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EXHIBIT 2.3
RELEASE AND SETTLEMENT AGREEMENT
THIS RELEASE AND SETTLEMENT AGREEMENT (the "Agreement") is made and
entered into this 25th day of February, 1998 by and among MedPartners, Inc., a
Delaware corporation ("MedPartners"), ASG Merger Corporation, a Delaware
corporation and a wholly owned subsidiary of MedPartners (the "Subsidiary"),
EMSA Correctional Care, Inc., a Delaware corporation and an indirect wholly
owned subsidiary of MedPartners ("EMSA"), and America Service Group Inc., a
Delaware corporation ("ASG").
WITNESSETH:
WHEREAS, MedPartners, the Subsidiary and ASG entered into that certain
Plan and Agreement of Merger, dated October 1, 1997 (the "Merger Agreement"), as
amended by the Amendment to Plan and Agreement of Merger, dated December 29,
1997 (the "First Amendment"), and the Consent and Agreement, dated January 19,
1998 (the "Second Amendment") (collectively, the "Amended Merger Agreement");
WHEREAS, in connection with the negotiations surrounding the Merger
Agreement, MedPartners and ASG entered in that certain Confidentiality
Agreement, dated July 28, 1997;
WHEREAS, in the absence of this Agreement, ASG will file a lawsuit
against MedPartners and Subsidiary seeking actual, consequential and punitive
damages for the breach of certain of their representations, warranties,
covenants and agreements contained in the Amended Merger Agreement, and various
tort law claims, among other causes of action (the "Action");
WHEREAS, the Parties hereto wish to terminate the Amended Merger
Agreement and release their respective rights, claims, obligations and
liabilities thereunder;
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WHEREAS, in partial consideration of the payment by MedPartners to ASG,
ASG will assign all of its rights to EMSA and EMSA will assume all of ASG's
obligations and liabilities under each of the Joint Venture Agreements between
Prison Health Services, Inc. and EMSA related to the provision of services to
(i) Augusta-Richmond County, Georgia (3 facilities), (ii) Central Region New
York (Specialty Care Program), (iii) Ector County Detention Center, Texas, (iv)
Xxxxx County Indigent Care, Georgia, (v) Franklin County, Ohio, (vi) Hampton
Roads Regional Jail (Portsmith), Virginia, (vii) Xxxxxx County Jail, Florida,
(viii) State of New Mexico, and (ix) Trumball Correctional Institution, Ohio
(the "Joint Venture Agreements"); and
WHEREAS, in consideration of the covenants and consideration herein set
forth, MedPartners will assume all of ASG's obligations and liabilities under
the leases of the office space comprising ASG's Atlanta, Georgia, and Newark,
Delaware, regional offices and ASG will assign to MedPartners all of its right,
title and interest in and to any amounts received with respect to any sublease
or assignment of the Leases.
WHEREAS, the Parties are entering into a Non-Compete, Non-Solicitation
and Standstill Agreement (the "Non-Compete Agreement") in connection with the
settlement effected pursuant to this Agreement.
NOW, THEREFORE, in consideration of the covenants and consideration
herein set forth, and the payment described herein, the receipt and sufficiency
of which are hereby acknowledged by each of the Parties hereto, the Parties
agree as follows:
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ARTICLE 1.
DEFINITIONS
As used in this Agreement, the following terms have the
meanings specified below:
(a) "ASG" shall mean ASG and its predecessors, successors,
subsidiaries, affiliates, parents, divisions, partners, assigns,
insurers, agents, representatives, and present or former directors,
officers, and employees.
(b) "Leases" shall mean, collectively, the Lease, dated
September 19, 1996, between Piedmont Center, 1-4 LLC, a Delaware
limited liability company, and ASG, as amended, and the Agreement of
Lease, dated as of February 1, 1997, between American Trading Real
Estate Properties, Inc., a Maryland corporation, and Prison Health
Services, Inc., a Delaware corporation.
(c) "MedPartners" shall mean MedPartners, Inc. and its
predecessors, successors, subsidiaries, affiliates, parents, divisions,
partners, assigns, insurers, agents, representatives, and present or
former directors, officers, and employees, including Subsidiary and
EMSA.
(d) "Parties" means MedPartners and ASG, collectively.
(e) "Non-Compete Agreement" means the Non-Compete,
Non-Solicitation and Standstill Agreement attached hereto as Exhibit A.
(f) "Released Claims" means all known and unknown claims,
counterclaims, demands, rights, liabilities, obligations, and causes of
action, of every nature and description whatsoever (in equity and at
law), including without limitation any of the
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foregoing that (i) might have been asserted by ASG or MedPartners in
the Action; (ii) arise out of or relate to (A) the Amended Merger
Agreement or (B) any of the facts that could have been alleged in the
Action; (iii) arise out of or relate to the Joint Venture Agreements,
including, without limitation, Section 2.08 thereof; or (iv) arise out
of or relate to ASG's employment of Xx. Xxxxxx X. Xxxxx.
Notwithstanding the foregoing, Released Claims shall not include any
known or unknown claims, counterclaims, demands, rights, liabilities,
obligations, and causes of action, of every nature and description
whatsoever (in equity and at law) arising under or related to the
Confidentiality Agreement or the Non-Compete Agreement.
ARTICLE 2.
THE SETTLEMENT
2.1 Upon execution of this Agreement, MedPartners will pay ASG
the amounts set forth in Schedule 1 to this Agreement at the times set forth
therein, which payments, together with the performance by MedPartners of its
obligations set forth in Sections 2.5 and 2.6 shall be in full satisfaction of
the Released Claims and as consideration for ASG's interest in the Joint Venture
Agreements.
2.2 In consideration of the mutual covenants herein, and upon
execution of this Agreement, MedPartners hereby fully, finally, and forever
releases, relinquishes, and discharges all Released Claims against ASG. In
connection with such release, MedPartners and EMSA agree that they, their
affiliates, officers or directors will not arrange for, cooperate with, consent
to, encourage, support, supply information to, or solicit any individual, entity
or group (including stockholders of ASG) in the pursuit or prosecution of any
Released Claim against
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ASG, its officers or directors, unless in the written opinion of counsel to
MedPartners such action is necessary for MedPartner's Board of Directors to
fulfill its fiduciary duty or is otherwise required by law. In the event any
individual, entity or group (including stockholders of MedPartners) shall elect
to pursue a derivative suit (or any similar such action) involving any Released
Claim, MedPartners shall file a motion with the appropriate court for dismissal
of the suit and shall fully cooperate with ASG in the defense of any such suit
unless in the written opinion of counsel to MedPartners such action is
inconsistent with Fed.R.Civ.P. 11, similar state law provisions, or the
fiduciary duties of MedPartner's Board of Directors, or any committee thereof.
ASG shall reimburse MedPartners for any and all reasonable expenses incurred by
MedPartners in connection with filing such motion or cooperating with ASG in
such defense. Notwithstanding the foregoing, in the event MedPartners is a named
defendant in any such action, it shall assume and be responsible for any
attorney's fees, costs and expenses associated with its defense, except as set
forth in the preceding sentence.
2.3 In consideration of the mutual covenants herein, and upon
execution of this Agreement, the Joint Venture Agreements are hereby amended to
delete the entirety of Section 2.08, Article V and Section 10.02 of each Joint
Venture Agreement.
2.4 EMSA hereby assumes from ASG and ASG hereby assigns to
EMSA the Joint Venture Agreements and all of ASG's rights and obligations
thereunder.
2.5 MedPartners hereby assumes all of ASG's obligations
pursuant to the Leases, effective as of February 1, 1998. ASG hereby assigns to
MedPartners all of its right, title and interest in and to any and all amounts
paid by any sublessee or assignee of the Leases or either of them and hereby
agrees to co-operate with MedPartners in its efforts to sublease or
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assign the Leases. MedPartners agrees to pay to ASG on the date of the execution
hereof the sum of $4,339.50, representing the amount of the security deposit
paid by ASG with respect to the Leases. ASG agrees that MedPartners shall be
entitled to receive, and agrees to pay to MedPartners, the amount of any refund
of such security deposit received by ASG.
2.6 MedPartners shall maintain at its own expense, the same
employee benefits program presently in effect for all employees of ASG, which
employee benefits program is more particularly described on Schedule 2 hereto,
for the period from January 1, 1998, through December 31, 1998. MedPartners
shall provide such benefits in a manner that will not require "reenrollment" by
ASG's employees.
2.7 MedPartners and EMSA jointly and severally agree to
indemnify and hold harmless ASG from, against and in respect of any and all
claims, liabilities, obligations, losses, costs, expenses, penalties, fines and
judgments (at equity or at law) and damages whenever arising or incurred
(including, without limitation, amounts paid in settlement, cost of
investigation and reasonable attorneys' fees and expenses) arising out of or
relating to the Joint Venture Agreements.
2.8 In consideration of the mutual covenants herein, and upon
execution of this Agreement, ASG hereby fully, finally, and forever releases,
relinquishes, and discharges all Released Claims against MedPartners. In
connection with such release, ASG agrees that it, its affiliates, officers or
directors will not arrange for, cooperate with, consent to, encourage, support,
supply information to, or solicit any individual, entity or group (including
stockholders of ASG) in the pursuit or prosecution of any Released Claim against
MedPartners, its officers or directors, unless in the written opinion of counsel
to ASG such action is necessary for ASG's
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Board of Directors to fulfill its fiduciary duty or is otherwise required by
law. In the event any individual, entity or group (including stockholders of
ASG) shall elect to pursue a derivative suit (or any similar such action)
involving any Released Claim, ASG shall file a motion with the appropriate court
for dismissal of the suit and shall fully cooperate with MedPartners in the
defense of any such suit unless in the written opinion of counsel to ASG such
action is inconsistent with Fed.R.Civ.P. 11, similar state law provisions, or
the fiduciary duties of ASG's Board of Directors, or any committee thereof.
MedPartners shall reimburse ASG for any and all reasonable expenses incurred by
ASG in connection with filing such motion or cooperating with MedPartners in
such defense. Notwithstanding the foregoing, in the event ASG is a named
defendant in any such action, it shall assume and be responsible for any
attorney's fees, costs and expenses associated with its defense, except as set
forth in the preceding sentence.
2.9 The Parties agree to mutually terminate the Amended Merger
Agreement pursuant to Section 8.1(a) of the Merger Agreement.
2.10 Pursuant to Paragraph 1 of the Confidentiality Agreement
dated July 28, 1997, by and between ASG and MedPartners, ASG and MedPartners and
their respective affiliates shall promptly destroy all "Confidential
Information" (as defined in the Confidentiality Agreement) furnished by either
of them to the other.
ARTICLE 3.
OTHER
3.1 In entering into this Agreement, the undersigned represent
that they have read all the terms hereof, have discussed the terms with counsel
and that such terms are fully understood and voluntarily accepted.
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3.2 This Agreement shall be in all respects interpreted,
enforced, and governed by and under the laws of the State of Delaware, without
regard to the conflict of laws principles thereof.
3.3 Each party to this Agreement acknowledges that this
Agreement supersedes all prior agreements, discussions, or representations,
whether oral or written, with respect to the subject matter hereof, with the
exception of the Confidentiality Agreement and the Non-Compete Agreement. This
Agreement specifically supersedes the Amended Merger Agreement and the Joint
Venture Agreements. The Parties further acknowledge that this Agreement cannot
be varied or amended except by writing signed by the Parties hereto.
3.4 Each party represents and warrants that the person
executing this Agreement in its behalf is duly authorized and fully competent to
execute this Agreement in its behalf.
3.5 All payments required to be made pursuant to this
Agreement shall be made on the due date by wire transfer of immediately
available funds to the account of ASG specified on Schedule 1 hereto. Any
payment that is required to be made on a due date that is not a day on which
commercial banks are open for business in either Birmingham, Alabama, or
Nashville, Tennessee, shall be made on the next day on which such banks in both
such cities are open for business, without interest. Subject to the preceding
sentence, any payment due pursuant to this Agreement that is not paid on the due
date shall bear interest at an interest rate per annum equal to the "prime rate"
from time to time announced by SunTrust Bank, Atlanta, Georgia, plus 2%. If ASG
shall be required to collect any amount due to it pursuant to this Settlement
Agreement by law or through an attorney at law, MedPartners shall pay all
reasonable costs of
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collection incurred by ASG, including, without limitation, reasonable attorney's
fees, to the extent actually incurred.
3.6 This Agreement shall be construed without regard to the
Party or Parties responsible for its preparation, and it shall be deemed to have
been prepared jointly by both Parties. Any ambiguity or uncertainty arising
herein shall not be interpreted or construed against any Party hereto.
CONSENTED AND AGREED:
MEDPARTNERS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
Title: Secretary
ASG MERGER CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
Title: Secretary
EMSA CORRECTIONAL CARE, INC.
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Secretary
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AMERICA SERVICE GROUP INC.
By: /s/ Xxxxx X. Mercy
---------------------------------------------
Name: Xxxxx X. Mercy
Title: President and Chief Executive Officer
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SCHEDULE 1 TO SETTLEMENT AGREEMENT
PAYMENT AMOUNT: DUE DATE:
--------------- ---------
On execution $1,694,660.50
On April 1, 1998 $605,333.33
On July 1, 1998 $605,333.33
On September 1, 1998 $605,333.33
WIRE TRANSFER INSTRUCTIONS:
All amounts due to ASG pursuant to the Settlement Agreement shall be remitted to
such account as shall be specified by ASG to MedPartners in writing.
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SCHEDULE 2 TO SETTLEMENT AGREEMENT
----------------------------------
Employee Benefit Plans
Medical Plans*
Caremark Prescription Drug Program*
Dental Plans*
Life Insurance
Spouse Life Insurance
Child Life Insurance
Business Travel Insurance
Accidental Death & Dismemberment
Supplemental Life Insurance
Short Term Disability
Long Term Disability
Healthcare Reimbursement Account
Dependant Care Voucher
*Includes coverage for employee, spouse and dependants. In addition, MedPartners
must pay each employee $600 annually if they have other medical coverage and
elect no coverage through the MedPartners' Plans listed above.
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EXHIBIT A
NON-COMPETE, NON-SOLICITATION AND STANDSTILL AGREEMENT
NON-COMPETE, NON-SOLICITATION AND STANDSTILL AGREEMENT ("NON-COMPETE"),
made and entered into as of the 25th day of February, 1998, by and among
MEDPARTNERS, INC., a Delaware corporation ("MedPartners"), ASG MERGER
CORPORATION, a Delaware corporation (the "Subsidiary"), INPHYNET GOVERNMENTAL
SERVICES, INC., a Florida corporation and an indirect wholly owned subsidiary of
MedPartners ("InPhyNet"), EMSA CORRECTIONAL CARE, INC., a Florida corporation
and a direct wholly owned subsidiary of InPhyNet ("EMSA") (MedPartners,
Subsidiary, InPhyNet and EMSA being sometimes collectively referred to herein as
"MedPartners Entities" or individually as, a "MedPartners Entity") and AMERICA
SERVICE GROUP INC., a Delaware corporation ("ASG").
W I T N E S S E T H:
WHEREAS, MedPartners, the Subsidiary and ASG entered into that certain
Plan and Agreement of Merger, dated October 1, 1997 (the "Merger Agreement"), as
amended by the Amendment to Plan and Agreement of Merger, dated December 29,
1997 (the "First Amendment"), and the Consent and Agreement, dated January 19,
1998 (the "Second Amendment") (collectively, the "Amended Merger Agreement");
WHEREAS, in connection with the negotiations surrounding the Merger
Agreement, MedPartners and ASG entered in that certain Confidentiality
Agreement, dated July 28, 1997 (the Confidentiality Agreement");
WHEREAS, MedPartners, the Subsidiary and ASG have entered into a
Settlement and Release Agreement, dated the date hereof (the "Settlement
Agreement"), pursuant to which MedPartners paid and agreed to pay ASG certain
amounts specified therein and to perform certain other undertakings for the
benefit of ASG, and MedPartners, the Subsidiary and ASG agreed to release each
other from any and all Released Claims (as defined in the Settlement Agreement)
and the Merger Agreement was terminated;
WHEREAS, each of the MedPartners Entities acknowledge that while
conducting due diligence in connection with the Merger Agreement and following
the signing of the Merger Agreement they came into possession of information
concerning ASG that would give them a competitive advantage over ASG when
competing for business against ASG;
WHEREAS, ASG acknowledges that while conducting due diligence in
connection with the Amended Merger Agreement and following the signing of the
Amended Merger Agreement, it came into possession of information concerning the
MedPartners' Entities which would give it
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a competitive advantage over the MedPartners Entities when competing for
business against the MedPartners Entities.
WHEREAS, each of the MedPartners Entities acknowledges that their
respective employees (and the employees of their respective subsidiaries and
affiliates) have been contacting and meeting with the clients of ASG in
preparation for the consummation of the Merger;
NOW, THEREFORE, in consideration of the premises, and the
mutual covenants and agreements contained herein, the parties hereto do hereby
agree as follows:
ARTICLE 1.
DEFINITIONS
1.1 Definitions. For the purposes of this Agreement, the following
definitions shall apply:
(a) "Affiliate" shall mean, with respect to any Person, any
other Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by, or is under common
Control with, such Person.
(b) "Activities" shall mean the provision of capitated
contracts and other contractual arrangements, directly or indirectly,
with federal, state, county, and local government agencies to provide
health care services to adult or juvenile prison or jail inmates or
wards (including on-site health care programs, off-site hospitalization
and specialty out-patient care, physical and mental health screening,
dental screening and care, psychiatric care, OB-GYN screening and care,
diagnostic testing, emergency room care and surgery).
(c) "Applicable Law" shall mean all applicable provisions of
all (a) constitutions, treaties, statutes, laws (including common law),
rules, regulations, ordinances or codes of any Governmental Authority,
and (b) orders, decisions, injunctions, judgments, awards and decrees
of any Governmental Authority.
(d) "ASG Client" shall mean those Persons, facilities or
contracts, as applicable, listed on Exhibit A.
(e) "ASG Voting Securities" shall mean ASG's Common Stock, par
value $.01 per share, and any other securities of ASG having the right
to Vote.
(f) "Associate" shall mean, with respect to any person, (1)
any corporation or organization (other than such person or a
majority-owned subsidiary of such person) of which such person is an
officer or partner or is, directly or indirectly, the beneficial owner
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of 10 percent or more of any class of equity securities, (2) any trust
or other estate in which such person has a substantial beneficial
interest or as to which such person serves as trustee or in a similar
fiduciary capacity, and (3) any relative or spouse of such person, or
any relative of such spouse, who has the same home as such person or
who is a director or officer of the person or any of its parents or
subsidiaries.
(g) "Beneficial Owner" (including, with its correlative
meanings, "Beneficially Own" and "Beneficial Ownership"), with respect
to any securities, shall mean any Person which:
(i) has, or any of whose Affiliates or
Associates has, directly or indirectly, the
right to acquire (whether such right is
exercisable immediately or only after the
passage of time) such securities pursuant to
any agreement, arrangement or understanding
(whether or not in writing) or upon the
exercise of conversion rights, exchange
rights, warrants or options or otherwise;
(ii) has, or any of whose Affiliates or
Associates has, directly or indirectly, the
right to vote or dispose of (whether such
right is exercisable immediately or only
after the passage of time) or "beneficial
ownership" of (as determined pursuant to
Rule 13d-3 under the Exchange Act as in
effect on the date hereof but including all
such securities which a Person has the right
to acquire beneficial ownership of, whether
or not such right is exercisable within the
60-day period specified therein) such
securities, including pursuant to any
agreement, arrangement or understanding
(whether or not in writing); or
(iii) has, or any of whose Affiliates or
Associates has, any agreement, arrangement
or understanding (whether or not in writing)
for the purpose of acquiring, holding,
voting or disposing of any securities which
are Beneficially Owned, directly or
indirectly, by any other Person (or any
Affiliate or Associate thereof).
(h) "Confidential Information" shall mean any data or
information of ASG and its subsidiaries and joint ventures, other than
Trade Secrets, which is valuable to the operation of the business of
ASG and not generally known to competitors.
(i) "EMSA Clients" shall mean those Persons, facilities or
contracts, as applicable, listed on Exhibit B.
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(j) "Exchange Act" shall mean the Securities Exchange Act of
1934, or any similar federal statute, and the rules and regulations of
the SEC thereunder, all as the same shall be in effect at the time.
(k) "Group" shall mean any group within the meaning of Section
13(d)(3) of the Exchange Act as in effect on the date hereof.
(l) "Governmental Authority" shall mean any federation,
nation, state, sovereign, or government, any federal, supranational,
regional, state or local political subdivision, any governmental or
administrative body, instrumentality, department or agency or any
court, administrative hearing body, arbitration tribunal, commission or
other similar dispute resolving panel or body, and any other entity
exercising the executive, legislative, judicial, regulatory or
administrative functions of a government.
(m) "Noncompete Period" shall mean the period beginning on the
date hereof and continuing for a period of three (3) years from the
date hereof.
(n) "Party" shall mean, on the one hand, the MedPartners
Entities and, on the other hand, ASG.
(o) "Person" shall mean an individual, a partnership, an
association, a joint venture, a corporation, a business, a limited
liability company, a trust, any entity organized under Applicable Law,
an unincorporated organization or any Governmental Authority.
(p) "SEC" shall mean the United States Securities and Exchange
Commission.
(q) "Territory" shall mean the United States of America, such
area being where the customers of ASG and the MedPartners Entities are
located.
(r) "Trade Secrets" shall mean information of ASG and its
Affiliates, subsidiaries and joint ventures, on the one hand, or, the
MedPartners Entities and their Affiliates, subsidiaries and joint
ventures, on the other hand, including, but not limited to, technical
or nontechnical data, a formula, pattern, compilation, program,
including, without limitation, computer software and related source
codes (including ASG's proprietary "Daily Operating Indicators"
software), device, method, technique, drawing, process, financial data,
financial plan, product plan, list of actual or potential customers or
suppliers, or other information similar to any of the foregoing, which
derives economic value, actual or potential, from not being generally
known to, and not being readily ascertainable by proper means by, other
persons who can derive economic value from its disclosure or use. For
purposes of this Agreement, the term Trade Secrets shall not include
information that the applicable MedPartners Entity or ASG, as the case
may be,
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can show by competent proof becomes generally known to the public after
the date hereof through no act or omission of any MedPartners Entity or
ASG, as the case may be, or their respective Affiliates and Associates.
(s) "Vote" shall mean, as to any entity, the ability to cast a
vote at a stockholders' or comparable meeting of such entity with
respect to the election of directors or other members of such entity's
governing body.
ARTICLE 2.
NONCOMPETE AND NO SOLICITATION
2.1 Trade Secrets. Each Party shall, and shall cause each of its
respective Affiliates and Associates to, hold in confidence at
all times after the date hereof all Trade Secrets of the other
Party, and shall not disclose, publish or make use of Trade
Secrets of the other Party at any time after the date hereof
without the prior written consent of such Party. Nothing in
this Agreement shall diminish the rights of either Party
regarding the protection of Trade Secrets and other
intellectual property pursuant to applicable law.
2.2 Confidential Information. Each Party hereby agrees that, prior
to the third anniversary of the date hereof, each Party shall,
and shall cause each of its respective Affiliates and
Associates to, hold in confidence all Confidential Information
of the other Party and will not disclose, publish or make use
of Confidential Information of the other Party without the
prior written consent of such Party.
2.3 Noncompetition.
(a) Each Party hereby acknowledges that the other Party
conducts or will conduct Activities throughout the Territory. Each
Party acknowledges that to protect adequately the interest of the other
Party, it is essential that any noncompete covenant with respect
thereto cover all ASG Activities and the entire Territory. Each Party
further acknowledges that the covenants set forth in this Agreement are
a material condition to the willingness of the other Party to enter
into the Settlement Agreement, and that each Party and its respective
Affiliates and Associates desires to enter into these covenants in
order to obtain the substantial benefits that each Party and its
respective Affiliates and Associates will obtain as a result of the
Settlement Agreement.
(b) Each Party hereby agrees that each such Party shall not,
and it shall cause each of its respective Affiliates and Associates not
to, during the Noncompete Period, in any manner, directly or indirectly
or by assisting others, communicate with, make proposals or bids to or
render services (that (i) are being provided by the other Party on
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the date of this Agreement and (ii) are, at least in part, equivalent
to Activities) to any ASG Client or EMSA Client, as the case may be, in
the Territory; subject, however, to exceptions set forth in Exhibit C.
Any Party to this Agreement may seek the written consent of each other
Party to this Agreement to the waiver of the prohibition set forth in
this Section 2.3(b) with respect to any ASG Client or EMSA Client, as
the case may be, specified in such request, which consent may not be
unreasonably withheld.
2.4 Nonsolicitation. Each Party hereby agrees that it shall not, and it
shall cause each of its respective Affiliates and Associates not to, prior to
the third anniversary of the date hereof, in any manner, directly or indirectly
or by assisting others, recruit or hire away or attempt to recruit or hire away,
on behalf of themselves or on behalf of any other Person, any person who is an
employee of the other Party or any of its Affiliates.
2.5 Future Acquisitions. The Parties agree that nothing set forth in
this Agreement shall preclude either Party from acquiring another entity engaged
in the Activities or shall require either Party to terminate any contract
entered into by or withdraw any bid or response to a request-for-proposals
issued by any entity acquired by such Party.
ARTICLE 3.
STANDSTILL COVENANTS
3.1 Standstill Covenants. Each Party agrees that, prior to the
third anniversary of the date of this Agreement (the
"Standstill Period"), it will not, and it will cause each of
its Affiliates and Associates not to, directly or indirectly,
alone or in concert with others, unless specifically requested
in writing by the Chairman of the other party, take any of the
actions set forth below:
(a) effect, seek, offer, propose (whether publicly or
otherwise) or cause or participate in, or assist any other Person to
effect, seek, offer or propose (whether publicly or otherwise) or
participate in:
(i) any acquisition of Beneficial Ownership of
the other Party's Voting Securities or other
equity interests in the other Party;
(ii) any tender or exchange offer, merger,
consolidation, share exchange or business
combination involving the other Party or any
material portion of its business or any
purchase of all or any substantial part of
the assets of the other Party or any
material portion of its business;
(iii) any recapitalization, restructuring,
liquidation, dissolution or other
extraordinary transaction with respect to
the other Party or any material portion of
its business; or
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(iv) any "solicitation" of "proxies" (as such
terms are used in the proxy rules of the SEC
but without regard to the exclusion set
forth in Section 14a-1(l)(2)(iv) from the
definition of "solicitation") with respect
to ASG or any of its Affiliates or any
action resulting in such Person becoming a
"participant" in any "election contest" (as
such terms are used in the proxy rules of
the SEC) with respect to a Party or any of
its Affiliates;
(b) propose any matter for submission to a vote of
stockholders of the other Party or any of its Affiliates;
(c) form, join or participate in a Group with respect to any
of the other Party's Voting Securities;
(d) take any other action to seek to affect the control of the
management or Board of Directors of the other Party or any of its
Affiliates;
(e) enter into any discussions, negotiations, arrangements or
understandings with any Person with respect to any of the foregoing, or
advise, assist, encourage or seek to persuade others to take any action
with respect to any of the foregoing;
(f) disclose to any Person, any intention, plan or arrangement
inconsistent with the foregoing or form any such intention which would
result in either Party or any of its Affiliates or Associates being
required to make any such disclosure in any filing with a Governmental
Authority or being required by Applicable Law to make a public
announcement with respect thereto; or
(g) request the other Party or any of its Affiliates,
directors, officers, employees, representatives, advisors or agents,
directly or indirectly, to amend or waive in any material respect this
Agreement or the Certificate of Incorporation or the Bylaws of the
other Party or any of its Affiliates.
ARTICLE 4.
MISCELLANEOUS
4.1 Representations and Warranties. The Parties represent and
warrant to one another that this Agreement has been duly
authorized by all corporate action required to be taken on
each of their parts, that it has been duly executed by and
delivered and that it constitutes the legal, valid and binding
obligation of each of them, except as enforcement may be
subject to bankruptcy, moratorium and similar laws and except
as the availability of equitable remedies may be subject to
customary limitations.
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4.2 Severability. If a judicial or arbitral determination is made
that any of the provisions of this Agreement constitutes an
unreasonable or otherwise unenforceable restriction against
either Party or their respective Affiliates or Associates, the
provisions of this Agreement shall be rendered void only to
the extent that such judicial or arbitral determination finds
such provisions to be unreasonable or otherwise unenforceable
with respect to either Party or their respective Affiliates or
Associates. In this regard, each MedPartners Entity and ASG
hereby agree that any judicial authority construing this
Agreement shall be empowered to sever any portion of the
Territory, any prohibited business activity or any time period
from the coverage of this Agreement and to apply the
provisions of this Agreement to the remaining portion of the
Territory, the remaining business activities and the remaining
time period not so severed by such judicial or arbitral
authority. Moreover, notwithstanding the fact that any
provision of this Agreement is determined not to be
specifically enforceable, each Party shall nevertheless be
entitled to recover monetary damages as a result of the breach
of such provision by the other Party or its respective
Affiliates or Associates. The time period during which the
prohibitions set forth in this Agreement shall apply with
respect to each Party and its respective Affiliates or
Associates shall be tolled and suspended for a period equal to
the aggregate time during which any such party violates such
prohibitions in any respect.
4.3 Injunctive Relief. Each Party hereby agrees that any remedy at
law for any breach of the provisions contained this Agreement
shall be inadequate and that the other Party shall be entitled
to injunctive relief in addition to any other remedy the other
Party might have under this Agreement.
4.4 Notices. Any communications required or desired to be given
hereunder shall be deemed to have been properly given if sent
by hand delivery or by facsimile and overnight courier to the
parties hereto at the following addresses, or at such other
address as either party may advise the other in writing from
time to time:
If to any MedPartners Entity:
MedPartners, Inc.
0000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: J. Xxxxxx Xxxxxxxx, Xx., Esq.
Senior Vice President and General Counsel
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with a copy to:
Xxxxxxx Xxxxxxxxx & Young, L.L.C.
0000 XxXxxxx Xxxxxxx Xxxxx
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxx Xxxxxx, Esq.
If to ASG:
America Service Group Inc.
Xxxxx 000
000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxx, Esq.
Executive Vice President and
General Counsel
with a copy to:
King & Spalding
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
All such communications shall be deemed to have been delivered on the date of
hand delivery or on the next business day following the deposit of such
communications with the overnight courier.
4.5 Further Assurances. Each party hereby agrees to perform any
further acts and to execute and deliver any documents which
may be reasonably necessary to carry out the provisions of
this Agreement.
4.6 Governing Law. This Agreement shall be interpreted, construed
and enforced in accordance with the laws of the State of
Delaware, applied without giving effect to any
conflicts-of-law principles.
4.7 Captions. The captions or headings in this Plan of Merger are
made for convenience and general reference only and shall not
be construed to describe, define or limit the scope or intent
of the provisions of this Non-Compete Agreement.
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4.8 Entire Agreement. This Non-Compete Agreement, the Settlement
Agreement, the Joint Venture Agreements and the
Confidentiality Agreement, contain the entire agreement of the
parties and supersedes any and all prior or contemporaneous
agreements between the parties, written or oral. Such
agreement may not be changed or terminated orally, but may
only be changed by an agreement in writing signed by the party
or parties against whom enforcement of any waiver, change,
modification, extension, discharge or termination is sought.
4.9 Counterparts. This Non-Compete Agreement may be executed in
several counterparts, each of which, when so executed, shall
be deemed to be an original, and such counterparts shall,
together, constitute and be one and the same instrument.
4.10 Binding Effect. This Non-Compete Agreement shall be binding
on, and shall inure to the benefit of, the parties hereto, and
their respective successors and assigns, and no other person
shall acquire or have any right under or by virtue of this
Agreement. No party may assign any right or obligation
hereunder without the prior written consent of the other
parties.
4.11 No Rule of Construction. The parties acknowledge that this
Agreement was initially prepared by ASG, and that all parties
have read and negotiated the language used in this Agreement.
The parties agree that, because all parties participated in
negotiating and drafting this Agreement, no rule of
construction shall apply to this Agreement which construes
ambiguous language in favor of or against any party by reason
of that party's role in drafting this Agreement.
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IN WITNESS WHEREOF, MedPartners, Subsidiary, InPhyNet, EMSA and ASG
have caused this Agreement to be executed by their respective duly authorized
officers, all as of the day and year first above written.
MEDPARTNERS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Secretary
ASG MERGER CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Secretary
INPHYNET GOVERNMENTAL SERVICES,
INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Secretary
EMSA CORRECTIONAL CARE, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Secretary
AMERICA SERVICE GROUP INC.
By: /s/ Xxxxx X. Mercy
-------------------------------------------
Name: Xxxxx X. Mercy
Title: President and Chief Executive Officer
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