EXHIBIT C
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of December ___, 1996 (the
"Merger Agreement") by and among Long Island Physician Holdings Corporation, a
New York corporation ("LIPH"), MDNY Holdings, LLC, a New York limited liability
company ("Holdings"), and MDNY Holdings Delaware, Inc., a Delaware corporation
and wholly-owned subsidiary of Holdings ("MergerCo").
WHEREAS, on the date hereof, LIPH has authority to issue 12,500,000
shares of Common Stock, par value $.001 per share, consisting of 2,500,000
shares of the Class A Common Stock (the "Class A Common Stock") and 10,000,000
shares of the Class B Common Stock (the "Class B Common Stock"). There are a
total of 5,842 shares of Common Stock issued and outstanding consisting of 1,523
shares of Class A Common Stock and 4,319 shares of Class B Common Stock;
WHEREAS, on the date hereof, Holdings, as a limited liability company,
has authority to issue an unlimited amount of Class A Membership Interests,
Class B-1, B-2 and B-3 Membership Interests and Class C-1 Membership Interests
(the "Membership Interests"), none of which are issued and outstanding;
WHEREAS, on the date hereof, MergerCo has authority to issue 200
shares of Common Stock, par value $.01 per share, all of which are issued and
outstanding and owned by Holdings;
WHEREAS, LIPH presently owns approximately 66-2/3% of the Common Stock
of MDNY Healthcare, Inc., a health maintenance organization incorporated in New
York ("MDNY"), and the Catholic Healthcare Network of Long Island, Inc., a New
York not-for-profit corporation ("CHNLI"), owns approximately 33-1/3% of the
Common Stock of MDNY;
WHEREAS, in order to enable MDNY to make certain ancillary services
available to its potential subscribers which cannot be offered by MDNY directly
or through a subsidiary, but may be offered by an entity that is under common
ownership with MDNY, LIPH, MDNY and CHNLI have agreed that the equity interests
in MDNY should be owned by Holdings;
WHEREAS, the respective Boards of Directors of LIPH and MergerCo and
the Board of Managers of Holdings have determined that it is advisable and in
the best interests of each of such companies that LIPH merge with and into
MergerCo and that MergerCo then merge with and into Holdings upon the terms and
conditions set forth herein for the purpose of effecting the restructuring of
the equity ownership of MDNY (the "Merger");
WHEREAS, immediately prior to the Merger, CHNLI will exchange its
shares of MDNY Common Stock for shares of Class B Common Stock and newly-created
Class C Common Stock of LIPH in proportions that will preserve the relative
equity and voting rights of CHNLI and LIPH in MDNY;
WHEREAS, the respective Boards of Directors of LIPH and MergerCo and
the Board of Managers of Holdings have, by resolutions duly adopted, approved
this Merger Agreement;
WHEREAS, Holdings has approved this Merger Agreement as the sole
shareholder of MergerCo; and
WHEREAS, the Board of Directors of LIPH has directed that this Merger
Agreement be submitted to a vote of its shareholders at a meeting to be held on
January 25, 1997, or at any and all adjournments thereof;
NOW, THEREFORE, in consideration of the mutual agreements and
covenants herein contained, LIPH, Holdings and MergerCo hereby agree as follows:
SECTION 1. MERGER. As part of a single transaction, LIPH will be
merged into MergerCo and MergerCo will then be merged into Holdings. Holdings
will be the surviving entity (the "Surviving Entity"). The Merger will become
effective upon the date and time of the filing of an appropriate certificate of
merger, providing for the Merger, with the Secretary of State of the State of
New York and an appropriate certificate of merger, providing for the Merger,
with the Secretary of State of the State of Delaware, whichever later occurs
(the "Effective Time").
SECTION 2. GOVERNING DOCUMENT. The Amended and Restated Operating
Agreement of MDNY Holdings, LLC (the "Operating Agreement") as in effect
immediately prior to the Effective Time, shall be the Operating Agreement of the
Surviving Entity without change or amendment until thereafter amended in
accordance with the provisions thereof and applicable law.
SECTION 3. SUCCESSION. At the Effective Time, the separate corporate
existence of LIPH and MergerCo shall cease, and Holdings shall succeed to all of
the assets and property, rights, privileges, franchises, immunities and powers
of LIPH and MergerCo, and Holdings shall assume and be subject to all of the
duties, liabilities, obligations and restrictions of every kind and description
of LIPH and MergerCo, including, without limitation, all outstanding
indebtedness of LIPH and MergerCo.
SECTION 4. BOARD OF MANAGERS AND OFFICERS. The Board of Managers and
Officers of the Surviving Entity shall be elected as set forth in the Operating
Agreement.
SECTION 5. CONVERSION OF SECURITIES. At the Effective Time, by
virtue of the Merger and without any action on the part of the holder thereof:
(a) Each share of MergerCo Common Stock issued and
outstanding immediately prior to the Effective Time shall no longer be
outstanding and shall automatically be cancelled and retired and shall cease to
exist, and no shares of LIPH Common Stock or other securities shall be issued in
respect thereof.
(b) Each share of LIPH Common Stock issued and outstanding
immediately prior to the Effective Time shall no longer be outstanding, shall
automatically be cancelled and retired and shall cease to exist, and shall be
converted into and exchanged for the right to receive Membership Interests in
Holdings in such amounts as between the Class B and Class C shareholders that
will reflect the relative equity and voting rights of CHNLI and LIPH in MDNY at
the Effective Time.
(c) As a result of the Merger, holders of LIPH Class A
Common Stock and Class B Common Stock will receive Class A non-voting Membership
Interests and Class B-1 voting Membership Interests in Holdings in exchange for
their LIPH Common Stock.
(d) As a result of the Merger, holders of LIPH Class A
Common Stock and Class C Common Stock will receive Class A non-voting Membership
Interests and Class C-1 voting Membership Interests in Holdings in exchange for
their LIPH Common Stock.
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SECTION 6. DISSENTING SHAREHOLDER. Notwithstanding the provisions of
Section 5 hereof, any outstanding shares of LIPH stock held by a shareholder who
shall have elected to dissent from the Merger and who shall have exercised and
perfected appraisal rights with respect to such shares in accordance with
Section 623 of the New York Business Corporation Law (a "Dissenting
Shareholder") shall not be converted into Membership Interests as a result of
the Merger, but Dissenting Shareholders shall be entitled to receive in lieu
thereof only such consideration as shall be provided by Section 623.
SECTION 7. CONVERSION OF OPTIONS. Each option to purchase shares of
LIPH Common Stock granted to certain LIPH shareholders which is outstanding
immediately prior to the Effective Time shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into and
become an option or right to acquire (and Holdings hereby assumes the obligation
to deliver) the equivalent number of Holdings Class A Membership Interests at a
comparable price per Interest, and upon the same terms and conditions as pertain
to the LIPH options as in effect immediately prior to the Effective Time.
Holdings hereby assumes, as of the Effective Time, all obligations of LIPH in
connection with the outstanding options.
SECTION 8. CONDITIONS TO THE MERGER. The consummation of the Merger
and the other transactions herein provided is subject to:
(a) Receipt prior to the Effective Time of the requisite
approval of the Merger, this Merger Agreement and the Amendments to the LIPH
Certificate of Incorporation and By-Laws necessary to effectuate the Merger, by
the shareholders of LIPH pursuant to the New York Business Corporation Law; and
(b) The exchange by CHNLI of all of its shares of MDNY
Common Stock for shares of LIPH Class B Common Stock and LIPH Class C Common
Stock immediately prior to the Merger.
SECTION 9. CERTIFICATES. At and after the Effective Time, all of the
outstanding certificates which immediately prior thereto represented shares of
LIPH Common Stock shall be deemed for all purposes to evidence ownership of and
to represent the Holdings Membership Interests into which the shares of LIPH
Common Stock represented by such certificates have been converted as herein
provided and shall be so registered on the books and records of the Surviving
Entity or its transfer agent. The registered owner of any such outstanding
certificate shall, until such certificate shall have been surrendered for
transfer or otherwise accounted for to the Surviving Entity or its transfer
agent, have and be entitled to exercise any voting and other rights with respect
to, and to receive any dividends and other distributions upon, the Holdings
Membership Interests, as the case may be, evidenced by such outstanding
certificate, as above provided.
SECTION 10. AMENDMENT. The parties hereto, by mutual consent of
their respective Boards of Directors and Board of Managers, may amend, modify or
supplement this Merger Agreement prior to the Effective Time; provided, however,
that no amendment, modification or supplement may be made after the adoption of
this Merger Agreement by the shareholders of LIPH which changes this Merger
Agreement in a way which, in the judgment of the Board of Directors of LIPH
would have a material adverse effect on the shareholders of LIPH, unless such
amendment, modification or supplement is approved by such shareholders.
SECTION 11. TERMINATION. This Merger Agreement may be terminated,
and the Merger and the other transactions provided for herein may be abandoned,
at any time prior to the Effective
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Time, whether before or after approval of this Merger Agreement by the
shareholders of LIPH, by action of the Board of Directors of LIPH if:
(b) The conditions specified in Section 8 hereof shall not
have been satisfied or waived; or
(c) The Board of Directors of LIPH determines for any
reason, in its sole judgment and discretion, that the consummation of the Merger
would be inadvisable or not in the best interests of LIPH and its shareholders.
SECTION 12. COUNTERPARTS. This Merger Agreement may be executed in
one or more counterparts, and each such counterpart hereof shall be deemed to be
an original instrument, but all such counterparts together shall constitute but
one agreement.
SECTION 13. GOVERNING LAW. This Merger Agreement shall be governed
by and construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, LIPH, Holdings and MergerCo have caused this
Merger Agreement to be executed and delivered as of the date first above
written.
LONG ISLAND PHYSICIAN HOLDINGS CORPORATION
By:
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Name:
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Title:
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MDNY HOLDINGS, LLC
By:
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Name:
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Title:
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MDNY HOLDINGS DELAWARE, INC.
By:
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Name:
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Title:
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