHIO, INC.
                    AMERIPATH CINCINNATI, INC.
                    AMERIPATH CLEVELAND, INC.
                    AMERIPATH P.C.C., INC.
                    AMERIPATH YOUNGSTOWN, INC.
                    AMERIPATH YOUNGSTOWN LABS, INC.
                    A. BERNARD ACKERMAN, M.D. DERMATOPATHOLOGY, P.C.
                    AMERIPATH PENNSYLVANIA, INC.
                    AMERIPATH PHILADELPHIA, INC.
                    AMERIPATH 5.01(a) CORPORATION
                    DFW 5.01(a) CORPORATION
                    AMERIPATH SAN ANTONIO 5.01(a) CORPORATION
                    AMERIPATH LUBBOCK 5.01(a) CORPORATION
                    AMERIPATH TEXAS, INC.
                    AMERIPATH SHERMAN, INC.
                    PATHOLOGY AFFILIATED SERVICES, INC.
                    PLAZA PATHOLOGY, INC.
                    AMERIPATH PAT, INC.
                    AMERIPATH WISCONSIN, INC.


                    By  __________________________________
                           Name:
                           As an authorized officer of each of the
                        foregoing corporations

                                      -5-
<PAGE>

                              FLEET NATIONAL BANK,
                                as Agent under the Credit Agreement

                              By  _________________________________
                                  Name:
                                  Title:

                              FLEET NATIONAL BANK,
                                as Lender under the Credit Agreement

                              By _________________________________
                                  Name:
                                  Title:

                                      -6-
<PAGE>

                              The foregoing amendment is approved by the
                              Required Lenders signing below:

                              Bank of America, N.A.

                              By  _______________________________
                                  Name:
                                  Title:

                              Bank One, NA

                              By  _____________________________
                                  Name:
                                  Title:

                                      -7-
<PAGE>

                              First Union National Bank

                              By  _______________________________
                                  Name:
                                  Title:

                              Citizens Bank of Massachusetts (as successor to
                              USTrust)

                              By  _______________________________
                                  Name:
                                  Title:

                              Bank Austria Creditanstalt
                                  Corporate Finance, Inc.

                              By  _______________________________
                                  Name:
                                  Title:

                              By  _______________________________
                                  Name:
                                  Title:

                              SunTrust Bank, Central Florida, National
                              Association

                              By  _______________________________
                                  Name:
                                  Title:

                              U.S. Bank National Association

                              By  _______________________________
                                  Name:
                                  Title:

                                      -8-
<PAGE>

                              AmSouth Bank

                              By  _______________________________
                                  Name:
                                  Title:

                                      -9-
<PAGE>

                              Imperial Bank

                              By  _______________________________
                                  Name:
                                  Title:

                              BankAtlantic

                              By  _______________________________
                                  Name:
                                  Title:

                                      -10-
<PAGE>

                                   Exhibit 1
                                   ---------

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
                   Ratio of Consolidated Total Debt to
                   Consolidated Adjusted EBITDA for the most    Interest Rate on Portions of Revolving Loan
Levels             recently completed four fiscal quarters      Subject to LIBOR Pricing Option
- ----------------------------------------------------------------------------------------------------------------
<S>                <C>                                          <C>
Level I            Equal to or greater than 2.5 to 1            LIBOR Rate plus 2.25%
                                                                           ----
- ----------------------------------------------------------------------------------------------------------------
Level II           Equal to or greater than 2.0 to 1 but less
                   than or equal to 2.5 to 1                    LIBOR Rate plus 2.00%
                                                                           ----
- ----------------------------------------------------------------------------------------------------------------
Level III          Less than or equal to 2.0 to 1               LIBOR Rate plus 1.75%
                                                                           ----
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
                   Interest Rate on Portions of Revolving
                   Loan Not Subject to LIBOR Pricing
Levels             Option                                        Applicable Commitment Fee Rate
- ----------------------------------------------------------------------------------------------------------------
<S>                 <C>                                          <C>
Level I             Base Rate plus 1.00%                         0.50%
                              ----
- ----------------------------------------------------------------------------------------------------------------
Level II            Base Rate plus 0.75%                         0.50%
                              ----
- ----------------------------------------------------------------------------------------------------------------
Level III           Base Rate plus 0.50%                         0.375%
                              ----
- ----------------------------------------------------------------------------------------------------------------
</TABLE>

                                      -11-
<PAGE>

                                                                     EXHIBIT 7.3

                       AMERIPATH, INC. AND SUBSIDIARIES
                   Financing Debt, Certain Investments, Etc.

(a) Financing Debt:

The following financing debt agreements are in place, as more fully described in
the Notes to the Obligor's audited financial statements:

     Long-term debt consisted of the following (Amounts in thousands):

<TABLE>
<CAPTION>
                                              Proforma with
                                                Inform DX                      AmeriPath
                                               September 30,    InformDX     September 30,       December 31,
                                             -----------------   Assumed    --------------  --------------------
                                                    2000           Debt           2000       1999           1998
                                                    ----         See Note 1       ----       ----           ----
<S>                                          <C>                 <C>         <C>             <C>        <C>
Credit Facility:
Revolving loan                                    $184,721         $ 7,900        $176,821   $163,300   $121,087
Capitalized lease obligations                          730             532             198        259        118
Subordinated notes issued and
  assumed in connection with
  acquisitions, payable in varying
  amounts through 2005, with interest
  at rates between 6.5% and 9.75%                    4,019           3,331             688      1,057      2,303
                                                  --------         -------        --------   --------   --------
                                                  $189,470         $11,763        $177,707   $164,616   $123,508
     Less Current Portion                           (1,161)           (386)           (775)      (539)    (1,315)
                                                  --------         -------        --------   --------   --------
Long term debt, net of current portion            $188,309         $11,377        $176,932   $164,077   $122,193
                                                  ========         =======        ========   ========   ========
</TABLE>

At September 30, 2000, maturities of long-term debt were as follows:

               2001                                    $   1,161
               2002                                          488
               2003                                        8,340
               2004                                      177,050
               2005                                        2,431
                                                       ---------

               Total                                   $ 189,470
                                                       =========

Bank of America, N.A. (or its predecessor, NationsBank, N.A.), has issued the
following:

1.   Letter of Credit No. 972689, dated August 6, 1998, in the amount of
$500,000, issued in favor of Knight Ridge Properties for the account of
Pathology Group of the Mid-South, P.C., expiring March 15, 2001.

2.   Letter of Credit No. 999075, dated December 20, 1998, in the amount of
$17,721.54, issued in favor of Geotechnics Incorporated for the account of
California Pathology Consultants of America, expiring December 1, 2001.

3.   Letter of Credit No. 3019144, dated September 23, 1999, in the amount of
$257,143, issued in favor of WSA Fraternal Life for the account of Colorado
Pathology Consultants, P.C., expiring one (1) year after the date of issuance,
with automatic renewal.

                                      -12-
<PAGE>

                                                                     EXHIBIT 7.3

(b) Liens and Guarantees

  None

Note 1
Assumed subordinated notes include the following (in thousands):

<TABLE>
     <S>                                                                    <C>
     PCA of Columbus - subordinated, non-contingent debt                    $  848
     TID Acquisition Corp. - subordinated, non-contingent debt               2,419
     Columbus Pathology Association. - subordinated, non-contingent debt        64
                                                                            ------
     Total                                                                  $3,331
                                                                            ======
</TABLE>

These amounts agree to the September 30, 2000 Inform DX financial statements and
do not include contingent note obligations, which do not appear on the balance
sheet.

(c) Agreements Requiring Obligors to Make An Investment

As of September 30, 2000 the Obligor had issued non-binding, letters of intent,
subject to the completion of due diligence and upon entering into a more
definitive agreement of sale and other matters, to acquire the capital stock (or
assets) of certain entities.  These non-binding letters of intent do not
constitute agreements requiring the Obligor to make an investment.

Subsequent to September 30, 2000, the Obligor made an investment in varying
amounts of cash, common stock and subordinated contingent notes (noted
parenthetically) in the following entity:

NONE

                                      -13-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.46
<SEQUENCE>4
<FILENAME>0004.txt
<TEXT>

                                                                   EXHIBIT 10.46

                         REGISTRATION RIGHTS AGREEMENT

     THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is made and entered into
as of November 30, 2000, among AMERIPATH, INC., a Delaware corporation (the
"Company"), the "Holders" (as defined below) of the Company's common stock that
have executed this Agreement, and the "Representative" (as defined below) of the
Holders.

                                    RECITALS

     A.   The Company is contemporaneously herewith obligated to issue and
deliver to the former shareholders and warrant holders (the "PCA Shareholders")
of Pathology Consultants of America, Inc., a Tennessee corporation ("PCA"),
shares (the "Restricted Shares") of the Company's common stock, par value $.01
per share (the "Common Stock"), pursuant to the terms, as the case may be, of
(i) Section 3.1(b) of that certain Agreement and Plan of Merger, dated as of
November 7, 2000 (the "Merger Agreement"), among the Company, AMP Merger Corp.,
a Tennessee corporation, and PCA, and (ii) the "IDX Warrants" as provided in
Section 3.5(c) of the Merger Agreement.  Pursuant to the Merger Agreement, a
portion of the Restricted Shares (the "Escrow Shares") will be held and
disbursed by the Escrow Agent pursuant to the Escrow Agreement.  Capitalized
terms used in this Agreement and which are not defined herein shall have the
same meanings ascribed thereto in the Merger Agreement.

     B.   The term "Holders" as used in this Agreement, means those PCA
Shareholders that have executed and delivered this Agreement to the Company.

     C.   As contemplated by the Merger Agreement, the Company has agreed herein
to provide to the Holders certain registration rights with respect to a portion
of the Restricted Shares.

                                   AGREEMENT

     NOW, THEREFORE, in consideration of the premises and covenants set forth in
the Merger Agreement, the parties agree as follows:

     1.   Registration Rights.
          --------------------

          (a) Filing of Registration Statement.  Subject to the limitations and
              ---------------------------------
other terms set forth in this Agreement, the Company shall prepare and file, as
early as April 1, 2001 and no later than April 20, 2001, a registration
statement under the Securities Act of 1933, as amended (the "Securities Act"),
to register for discretionary sales by the respective Holders for cash from time
to time, one-third of each Holder's Restricted Shares (the "Registration
Shares"); subject, however, in the case of Restricted Shares not then
outstanding but subject to issuance under the IDX Warrants, to any requirements
of the SEC or the Securities Act which require that such shares be issued and
outstanding prior to filing of the registration statement with respect thereto,
in which case the Company shall give prior notice of such requirement to the
holders of the IDX Warrants not later than March 1, 2001.  The registration
statement shall be on Form S-3 if the Company is then eligible to use Form S-3
to conduct the registration of such sales of outstanding Registration Shares,
and if Form S-3 is not then available to conduct such registration, then the
registration statement shall be on Form S-1 or such other Form (as reasonably
<PAGE>

determined by the Company) as may then be permissible for the Company to cause
the registration of such sales of Restricted Shares (such registration
statement, on whatever Form it is filed, is sometimes referred to herein as the
"Registration Statement").  The Company shall use commercially reasonable best
efforts to cause such registration statement to promptly become effective under
the Securities Act and to remain effective until the first anniversary of the
Closing of the Merger Agreement (the "Registration Period"), subject, however,
to the terms of this Agreement.  The Company's obligation to register any
Holder's Restricted Shares under this Agreement is further subject to the other
provisions of this Section 1 and the other terms of this Agreement, as well as
applicable requirements of the Securities Act.

          (b) Certain Disclosures in Registration Statement.  Unless the Company
              ----------------------------------------------
is advised otherwise in writing by any Holder (with respect to such Holder), the
Company may assume and rely on the following information (and the Registration
Statement may reflect such information):  (i) that the name of each Holder is
the name in which such Holder's Restricted Shares are registered in the
Company's stock records, and (ii) the Holder does not own (beneficially or of
record) any shares of Common Stock other than the Holder's Restricted Shares,
except for beneficial ownership thereof pursuant to any of the Holder's stock
options or warrants to purchase Common Stock reflected in the Merger Agreement
(the definition of "beneficial ownership" for purposes of this clause (ii)
includes the definitions set forth in Rule 13d-3 under the Securities Exchange
Act of 1934, as amended).  Each Holder hereby agrees (i) to promptly notify the
Company in writing if at any time any of the foregoing statements about the
Holder are not true and provide to the Company the necessary information and
qualifications to correct such statements, and (ii) to provide any other
information that the Company may request regarding such Holder that is required
by the Securities Act and the rules and regulations thereunder to be included in
the Registration Statement.

          (c) Optional Underwritten Offering By The Company.  At the option of
              ----------------------------------------------
the Company, to be exercised by the Company's written notice to the
Representative no later than April 15, 2001, the Company may offer to include
any one or more Holder's Registration Shares (or portion thereof) in a "firm
commitment" underwritten public offering of shares of Common Stock to be
conducted by the Company and registered pursuant to a registration statement on
appropriate Form filed with the Commission.  If any Holder accepts such offer,
such Holder's Registration Shares (or portion thereof) shall be included in such
registration statement instead of the registration statement contemplated under
Section 1(a) of this Agreement, and the Company shall use its commercially
reasonable best efforts to cause such registration statement for the
underwritten offering to be filed no later than May 15 2001, subject however to
the other terms of this Agreement.  If the managing underwriter advises the
Company that the inclusion of all Registration Shares proposed to be included in
the underwritten public offering, together with other shares of Common Stock
proposed to be offered for the account of the Company to be included therein
(the "Other Shares") would, in the managing underwriter's reasonable judgment,
jeopardize the success of the underwritten offering, then (i) the Company shall
be required to permit in the offering (in addition to the Other Shares) only
that number of Registration Shares that the managing underwriter reasonably
believes will not jeopardize the success of the Company's offering (and such
Registration Shares shall be allocated pro rata among the Holders participating
in the offering based upon the number of each Holder's Registration Shares
proposed to be included in the Registration Statement), and (ii) with respect to
the number of Registration Shares so excluded from the underwritten offering
(the "Excluded Shares"), within 10 days following the determination of such
Excluded Shares the Company shall either amend the Registration Statement filed
under Section 1(a) or file a new Registration Statement covering the resale of
such Excluded Shares in the manner provided in Sections 1(a) and 1(b) of this
Agreement.

          Each Holder hereby agrees that if the Company at any time during the
Registration Period commences an underwritten public offering registered under
the Securities Act, whether as

                                       2
<PAGE>

contemplated under this Section 1(c) or otherwise, then the Holders (and all
Restricted Shares held by all Holders which are not included in the underwritten
public offering and all other shares of Common Stock owned by the Holders) shall
be, if and to the extent requested by the managing underwriter, subject to
customary underwriter "lock-up" arrangements and not sold or otherwise
transferred by the Holders for a period which the managing underwriter of the
offering reasonably determines as necessary in order to effect the underwritten
public offering, but not for more than 90 days following the closing of the
offering. The Company shall not be required to include any Holder's Registration
Shares in such underwriting unless such Holder agrees to accept the offering on
the same terms and conditions as the shares of Common Stock otherwise being sold
through the underwriters under such registration. The managing underwriter of
the offering shall be selected by the Company. The Company shall be entitled to
postpone (upon written notice to the Representative) for up to sixty days the
filing or the effectiveness of the registration statement in respect of the
underwritten offering if the Company's Board of Directors determines in good
faith and in its reasonable judgment that effecting such offering would have a
material adverse affect on any proposal or plan by the Company to engage in any
material acquisition or disposition of assets or any material merger,
consolidation, tender offer or other similar transaction.

     (d)  Other Registration Requirements.
          -------------------------------

          (i)   Notwithstanding any provision of this Agreement to the contrary,
a Holder may not include any Restricted Shares in any registration statement
required or contemplated under this Agreement unless the Holder timely delivers
to the Company all information required to be disclosed in the registration
statement about such Holder and his shares of Common Stock.

          (ii)  Notwithstanding any provision of this Agreement to the contrary,
a Holder may not include any Restricted Shares in any underwritten offering
required or contemplated under this Agreement unless the Holder timely executes
and delivers the form of underwriting agreement, custody agreement, power of
attorney and other agreements and instruments in customary form reasonably
required by the underwriters of such offering in connection with the preparation
and consummation of such offering.

          (iii) Notwithstanding any provision of this Agreement to the
contrary, in no event shall the Company be required to register the sale of any
Restricted Shares to the extent that the sale of such shares is then prohibited
by any "Affiliate Agreement" entered into by the Holder pursuant to Section 8.14
of the Merger Agreement (but upon the expiration of such sale restrictions, the
Company will amend the Registration Statement under Section 1(a) to include any
Holder's Registration Shares that were not included therein by reason of this
clause (iii), subject to the other terms of this Agreement).

          (iv)  Notwithstanding any provision of this Agreement to the contrary,
in no event shall the Company be required to file or to cause to become or
remain effective, any registration statement or any post-effective amendment to
any registration statement covering any Restricted Shares subsequent to the
first anniversary of the Closing of the Merger Agreement, and following such
time the Company may take steps to withdraw any such registration from the
Commission; and each Holder agrees that such Holder shall cease to make any
sales pursuant any registration statement under this Agreement subsequent to the
first anniversary of the Closing of the Merger Agreement.

     2.   Certain Registration Procedures.  If the Company is required by the
          --------------------------------
provisions of Section 1 to effect the registration of any Restricted Shares
under the Securities Act, the Company will:

          (a) prepare and file with the Securities and Exchange Commission (the
"Commission") such amendments and supplements to such registration statement and
the prospectus used

                                       3
<PAGE>

in connection therewith as may be necessary to keep such registration statement
effective for the period required hereunder and to comply with the provisions of
the Securities Act applicable to the Company with respect to the sale or other
disposition of the securities covered by such registration statement;

          (b) furnish to any participating Holders (by delivery to the
Representative) such number of copies of the prospectus contained in the
registration statement, including a preliminary prospectus, in conformity with
the requirements of the Securities Act, as the Representative may reasonably
request;

          (c) use its commercially reasonable best efforts to register or
qualify the securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions within the United States as
the Representative shall reasonably request, if the proposed offering is not
otherwise exempt in such jurisdictions (provided, however, that the Company
shall not be obligated to qualify as a foreign corporation to do business under
the laws of any jurisdiction in which it is not then qualified or to file any
general consent to service or process or to qualify as a broker or dealer in
securities), and do such other reasonable acts and things as may be required of
it to enable the participating Holders to consummate the disposition in such
jurisdiction of the securities covered by such registration statement; and

          (d) promptly notify in writing the Representative (who shall promptly
notify the Holders) and each underwriter of the happening of any event, during
the period of distribution, as a result of which the registration statement
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing (in which case, the
Company shall promptly provide the Holders (by delivery to the Representative)
and/or the underwriters, as appropriate, with revised or supplemental
prospectuses; and each Holder hereby agrees that, if so requested by the Company
in writing, each Holder shall promptly cease making any offers or sales of the
Restricted Shares until receipt and distribution of such revised or supplemental
prospectuses).

     3.   Expenses.  All expenses incurred by the Company in complying with this
          ---------
Agreement, including, without limitation, all registration and filing fees
(including expenses incident to filing with the NASD), printing expenses, fees
and disbursements of counsel for the Company, expenses of any special audits
incident to or required by any such registration, and expenses (including
attorneys' fees) of complying with the securities or blue sky laws of any
jurisdictions, shall be paid by the Company. The Company shall not be liable for
any fees, discounts or commissions to any underwriter or any fees or
disbursements of counsel for Holders in respect of the securities sold by
Holders, which amounts shall be paid by the Holders.

     4.   Indemnification.
          ----------------

          (a) In the event of a registration of any of the Restricted Shares
under the Securities Act pursuant to this Agreement, the Company will indemnify
and hold harmless each seller of such Restricted Shares thereunder, each
underwriter of such Restricted Shares thereunder and each other person, if any,
who controls such seller or underwriter within the meaning of Section 15 of the
Securities Act, from and against any losses, claims, damages or liabilities,
joint or several, to which such seller, underwriter or controlling person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in any registration statement under which such Restricted Shares
were registered under the Securities Act, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereof, or arise
out of or are

                                       4
<PAGE>

based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violations by the Company of applicable federal or state
securities laws relating to such registration, provided, however, that the
Company will not be liable to a seller, underwriter or controlling person in any
such case if and to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or an omission or alleged omission so made in reliance upon and in conformity
with information furnished in writing by any such seller, any such underwriter
or any such controlling person specifically for use in such registration
statement or prospectus (including, without limitation, the information provided
in or pursuant to Section 1(b) hereof), and, provided further, however, that the
Company will not be liable to a holder or other such party in any such case to
the extent that any such loss, claim, damage, liability or action arises out of
or is based upon an untrue or alleged untrue statement or omission or an alleged
omission made in any preliminary prospectus or final prospectus if (1) such
holder or other person failed to send or deliver a copy of the final prospectus
or prospectus supplement or amended prospectus with or prior to the delivery of
written confirmation of the sale of the Restricted Shares, and (2) the final
prospectus or prospectus supplement or amended prospectus would have corrected
such untrue statement or omission.

          (b) In the event of a registration of any of the Restricted Shares
under the Securities Act pursuant to this Agreement, each Holder of such
Restricted Shares, severally and not jointly, will indemnify and hold harmless
the Company, each person, if any, who controls the Company within the meaning of
the Securities Act, each officer and director of the Company, and each
underwriter and each person who controls any underwriter within the meaning of
the Securities Act, against all losses, claims, damages or liabilities, joint or
several, to which the Company or such officer, director, underwriter or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement under
which such Restricted Shares were registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided, however, that
such Holder will be liable hereunder in any such case if and only to the extent
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with information furnished in writing to
the Company by such Holder specifically for use in such registration statement
or prospectus (including, without limitation, the information provided in or
pursuant to Section 1(b) hereof), and provided, further, however, that the
liability of such Holder hereunder shall be limited to the amount of gross
proceeds received by such Holder from sales of Restricted Shares in connection
with such registration.

          (c) Promptly after receipt by an indemnified party hereunder of notice
of the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability that it may have to
such indemnified party under this Section 4 except and only to the extent the
indemnifying party is prejudiced by such omission.  In case any such action
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel reasonably satisfactory to such
indemnified party, and, after notice from the indemnifying party to such
indemnified party of its election so to assume and undertake the defense
thereof, the indemnifying party shall not be liable to such indemnified party
under this Section 4 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof; provided, however,
that, if the

                                       5
<PAGE>

defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
(based on the advice of counsel) that there may be reasonable defenses available
to it which are materially different from those available to the indemnifying
party or if the interests of the indemnified party reasonably may be deemed to
materially conflict with the interests of the indemnifying party, the
indemnified party shall have the right to select a separate counsel and to
assume such legal defenses and otherwise to participate in the defense of such
action, with the expenses and fees of one attorney constituting such separate
counsel and other expenses related to such participation to be reimbursed by the
indemnifying party for the portion of such fees and expenses that are reasonably
related to the matters for which the indemnified party is indemnified under this
Section 4; it being agreed, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially similar or
related actions relating to one or more indemnified parties in the same
jurisdictions arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one attorney at any time for all
such indemnified parties.

          (d) No indemnifying party shall, without the prior written consent of
the indemnified party (which shall not be unreasonably withheld), effect any
settlement of any pending or threatened action, suit or proceeding in respect of
which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such action, suit or proceeding. An
indemnified party will not consent to the entry of any judgment or enter into
any settlement with respect to any claim for which it is indemnified hereunder
without the prior written consent of indemnitor (not to be withheld
unreasonably), and, except as permitted otherwise in the first sentence of this
paragraph, the indemnitor will not consent to the entry of any judgment or enter
into any settlement with respect to any claim indemnified by it hereunder
without the prior written consent of indemnified party (not be withheld
unreasonably).

     5.   Certain Limitations on Registration Rights.  The Company's obligations
          -------------------------------------------
under Section 1 with respect to each Holder are expressly conditioned upon (i)
such Holder furnishing to the Company in writing such information concerning
such Holder and such Holder's controlling persons and the terms of such Holder's
proposed offering of Restricted Shares as the Company or the managing
underwriter shall reasonably request for inclusion in the applicable
registration statement; and (ii) the Holder's completion, execution and delivery
to the Company (if not already done) of the Investment Representation Letter
attached as an Exhibit to the Merger Agreement.  Each Holder hereby confirms and
agrees that the rights of the Holder provided in this Agreement supercede and
replace any such Holder's rights to require that any registration statement be
filed by, or to participate in any registered offering pursuant to a
registration statement filed by, the Company or any subsidiary of the Company
(including without limitation, PCA), and that any such other registration rights
are waived and terminated.

     6.   Securities Compliance.
          ----------------------

          No Holder shall sell or otherwise transfer any shares of Common Stock
at any time if such transfer would constitute a violation of (i) any federal or
state securities or "blue sky" laws, rules or regulations, or (ii) a breach by
the Holder of this Agreement or any other agreement to which the Company is a
party.

     7.   Appointment of Representative for Holders.  Each Holder hereby
          ------------------------------------------
designates Questor Partners Fund, L.P. as such Holder's representative and
attorney-in-fact (the "Representative") for all purposes in connection with this
Registration Rights Agreement and the "Escrow Agreement" contemplated in the
Merger Agreement and as contemplated therein, including without limitation, (i)
taking all action necessary in connection with the indemnification obligations
of PCA under the Merger

                                       6
<PAGE>

Agreement and the Escrow Agreement (and including as applicable to shares of the
Company's Common Stock as to which the Escrow Agreement applies), including the
defense or settlement of any claims and the making of terminations of shares or
payments with respect thereto, (ii) giving and receiving on behalf of the Holder
all notices required or permitted to be given under the Escrow Agreement and the
Registration Rights Agreement and otherwise acting for and on behalf of the
Holder as provided or contemplated in such agreements, (iii) executing the
Escrow Agreement as attorney-in-fact for and on behalf of the Holder and the
other PCA Shareholders, and (iv) taking any and all additional action as is
contemplated, necessary or appropriate to be taken by or on behalf of the Holder
by the "Representative" pursuant to the Escrow Agreement or this Registration
Rights Agreement. Any such action taken by the Representative shall be valid and
binding on the Holder. The Holder also appoints the Representative as the
Holder's custodian and attorney-in-fact to act for the Holder in connection with
the Escrow Agreement arrangements as contemplated by the terms of the Merger
Agreement and the Escrow Agreement. It is agreed by the Holder that the shares
of the Company's Common Stock to be held in custody by the Escrow Agent under
the Escrow Agreement (the "Escrow Stock") will be subject to the interests of
the Company and the Representative pursuant to the terms of the Escrow Agreement
and the Merger Agreement; that the arrangements made by Holder hereunder and
thereunder are irrevocable; and that the obligations of Holder hereunder shall
not be terminated by any acts of Holder, or by operation of law, whether by the
death or incapacity of Holder or the occurrence of any other event; and if any
such death, incapacity or any other such event shall occur after the execution
of this Agreement, the Representative is nevertheless authorized and directed to
hold and dispose of the Escrow Stock (and to instruct the Escrow Agent to hold
and dispose of the Escrow Stock) in accordance with the terms and conditions of
the Merger Agreement and the Escrow Agreement as if such death, incapacity or
other event had not occurred, regardless of whether or not the Representative
shall have received notice of such death, incapacity or other event. The
designation by the Holder hereby of the Representative may not be revoked
without the written consent of the Company. The Holder hereby consents to and
agrees with the terms of (i) the Escrow Agreement, including without limitation
the terms of Article 7 of the Escrow Agreement, and (ii) Sections 3.7 and 8.17
of the Merger Agreement. The parties to this Agreement agree that any successor
Representative appointed under the Escrow Agreement shall be the Representative
under this Agreement.

     All decisions and actions by the Representative taken pursuant to the terms
of the Escrow Agreement or this Agreement, including without limitation any
agreement made between the Representative and the Company or the Escrow Agent
relating to indemnification obligations and procedures under the Merger
Agreement and the Escrow Agreement, including the defense or settlement of any
claims and the making of payments with respect hereto, shall be binding upon the
Holder, and the Holder shall have no right to object, dissent, protest or
otherwise contest the same.  The Representative shall incur no liability to the
Holder with respect to any action taken or suffered by the Representative in
reliance upon any notice, direction, instruction, consent, statement or other
documents believed by him to be genuinely and duly authorized, nor for any other
action or inaction with respect to the indemnification obligations of PCA to
which the Escrow Stock shall be subject under the Merger Agreement and the
Escrow Agreement, including the defense or settlement of any claims and the
making of cancellations of Escrow Stock or payments with respect thereto, except
to the extent resulting from the Representative's own willful misconduct or
gross negligence.  The Representative may, in all questions arising under the
Merger Agreement or the Escrow Agreement or the Registration Rights Agreement,
rely on the advice of counsel, and for anything done, omitted or suffered in
good faith by the Representative shall not be liable to the Holder.

     The Holder acknowledges and agrees that the Representative may incur costs
and expenses on behalf of the Holder and other former shareholders of PCA in his
capacity as Representative under this Agreement and the Escrow Agreement
("Representative Expenses").  The Holder agrees to pay the

                                       7
<PAGE>

Representative, promptly upon demand by the Representative therefor, such
Holder's proportionate share of any Representative Expenses.

     8.   Termination of Certain Stock Agreements.  Each Holder that is a party
          ---------------------------------------
to any of the following referenced agreements hereby consents and agrees to the
termination of such agreements:  (i) the Investor Stockholder Agreement dated
June 30 2000 among PCA, ABS Capital Partners II, L.P., Union Street Partners,
L.P., James Shapiro, Questor Partners Fund, L.P., Questor Side-By-Side Partners,
L.P., and certain other parties including certain stockholders of PCA, and (ii)
all "Stock Agreements" listed in Schedule 6.13 or other Schedules to the Merger
Agreement.

     9.   Miscellaneous.
          --------------

          (a) Notice Generally.  Any notice, demand, request, consent, approval,
              ----------------
declaration, delivery or other communication hereunder to be made pursuant to
the provisions of this Agreement shall be sufficiently given or made if in
writing and either delivered in person with receipt acknowledged, delivered by
reputable overnight courier, telecopied and confirmed separately in writing by a
copy mailed as follows or sent by registered or certified mail, return receipt
requested, postage prepaid, addressed as set forth in the Merger Agreement (or
if to a Holder, to the Holder's address on his signature page hereto) if
applicable (it being agreed that notices to any Holder may be sent either to the
Holder or to the Representative).

          (b) Successors and Assigns.  This Agreement shall inure to the benefit
              ----------------------
of and be binding upon the successors and assigns of each of the parties hereto;
provided, however, that Holders' rights hereunder may not be transferred without
the written consent of the Company.

          (c) Governing Law.  This Agreement shall be governed by the laws of
              -------------
the State of Delaware, without regard to the provisions thereof relating to
conflict of laws.

          (d) Severability.  Wherever possible, each provision of this Agreement
              ------------
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provisions shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

          (e) Entire Agreement.  This Agreement is intended by the parties as a
              ----------------
final expression of their agreement and intended to be a complete exclusive
statement of all agreements and understandings of the parties hereto in respect
of the subject matter contained herein.  There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein.  This Agreement supersedes all prior agreements and understandings
between the parties with respect to the subject matter hereof.  Each PCA
Shareholder that executes and delivers this Agreement to the Company, whether in
connection with the Closing of the Merger Agreement or at a later time (but
prior to January 31, 2001), shall constitute a party to this Agreement as a
"Holder" hereunder.

          (f) Counterparts.  This Agreement may be executed in any number of
              ------------
separate counterparts, each of which shall collectively and separately,
constitute one agreement.

                                       8
<PAGE>

     IN WITNESS WHEREOF, the Company, the Representative and the undersigned
Holders have executed this Registration Rights Agreement as of the date first
above written.

                               AMERIPATH, INC.

                               By:_____________________________________
                               Name:  Robert P Wynn
                               Title:  Executive Vice President and
                                        Chief Financial Officer

                               REPRESENTATIVE:

                               QUESTOR PARTNERS FUND, L.P., as REPRESENTATIVE

                                 By: Questor General Partner, L.P.
                                 Its General Partner

                                     By:  Questor Principals, Inc.
                                     Its General Partner

                                     By:_______________________________
                                     Name:_____________________________
                                     Title:____________________________

           [the signatures of the Holders are on the following pages]

                                       9
<PAGE>

            Holder's Signature Page To Registration Rights Agreement
            --------------------------------------------------------

     This page is the undersigned Holder's signature page to the Registration
Rights Agreement among AmeriPath, Inc., the undersigned Holder and the other
"Holders" party thereto, and the "Representative" (as defined therein) of the
Holders.  The undersigned Holder intends to be legally bound by such
Registration Rights Agreement as a "Holder" thereunder.



     IN WITNESS WHEREOF, the undersigned Holder has executed this Registration
Rights Agreement as of the date first above written.

HOLDER:

- ---------------------------------------   If Holder is not an Individual, check
Name of Holder (Print)                                 ---                -----
                                          proper box, and indicate the title or
                                          ----------                   --------
                                          capacity of the signatory (president,
                                          --------
                                          trustee, partner, etc.) in the place
                                          provided under the signature below:


- ---------------------------------------   [_]   Trust
Name of Joint Holder (if any) (Print)     [_]   Partnership
                                          [_]   Corporation
                                          [_]   Other:   _____________
X
- ---------------------------------------
Signature of Holder

X
- ---------------------------------------
Signature of Joint Holder (if any)
                                                Address of Holder:

_______________________________________       __________________________________
Title or Capacity of Signatory                __________________________________
- -----------------                             __________________________________
(if Holder is not an Individual),             __________________________________
              ---
Authorized Representative

                                       10

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21.1
<SEQUENCE>5
<FILENAME>0005.txt
<TEXT>

                                                                    Exhibit 21.1

<TABLE>
<CAPTION>
                                                                                 DATE OF
SUBSIDIARIES                                                                     INCORPORATION    JURISDICTION
- ------------                                                                     -------------    ------------
<S>                                                                              <C>              <C>
AmeriPath Florida, Inc. f/k/a/ D & P Pathology, Inc.                             2/13/96          Florida
  d/b/a  American Laboratory Associates
         Derrick and Associates Pathology
         D&P Pathology
         Florida Pathology Associates
         Gulf Coast Pathology Associates
         Volusia Pathology Group
         Seidenstein, Levine and Associates
         Center for Advanced Diagnostics
         Indian River Pathology
         South Florida Pathology
         Bay Area Dermatopathology
         Bay Area Pathology

South Florida Pathology Associates, Inc.                                         3/9/83           Florida

Hialeah Pathology Associates, Inc.                                               1/3/80           Florida

AmeriPath Marketing USA, Inc.                                                    12/13/00         Florida

MedGenetics Diagnostics Laboratories,
 Inc.                                                                            7/7/84           Florida

Orange Park Pathology Laboratory
 Consultants, Inc.                                                               7/7/75           Florida

AmeriPath Alabama, Inc. f/k/a SkinPath,  P.C.
 d/b/a   SkinPath                                                                1/5/95           Alabama

Shoals Pathology Associates, Inc.                                                1/2/76           Alabama

AmeriPath Kentucky, Inc. f/k/a
 Technical Pathology Services, Inc.
  d/b/a  Pathology Associates                                                    2/02/88          Kentucky

AmeriPath Mississippi, Inc. f/k/a
 Sturgis, Henderson & Proctor Pathology Laboratory, P.A.                         12/30/70         Mississippi
 d/b/a   Sturgis, Henderson & Proctor Pathology Laboratory

R.M.C. Pathology Associates, Inc.                                                12/31/82         Missouri

AmeriPath Indiana, Inc. f/k/a Colab,
 Inc.                                                                            11/28/94         Indiana

AmeriPath Indianapolis, LLC*                                                     8/26/97          Indiana
  d/b/a  Colab, Inc.

AmeriPath New York, Inc.                                                         3/9/98           Delaware
d/b/a    East End Laboratories
         Ackerman Academy of Dermatopathology

A.Bernard Ackerman, M.D. Dermatopathology, P.C.                                  4/19/99          New York
d/b/a    Ackerman Academy of Dermatopathology
</TABLE>
<PAGE>

<TABLE>
<S>                                                                       <C>                               <C>
AmeriPath North Carolina, Inc. f/k/a H. Michael Jones M.D.,
 P.A.                                                                     6/1/80                            North Carolina

AmeriPath Consulting Pathology Services, P.A.***                          8/1/98                            North Carolina
  d/b/a       H. Michael Jones

Kilpatrick Pathology, P.A. ***                                            9/3/99                            North Carolina

AmeriPath Ohio, Inc.                                                      10/1/96                           Delaware

AmeriPath Cincinnati, Inc. f/k/a/ David R. Barron, M.D., Inc.*            1/1/68                            Ohio
  d/b/a       Richfield Laboratory of Dermatopathology

AmeriPath Cleveland, Inc. f/k/a Beno Michel, M.D., Inc.*                  4/15/76                           Ohio
  d/b/a       Cutaneous Pathology & Immunofluorescence Laboratory
              CPI Lab
              CPI
              Pathology Consultants of Cleveland

AmeriPath P.C.C., Inc. f/k/a Pathology Consultants of
 Cleveland *                                                              8/6/84                            Ohio
  d/b/a       Pathology Consultants of Cleveland

AmeriPath Youngstown, Inc. f/k/a Consultant Pathology
 Associates *                                                             8/1/96                            Ohio
  d/b/a       Consultant Pathology Associates

AmeriPath Youngstown Labs, Inc. f/k/a Mahoning Medical
 Laboratories                                                             3/28/94                           Ohio
  d/b/a       Mahoning Medical Laboratories

AmeriPath Pennsylvania, Inc.  f/k/a The Dermatopathology Laboratory       5/22/92                           Pennsylvania
  d/b/a       The Dermatopathology Laboratory
              TDL
AmeriPath Pittsburgh, P.C. ***                                            12/1/97                           Pennsylvania
  d/b/a       The Dermatopathology Laboratory
              TDL

AmeriPath Philadelphia, Inc. f/k/a Consulting Pathologists, PA            2/28/77                           New Jersey

Consulting Pathologists of Pennsylvania, PC ***                           7/19/99                           Pennsylvania

AmeriPath Texas, L.P.  (restructured from AmeriPath Texas, Inc.)          9/1/00                            Texas
  d/b/a       Freeman-Cockerell Laboratories
              Cockerell and Associates Dermatopathology Laboratories
              Severance & Associates

AmeriPath 5.01(a) Corporation**                                           2/7/97                            Texas
  d/b/a Cockerell and Associates Dermatopathology Laboratories

DFW 5.01(a) Corporation**                                                 7/21/97                           Texas
  d/b/a       AmeriPath  - Dallas
              Arlington-Mansfield Pathology Associates
              Dallas Pathology Associates
              Plano Pathology Associates
              Unipath
</TABLE>
<PAGE>

<TABLE>
<S>                                                                                              <C>          <C>
AmeriPath San Antonio 5.01(a) Corporation**                                                     7/8/98        Texas
  d/b/a       Severance & Associates

AmeriPath Lubbock 5.01(a) Corporation**                                                         6/9/98        Texas

AmeriPath Texarkana 5.01(a) Corporation** / ****                                                8/21/00       Texas

Arlington Pathology Association 5.01(a) Corporation***                                          12/29/72      Texas

Simpson Pathology 5.01(a) Corporation***                                                        7/1/82        Texas

Pathology Affiliated Services, Inc.                                                             12/31/97      Texas

AmeriPath PAT, Inc. f/k/a Pathology Associates of Texas, PA                                     12/2/71       Texas

Arlington Pathologists Associates, P. A. *** / ****                                             5/31/88       Texas

Chappell-Joyce Pathology Association, P.A. ***                                                  6/1/78        Texas

AmeriPath Wisconsin, Inc. f/k/a Consultants Physicians                                          1/1/68        Wisconsin
  in Pathology, S.C.
  d/b/a      Consultants Physicians in Pathology

AmeriPath Milwaukee, SC *** f/k/a Associated Laboratory Physician                               12/30/92      Wisconsin
   Services, SC

Ocmulgee Medical Pathology Association, Inc.                                                    7/30/76       Georgia

AmeriPath Carrollton, Inc. ****                                                                 5/26/00       Georgia

AmeriPath Michigan, Inc. f/k/a JJ Humes, MD & Associates, PC                                    1/2/69        Michigan

JJ Humes, MD and Associates/AmeriPath, PC ***                                                   12/6/99       Michigan

Pathology Consultants of America, Inc                                                           3/26/97       Tennessee
          d/b/a Inform DX

PCA of Denver, Inc.                                                                             12/12/97      Tennessee

PCA of Memphis, Inc.                                                                            12/12/97      Tennessee

PCA of Columbus, Inc.                                                                           12/12/97      Tennessee

PCA of Los Gatos, Inc.                                                                          10/27/98      Tennessee

Ben F. Martin, M.D., FCAP, Inc.                                                                 6/14/79       Mississippi

John H. Parker, Jr., M.D., FCAP, Inc.                                                           12/19/79      Mississippi

CPA I, Inc.                                                                                     10/15/99      Tennessee

CPA II, Inc.                                                                                    10/15/99      Tennessee

PCA/APR Acquisition Corporation                                                                 3/31/98       Tennessee

California Pathology Consultants of America, Inc.                                               2/23/98       Tennessee
</TABLE>
<PAGE>

<TABLE>
<S>                                                                         <C>           <C>
Georgia Pathology Consultants of America, Inc.                               2/23/98      Tennessee

PCA of Nashville, Inc.                                                       2/23/98      Tennessee

PCA Southeast II, Inc.                                                       12/4/98      Tennessee

PCA of St. Louis II, Inc.                                                    12/4/98      Tennessee

PathSOURCE, Inc.                                                             6/24/98      Delaware

PathSOURCE New England, Inc.                                                 3/16/99      Delaware

Dermpath, Inc.                                                               8/5/82       Delaware

TID Acquisition Corporation                                                  10/14/98     Delaware

Institute for Dermatopathology, P.C.***                                      4/8/97       Pennsylvania

AmeriPath, LLC                                                               8/30/00      Delaware

API No.2, LLC                                                                8/30/00      Delaware

Anatomic Pathology Services, Inc.                                            4/22/99      Oklahoma

Diagnostic Pathology Management Services, Inc.                               5/4/92       Oklahoma

Tulsa Diagnostics, P.C.***                                                   3/16/99      Oklahoma

Diagnostic Pathology Services, P.C.***                                       9/30/83      Oklahoma

AmeriPath Virginia, Inc. f/k/a Internat'l Telepathology Group, Inc. ****     6/24/93      Virginia
</TABLE>

- ----------------------------------------
*   The record holder is a trust of which AmeriPath, Inc. is the grantor and the
    sole beneficiary.
**  Non-Profit Corporation of which AmeriPath, Inc. is the sole member.
*** These entities are controlled through a nominee stock agreement.
****These entities are currently inactive.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>6
<FILENAME>0006.txt
<TEXT>

                                                                    EXHIBIT 23.1

                         INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in Registration Statements No. 333-
67303, No. 333-48183 and No. 333-51500 of AmeriPath, Inc. on Form S-8 of our
report dated March 29, 2001 appearing in the Annual Report on Form 10-K of
AmeriPath, Inc. for the year ended December 31, 2000.

DELOITTE & TOUCHE LLP
Fort Lauderdale, Florida

March 29, 2001

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>7
<FILENAME>0007.txt
<TEXT>

                                                                    EXHIBIT 23.2

                         INDEPENDENT AUDITORS' CONSENT

The Board of Directors
AmeriPath, Inc.

We consent to the incorporation by reference in the Registration Statements
(Forms S-8 No. 333-51500, No. 333-67303 and No. 333-48183) of AmeriPath, Inc. of
our report dated March 24, 2000, with respect to the consolidated financial
statements of Pathology Consultants of America, Inc. and subsidiaries (d/b/a/
InformDx) as of December 31, 1999 and for the two year period then ended and
incorporated by reference in the Annual Report (Form 10-K) of AmeriPath, Inc and
subsidiaries for the year ended December 31, 2000.

                                    /s/  Ernst & Young LLP

Nashville, Tennessee
March 26, 2001

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
