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EXHIBIT (2)-4
PLAN AND AGREEMENT OF MERGER
DATED AS OF NOVEMBER 30, 1996
BY AND AMONG
MEDPARTNERS, INC.,
SA MERGER CORPORATION
AND
DRS. SHEER, XXXXXX AND ASSOCIATES, P.A.
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TABLE OF CONTENTS
PLAN AND AGREEMENT OF MERGER
BY AND AMONG
MEDPARTNERS, INC.,
SA MERGER CORPORATION
AND
DRS. SHEER, XXXXXX AND ASSOCIATES, P.A.
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Parties...................................................................................................1
Recitals..................................................................................................1
Section 1. THE MERGER.....................................................................................2
1.1 The Merger...................................................................................2
1.2 The Closing..................................................................................2
1.3 Effective Time...............................................................................3
1.4 Effect of the Merger.........................................................................3
Section 2. EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS;
EXCHANGE OF CERTIFICATES....................................................................3
2.1 Effect on Capital Stock......................................................................3
2.2 Exchange of Certificates.....................................................................5
2.3 Articles of Incorporation of Surviving Corporation...........................................9
2.4 By-laws of the Surviving Corporation.........................................................9
2.5 Directors and Officers of the Surviving Corporation..........................................9
2.6 Assets, Liabilities, Reserves and Accounts...................................................9
2.7 Corporate Acts of the Subsidiary............................................................10
Section 3. REPRESENTATIONS AND WARRANTIES OF SHEER, XXXXXX..............................................10
3.1 Organization, Existence and Good Standing...................................................10
3.2 Sheer, Xxxxxx Capital Stock.................................................................10
3.3 Foreign Qualifications......................................................................11
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3.4 Power and Authority.........................................................................11
3.5 Sheer, Xxxxxx Financial Information.........................................................12
3.6 Contracts, etc..............................................................................12
3.7 Properties and Assets.......................................................................13
3.8 Legal Proceedings...........................................................................14
3.9 Subsequent Events...........................................................................14
3.10 Accounts Receivable........................................................................15
3.11 Tax Returns................................................................................16
3.12 Employee Benefit Plans; Employment Matters.................................................16
3.13 Compliance with Laws in General............................................................17
3.14 Regulatory Approvals.......................................................................18
3.15 Commissions and Fees.......................................................................18
3.16 Retirement or Re-Acquisition of MedPartners Common Stock...................................18
3.17 Disposition of Assets of Surviving Corporation.............................................19
3.18 Vote Required..............................................................................19
3.19 No Untrue Representations..................................................................19
Section 4. REPRESENTATIONS AND WARRANTIES OF THE SUBSIDIARY..............................................20
4.1 Organization, Existence and Capital Stock...................................................20
4.2 Power and Authority.........................................................................20
4.3 Commissions and Fees........................................................................20
4.4 Legal Proceedings...........................................................................21
Section 5. REPRESENTATIONS AND WARRANTIES OF MEDPARTNERS.................................................21
5.1 Organization, Existence and Good Standing...................................................21
5.2 MedPartners Capitalization..................................................................21
5.3 MedPartners Common Stock....................................................................22
5.4 Subsidiaries and Affiliated Entities........................................................22
5.5 Organization, Existence and Good Standing of MedPartners Subsidiaries and
Other MedPartners Entities.............................................................23
5.6 Foreign Qualifications......................................................................24
5.7 Subsidiary Common Stock.....................................................................24
5.8 Power and Authority.........................................................................24
5.9 MedPartners Public Information............................................................25
5.10 Legal Proceedings..........................................................................26
5.11 Subsequent Events..........................................................................26
5.12 Investment Intent..........................................................................26
5.13 Commissions and Fees.......................................................................27
5.14 Retirement or Re-Acquisition of MedPartners Common Stock...................................27
5.15 Disposition of Assets of Surviving Corporation.............................................27
5.16 No Untrue Representations..................................................................27
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Section 6. ACCESS TO INFORMATION AND DOCUMENTS..........................................................27
6.1 Access to Information.......................................................................27
6.2 Return of Records...........................................................................28
6.3 Effect of Access............................................................................28
Section 7. COVENANTS....................................................................................29
7.1 Preservation of Business....................................................................29
7.2 Material Transactions.......................................................................29
7.3 Meeting of Sheer, Xxxxxx'x Shareholders.....................................................30
7.4 Securities Matters..........................................................................31
7.5 Exemption from State Takeover Laws..........................................................31
7.6 Public Disclosures..........................................................................31
7.7 Resignation of Sheer, Xxxxxx Directors......................................................33
7.8 Notice of Subsequent Events.................................................................33
7.9 No Solicitations............................................................................34
7.10 Other Actions..............................................................................34
7.11 Sheer, Xxxxxx Conversion...................................................................34
7.12 Accounting Methods.........................................................................35
7.13 Pooling and Tax-Free Reorganization Treatment..............................................35
7.14 Affiliate and Pooling Agreements...........................................................35
7.15 Cooperation................................................................................35
7.16 Publication of Combined Results............................................................36
Section 8. TERMINATION, AMENDMENT AND WAIVER............................................................37
8.1 Termination.................................................................................37
8.2 Effect of Termination.......................................................................39
8.3 Amendment...................................................................................39
8.4 Extension; Waiver...........................................................................39
8.5 Procedure for Termination, Amendment, Extension or Waiver...................................40
8.6 Expenses....................................................................................40
Section 9. CONDITIONS TO CLOSING........................................................................40
9.1 Mutual Conditions...........................................................................40
9.2 Conditions to Obligations of MedPartners and the Subsidiary.................................41
9.3 Conditions to Obligations of Sheer, Xxxxxx..................................................46
Section 10. MISCELLANEOUS...............................................................................48
10.1 Nonsurvival of Representations and Warranties..............................................48
10.2 Notices....................................................................................48
10.3 Further Assurances.........................................................................49
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10.4 Indemnification............................................................................49
10.5 Governing Law..............................................................................50
10.6 "Including"................................................................................50
10.7 "Knowledge"................................................................................50
10.8 "Material adverse change" or "material adverse effect".....................................50
10.9 "Hazardous Materials"......................................................................51
10.10 Environmental Laws........................................................................52
10.11 Captions..................................................................................52
10.12 Integration of Exhibits...................................................................52
10.13 Entire Agreement..........................................................................52
10.14 Counterparts..............................................................................52
10.15 Binding Effect............................................................................52
10.16 No Rule of Construction...................................................................52
Testimonium..............................................................................................53
Signatures...............................................................................................53
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PLAN AND AGREEMENT OF MERGER
PLAN AND AGREEMENT OF MERGER ("Plan of Merger"), made and entered into
as of the 30th day of November, 1996, by and among MEDPARTNERS, INC., a Delaware
corporation ("MedPartners"), SA MERGER CORPORATION, a Delaware corporation and
wholly owned subsidiary of MedPartners (the "Subsidiary"), DRS. SHEER, XXXXXX
AND ASSOCIATES, P.A., a Florida professional corporation ("Sheer, Xxxxxx") (the
Subsidiary and Sheer, Xxxxxx being sometimes collectively referred to herein as
the "Constituent Corporations").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of MedPartners, the
Subsidiary and Sheer, Xxxxxx have approved the merger of the Subsidiary, with
and into Sheer, Xxxxxx (the "Merger"), upon the terms and conditions set forth
in this Plan of Merger, whereby each share of Common Stock, par value $1.00 per
share, of Sheer, Xxxxxx (the "Sheer, Xxxxxx Common Stock"), not owned directly
or indirectly by Sheer, Xxxxxx, will be converted into the right to receive the
Merger Consideration (as herein defined) (the Sheer, Xxxxxx Common Stock may be
sometimes hereinafter referred to as the "Sheer, Xxxxxx Shares");
WHEREAS, the principal negotiations with regard to the transactions
contemplated hereby have been conducted by and between Sheer, Xxxxxx on the one
hand and Team Health Group, Inc. ("Team"), a wholly owned subsidiary of
MedPartners, and MedPartners on the other hand;
WHEREAS, each of MedPartners, the Subsidiary and Sheer, Xxxxxx desire
to make certain representations, warranties, covenants and agreements in
connection with the Merger and also to prescribe various conditions to the
Merger.
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WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization under the provisions of Section 368 of
the Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, for accounting purposes, it is intended that the Merger shall
be accounted for as a "pooling of interests".
NOW, THEREFORE, in consideration of the premises, and the mutual
covenants and agreements contained herein, the parties hereto do hereby agree as
follows:
Section 1. THE MERGER.
1.1 The Merger. Upon the terms and conditions set forth in this
Plan of Merger, and in accordance with the General Corporation Law of the
State of Delaware (the "DGCL") and the Florida Business Corporation Act
(the "FBCA"), the Subsidiary shall be merged into Sheer, Xxxxxx, or Sheer,
Xxxxxx, XX (as defined in Section 7.11) at the Effective Time (as defined in
Section 1.3). Following the Effective Time, the separate corporate existence of
the Subsidiary shall cease and Sheer, Xxxxxx shall continue as the surviving
corporation (the "Surviving Corporation") as a business corporation and wholly
owned subsidiary of MedPartners, incorporated under the laws of the State of
Florida under the name Drs. Sheer, Xxxxxx and Associates, Inc. and shall
succeed to and assume all the rights and obligations of the Subsidiary and
Sheer, Xxxxxx in accordance with the DGCL and the FBCA.
1.2 The Closing. The closing of the Merger (the "Closing") will take
place at 10:00 a.m. Central Time on a date to be specified by the parties (the
"Closing Date"), which (subject to satisfaction or waiver of the conditions set
forth in Sections 9.2 and 9.3) shall be no later than the second business day
after satisfaction of the conditions set forth in Section 9.1 (other than
Section 9.1(a)), but in no event later than December 31, 1996, at the offices of
Xxxxxxx, Xxxxxxxxx & Xxxxx, L.L.C., unless another date or place is agreed to in
writing by the parties hereto. The Merger will close in Escrow (the "Escrow
Closing") immediately following the approval of the
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plan of Merger by the shareholders of Sheer, Xxxxxx. In the Escrow Closing, the
Articles of Merger and the Certificate of Merger will be filed with the
respective Secretaries of State of Florida and Delaware on the first business
day following the Escrow Closing. The Merger Consideration (as defined in
Section 2.1(c)) will be deposited with Xxxxx & Xxxxxxx, counsel to Sheer, Xxxxxx
(the "Escrow Agent"). The Merger Consideration will be held by the Escrow Agent
until disbursed in accordance with the Closing Letter attached as Exhibit 1.2.
1.3 Effective Time. Subject to the provisions of this Plan of Merger,
Sheer, Xxxxxx and the Subsidiary shall file a Certificate of Merger (the
"Florida Certificate of Merger") in accordance with the relevant provisions of
the FBCA, and Sheer, Xxxxxx shall file a Certificate of Merger (the "Delaware
Certificate of Merger") executed by Sheer, Xxxxxx in accordance with the
relevant provisions of the DGCL and shall make all other filings or recordings
required under the DGCL and the FBCA and as soon as practicable on or after the
Closing Date. The Merger shall become effective at such time as the Delaware
Certificate of Merger is duly filed with the Delaware Secretary of State and the
Certificate of Merger is duly filed with the Florida Secretary of State, or at
such other time as the Subsidiary and Sheer, Xxxxxx shall agree should be
specified in the Certificates of Merger (the "Effective Time").
1.4 Effect of the Merger. The Merger shall have the effects set
forth in Section 259 of the DGCL and Section 607.1106 of the FBCA.
Section 2. EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS; EXCHANGE OF CERTIFICATES.
2.1 Effect on Capital Stock2.1Effect on Capital Stock. As of the
Effective Time, by virtue of the Merger and without any action on the part of
any holder of shares of Sheer, Xxxxxx Common Stock or any shares of capital
stock of the Subsidiary:
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(a) Subsidiary Common Stock. Each share of capital stock of the
Subsidiary issued and outstanding immediately prior to the Effective Time of the
Merger shall be converted into one issued and outstanding and nonassessable
share of Common Stock of the Surviving Corporation.
(b) Cancellation of Treasury Stock. Each share of Sheer, Xxxxxx Common
Stock that is owned by Sheer, Xxxxxx shall automatically be canceled and retired
and shall cease to exist, and none of the Common Stock, par value $.001 per
share, of MedPartners Common Stock ("MedPartners Common Stock"), cash or other
consideration shall be delivered in exchange therefor.
(c) Conversion of Sheer, Xxxxxx Shares. In the Merger, all of the
Sheer, Xxxxxx Shares (other than Dissenting Shares, if any) shall be converted
into the right to receive that number of shares of MedPartners Common Stock
equal to the Merger Consideration (as defined herein). All such shares of
MedPartners Common Stock shall be fully paid and nonassessable and are
hereinafter sometimes referred to as the "MedPartners Shares". Upon such
conversion, all such Sheer, Xxxxxx Shares shall be canceled and cease to exist,
and each holder thereof shall cease to have any rights with respect thereto
other than the right to receive MedPartners Shares issued in exchange therefor
on the terms provided herein.
"Merger Consideration" means that number of MedPartners Shares (rounded
to the nearest whole share) equal to $49 million divided by the MedPartners
Trading Price. As defined herein, "MedPartners Trading Price" shall mean the
average of the last reported sale price of the MedPartners Common Stock on the
New York Stock Exchange on each of the 15 consecutive trading days ending on
November 27, 1996.
(d) Dissenting Shares. Notwithstanding anything in this Plan of Merger
to the contrary, Sheer, Xxxxxx shares which are not voted in favor of the Merger
("Dissenting Shares") shall not be converted into a right to receive the Merger
Consideration or any cash in lieu of
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fractional shares of MedPartners Common Stock. If, after the Effective Time, a
holder of Dissenting Shares fails to perfect or loses any dissenters' rights,
such shares shall be treated as if they had been converted as of the Effective
Time into the right to receive the Merger Consolidation pursuant to Section
2.1(c) and the cash in lieu of fractional shares of MedPartners Common stock
specified in Section 2.2. It is understood and agreed that in no event shall the
Merger be consummated if greater than 10% of the issued and outstanding Sheer,
Xxxxxx Shares are not voted in favor of the Merger.
(e) Anti-Dilution Provisions. If after the date hereof and prior to the
Effective Time MedPartners shall have declared a stock split (including a
reverse split) of MedPartners Common Stock or a dividend payable in MedPartners
Common Stock, or any other distribution of securities or dividend (in cash or
otherwise) to holders of MedPartners Common Stock with respect to their
MedPartners Common Stock (including without limitation such a distribution or
dividend made in connection with a recapitalization, reclassification, merger,
consolidation, reorganization or similar transaction) then the Merger
Consideration shall be appropriately adjusted to reflect such stock split,
dividend or other distribution of securities.
2.2 Exchange of Certificates. (a) Exchange Agent. In the event that
the outstanding Sheer, Xxxxxx Shares are not exchanged at the Closing, prior
to the Effective Time, MedPartners shall enter into an agreement with First
Chicago Trust Company of New York, New York, New York or such other party as
shall then be acting as the transfer agent for the MedPartners Common Stock
(the "Exchange Agent"), which shall provide that MedPartners shall deposit with
the Exchange Agent as of the Effective Time, for the benefit of the holders of
Sheer, Xxxxxx Shares, for exchange in accordance with this Section 2, through
the Exchange Agent, (i) certificates representing the shares of MedPartners
Common Stock issuable pursuant to Section 2.1 and (ii) cash in an amount equal
to the aggregate amount required to be paid in lieu of fractional interests of
MedPartners Common Stock pursuant to Section 2.2 (such shares of MedPartners
Common Stock, together with any dividends or distributions with respect thereto
with a record date after the Effective Time, and together with the cash
referred to in clause (ii) of
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this Section 2.2(a), being hereinafter referred to as the "Exchange Fund") in
exchange for outstanding Sheer, Xxxxxx Shares.
(b) Exchange Procedures. As soon as reasonably practicable, but no
later than ten business days after the Effective Time, the Exchange Agent shall
mail to each holder of record of a certificate or certificates which immediately
prior to the Effective Time represented outstanding Sheer, Xxxxxx Shares (the
"Certificates") whose shares were converted into the right to receive the Merger
Consideration pursuant to Section 2.1, (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Exchange
Agent and shall be in such form and have such other provisions as MedPartners
may reasonably specify) and (ii) instructions for use in effecting the surrender
of the Certificates in exchange for certificates representing shares of
MedPartners Common Stock. Upon surrender of a Certificate 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 (i)
a certificate representing that number of whole shares of MedPartners Common
Stock which such holder has the right to receive pursuant to the provisions of
this Section 2 and (ii) cash in lieu of any fractional share interest as set
forth in Section 2.2(e), and the Certificate so surrendered shall forthwith be
canceled. In the event of a transfer of ownership of Sheer, Xxxxxx Shares which
is not registered in the transfer records of Sheer, Xxxxxx, a certificate
representing the proper number of shares of MedPartners Common Stock may be
issued to a person other than the person in whose name the Certificate so
surrendered is registered, if such Certificate shall be properly endorsed or
otherwise be in proper form for transfer and the person requesting such payment
shall pay any transfer or other taxes required by reason of the issuance of
shares of MedPartners Common Stock to a person other than the registered holder
of such Certificate or establish to the satisfaction of MedPartners that such
tax has been paid or is not applicable. Until surrendered as contemplated by
this Section 2.2, each Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive upon such surrender the
certificate representing shares of MedPartners Common
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Stock and cash in lieu of any fractional shares of MedPartners Common Stock as
contemplated by this Section 2.2. No interest will be paid or will accrue on any
cash payable in lieu of any fractional shares of MedPartners Common Stock.
Former shareholders of record of Sheer, Xxxxxx shall not be entitled to vote
after the Effective Time at any meeting of MedPartners stockholders the number
of whole shares of MedPartners Common Stock into which their respective Sheer,
Xxxxxx Shares are converted until such holders have exchanged their Certificates
for certificates representing MedPartners Common Stock in accordance with this
Section 2.2.
(c) Distributions with Respect to Unexchanged Shares. No dividends or
other distributions with respect to MedPartners 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 MedPartners Common Stock represented
thereby and no cash payment in lieu of fractional shares shall be paid to any
such holder pursuant to Section 2.2(e) until the surrender of such Certificate
in accordance with this Section 2. Subject to the effect of applicable laws,
following surrender of any such Certificate, there shall be paid to the holder
of the certificate representing whole shares of MedPartners Common Stock issued
in exchange therefor, without interest, (i) at the time of such surrender, the
amount of any cash payable in lieu of a fractional share of MedPartners Common
Stock to which such holder is entitled pursuant to Section 2.2(e) and the amount
of dividends or other distributions with a record date after the Effective Time
theretofore paid with respect to such whole shares of MedPartners Common Stock,
and (ii) 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 MedPartners Common Stock.
(d) No Further Ownership Rights in Sheer, Xxxxxx Shares. All shares of
MedPartners Common Stock issued upon the surrender for exchange of Certificates
in accordance with the terms of this Section 2 (including any cash paid pursuant
to Section 2.2(c) or 2.2(e)) shall be deemed to have been issued (and paid) in
full satisfaction of all rights pertaining to the Sheer, Xxxxxx Shares
theretofore represented by such Certificates. If, after the Effective
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Time, Certificates are presented to the Surviving Corporation or the Exchange
Agent for any reason, they shall be canceled and exchanged as provided in this
Section 2, except as otherwise provided by law.
(e) No Fractional Shares. No certificates or scrip representing
fractional shares of MedPartners Common Stock shall be issued upon the surrender
for exchange of Certificates, and such fractional share interests will not
entitle the owner thereof to vote or to any rights of a stockholder of
MedPartners. Notwithstanding any other provision of this Plan of Merger, each
holder of shares of Sheer, Xxxxxx Common Stock exchanged pursuant to the Merger
who would otherwise have been entitled to receive a fraction of a share of
MedPartners Common Stock (after taking into account all Certificates delivered
by such holder) shall receive, in lieu thereof, cash (without interest) in an
amount equal to such fractional part of a share of MedPartners Common Stock
multiplied by the MedPartners Trading Price.
(f) Termination of Exchange Fund. Any portion of the Exchange Fund
which remains undistributed to the holders of the Certificates for six months
after the Effective Time shall be delivered to MedPartners, upon demand, and any
holders of the Certificates who have not theretofore complied with this Section
2 shall thereafter look only to MedPartners for payment of MedPartners Common
Stock, any cash in lieu of fractional shares of MedPartners Common Stock and any
dividends or distributions with respect to MedPartners Common Stock.
(g) No Liability. None of MedPartners, the Subsidiary, Sheer, Xxxxxx or
the Exchange Agent shall be liable to any person in respect of any shares of
MedPartners Common Stock (or dividends or distributions with respect thereto) or
cash from the Exchange Fund delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law. If any Certificates shall
not have been surrendered prior to the end of the applicable period after the
Effective Time under escheat laws (or immediately prior to such earlier date on
which any shares of MedPartners Common Stock, any cash in lieu of fractional
shares of MedPartners Common Stock or any dividends or distributions with
respect to MedPartners Common Stock in respect of such Certificates would
otherwise escheat to or become the property of any governmental entity), any
such shares, cash, dividends or distributions in
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respect of such Certificates shall, to the extent permitted by applicable law,
become the property of the Surviving Corporation, free and clear of all claims
or interest of any person previously entitled thereto.
(h) Investment of Exchange Fund. The Exchange Agent shall invest any
cash included in the Exchange Fund, as directed by MedPartners, on a daily
basis. Any interest and other income resulting from such investments shall be
paid to MedPartners.
2.3 Articles of Incorporation of Surviving Corporation. The Articles
of Incorporation of Sheer, Xxxxxx, effective immediately following the Effective
Time, in form satisfactory to MedPartners, shall be the Articles of
Incorporation of the Surviving Corporation from and after the Effective Time and
until thereafter amended as provided by law.
2.4 By-laws of the Surviving Corporation. The Bylaws of Sheer, Xxxxxx,
effective immediately following the Effective Time, in form satisfactory to
MedPartners, shall be the By-laws of Sheer, Xxxxxx from and after the Effective
Time and until thereafter altered, amended or repealed in accordance with the
FBCA, the Articles of Incorporation of Sheer, Xxxxxx and said By-laws.
2.5 Directors and Officers of the Surviving Corporation. The directors
and officers of the Subsidiary immediately prior to the Effective Time shall be
the directors and officers of Sheer, Xxxxxx, each to hold office in accordance
with the Articles of Incorporation and By-laws of Sheer, Xxxxxx.
2.6 Assets, Liabilities, Reserves and Accounts. At the Effective Time,
the assets, liabilities, reserves and accounts of each of the Subsidiary and
Sheer, Xxxxxx shall be taken up on the books of Sheer, Xxxxxx at the amounts at
which they respectively shall be carried on the books of said corporations
immediately prior to the Effective Time, except as otherwise set forth
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in this Plan of Merger and subject to such adjustments, or elimination of
intercompany items, as may be appropriate in giving effect to the Merger in
accordance with generally accepted accounting principles.
2.7 Corporate Acts of the Subsidiary. All corporate acts, plans,
policies, approvals and authorizations of the Subsidiary, its stockholder, its
Board of Directors, committees elected or appointed by the Board of Directors,
and all officers and agents, valid immediately prior to the Effective Time,
shall be those of the Surviving Corporation and shall be as effective and
binding thereon as they were with respect to the Subsidiary to the extent not
inconsistent with the terms of this Plan of Merger.
Section 3. REPRESENTATIONS AND WARRANTIES OF SHEER, XXXXXX
Sheer, Xxxxxx hereby represents and warrants to MedPartners and the
Subsidiary as follows:
3.1 Organization, Existence and Good Standing. Sheer, Xxxxxx is a
Florida professional corporation duly organized, validly existing and in good
standing under the laws of the State of Florida. Sheer, Xxxxxx has all necessary
corporate power to own its properties and assets and to carry on its business as
presently conducted. Sheer, Xxxxxx does not, and has not within the two years
immediately preceding the date of this Plan of Merger owned, directly or
indirectly, any shares of MedPartners Common Stock or Common Stock of the
Subsidiary.
3.2 Sheer, Xxxxxx Capital Stock. Sheer, Xxxxxx'x authorized capital
consists of shares of Common Stock, par value $1.00 per share, of which 621.47
shares are issued and outstanding as of the date of this Plan of Merger and no
shares are held in treasury. All of the issued and outstanding Sheer, Xxxxxx
Shares are duly and validly issued, fully paid and nonassessable. Except as set
forth in Exhibit 3.2 to the Disclosure Schedule delivered to MedPartners and the
Subsidiary by Sheer, Xxxxxx at the time of the execution and delivery of
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this Plan of Merger (the "Sheer, Xxxxxx Disclosure Schedule"), there are no
options, warrants, or similar rights granted by Sheer, Xxxxxx or any other
agreements to which Sheer, Xxxxxx is a party providing for the issuance or sale
by it of any additional securities which would remain in effect after the
Effective Time. There is no liability for dividends declared or accumulated but
unpaid with respect to any of the Sheer, Xxxxxx Shares. Sheer, Xxxxxx has not
made any distributions to any holders of Sheer, Xxxxxx Shares or participated in
or effected any issuance, exchange or retirement of Sheer, Xxxxxx Shares, or
otherwise changed the equity interests of holders of Sheer, Xxxxxx Shares in
contemplation of effecting the Merger within the two years immediately preceding
the date of this Plan of Merger. Any Sheer, Xxxxxx Shares that Sheer, Xxxxxx has
re-acquired during the two years immediately preceding the date of this Plan of
Merger have been so re-acquired only for purposes other than "business
combinations", as such term is defined in Accounting Principles Board Opinion
No. 16, as amended ("Business Combinations").
3.4 Foreign Qualifications. Sheer, Xxxxxx is qualified to do business
as a foreign corporation and is in good standing in each jurisdiction where the
nature or character of the property owned, leased or operated by it or the
nature of the business transacted by it makes such qualification necessary,
except where the failure to so qualify would not have a material adverse effect
on its business or operations.
3.5 Power and Authority. Subject to the satisfaction of the conditions
precedent set forth herein, Sheer, Xxxxxx has the corporate power to execute,
deliver and perform this Plan of Merger and all agreements and other documents
executed and delivered or to be executed and delivered by it pursuant to this
Plan of Merger, and, subject to the satisfaction of the conditions precedent set
forth herein has taken all action required by its Articles of Incorporation,
By-laws or otherwise, to authorize the execution, delivery and performance of
this Plan of Merger and such related documents. Except as set forth in Exhibit
3.4 to the Sheer, Xxxxxx Disclosure Schedule, the execution and delivery of this
Plan of Merger does not and, subject to the receipt of required stockholder and
regulatory approvals and any other required third-party consents or
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approvals, the consummation of the Merger will not, violate any provisions of
the Articles of Incorporation or By-laws of Sheer, Xxxxxx or any provisions of,
or result in the acceleration of any obligation under, any mortgage, lien,
lease, agreement, instrument, order, arbitration award, judgment or decree, to
which Sheer, Xxxxxx is a party, or by which it is bound, or violate any
restrictions of any kind to which it is subject which, if violated or
accelerated would have a material adverse effect on Sheer, Xxxxxx. The execution
and delivery of this Plan of Merger has been approved by the Board of Directors
of Sheer, Xxxxxx.
3.5 Sheer, Xxxxxx Financial Information. Exhibit 3.5 to the Sheer,
Xxxxxx Disclosure Schedule contains the financial statements of Sheer, Xxxxxx
for the period ended September 30, 1996, which have been previously delivered to
MedPartners and on which MedPartners has relied in its evaluation of the Merger.
The financial statements, together with the notes thereto reflect all known
liabilities of Sheer, Xxxxxx, fixed or contingent, required to be stated
therein, and present fairly the financial condition of Sheer, Xxxxxx at said
dates and the results of operations and cash flows of Sheer, Xxxxxx for the
periods then ended and have been prepared in accordance with GAAP. The balance
sheet of Sheer, Xxxxxx at September 30, 1996, is herein sometimes referred to as
the "Sheer, Xxxxxx Balance Sheet".
3.6 Contracts, etc. (a) All material contracts, leases, agreements and
arrangements to which Sheer, Xxxxxx is a party are (i) legally valid and binding
upon Sheer, Xxxxxx in accordance with their terms, (ii) in full force and
effect, and (iii) to Sheer, Xxxxxx'x knowledge do not violate any federal, state
or local law, rule, regulation or ordinance, and Sheer, Xxxxxx has provided
MedPartners and the Subsidiary with copies of all such documents. To the
knowledge of Sheer, Xxxxxx, (i) all parties to such contracts, leases,
agreements and arrangements have complied with the material provisions of such
contracts, leases, agreements and arrangements; (ii) no party is in material
default under such contract, lease, agreement or arrangement and no event has
occurred which, but for the passage of time or the giving of notice or both,
would constitute a material default thereunder, except, in each case, where the
invalidity of the lease, contract, agreement or arrangement or the default or
breach thereunder or thereof
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would not, individually or in the aggregate, have a material adverse effect on
Sheer, Xxxxxx; and (iii) Sheer, Xxxxxx has not received any notice of
termination or cancellation, or a request to renegotiate any material contracts,
leases, agreements or arrangements.
(b) Except as set forth in Exhibit 3.6 to the Sheer, Xxxxxx Disclosure
Schedule, no contract or agreement to which Sheer, Xxxxxx is a party will, by
its terms, terminate or become unenforceable as a result of the transactions
contemplated hereby or require any consent from any obligor thereto in order to
remain in full force and effect immediately after the Effective Time, except for
contracts or agreements which, if terminated, would not have a material adverse
effect on Sheer, Xxxxxx. Set forth on Exhibit 3.6 to the Sheer, Xxxxxx
Disclosure Schedule is a list of all material contracts to which Sheer, Xxxxxx
is a party which cannot be terminated on 90 or fewer days notice, without cause.
(c) Except as set forth in Exhibit 3.6 to the Sheer, Xxxxxx Disclosure
Schedule, Sheer, Xxxxxx has not granted any right of first refusal or similar
right in favor of any third party with respect to any material portion of its
properties or assets (excluding liens described in Section 3.7) or entered into
any non-competition agreement or similar agreement restricting its ability to
engage in any business in any location.
3.7 Properties and Assets. Sheer, Xxxxxx owns or leases all of the real
and personal property included in the Sheer, Xxxxxx Balance Sheet (except assets
recorded under capital lease obligations and such property as has been disposed
of during the ordinary course of Sheer, Xxxxxx'x business since the date of the
Sheer, Xxxxxx Balance Sheet), free and clear of any liens, claims, charges,
exceptions or encumbrances, except for those (i) if any, which in the aggregate
are not material and which do not materially affect continued use of such
property, or (ii) which are set forth in Exhibit 3.7 to the Sheer, Xxxxxx
Disclosure Schedule.
3.8 Legal Proceedings. Except as listed in Exhibit 3.8 to the Sheer,
Xxxxxx Disclosure Schedule, there are no actions, suits or proceedings pending
or, to the knowledge of
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Sheer, Xxxxxx, threatened against Sheer, Xxxxxx, at law or in equity, relating
to or affecting Sheer, Xxxxxx, including the Merger. Sheer, Xxxxxx does not know
or have any reasonable grounds to know of any justification for any such action,
suit or proceeding, nor is Sheer, Xxxxxx aware of any facts which would give
rise to litigation or liability which would have a material adverse effect on
Sheer, Xxxxxx.
3.9 Subsequent Events. Except as set forth in Exhibit 3.9 to the Sheer,
Xxxxxx Disclosure Schedule or as contemplated by this Plan of Merger, Sheer,
Xxxxxx has not, since the date of the Sheer, Xxxxxx Balance Sheet:
(a) Incurred any material adverse change.
(b) Discharged or satisfied any material lien or encumbrance,
or paid or satisfied any material obligation or liability (absolute,
accrued, contingent or otherwise) other than (i) liabilities shown or
reflected on the Sheer, Xxxxxx Balance Sheet or (ii) liabilities
incurred since the date of the Sheer, Xxxxxx Balance Sheet in the
ordinary course of business, which discharge or satisfaction would have
a material adverse effect on Sheer, Xxxxxx.
(c) Increased or established any reserve for taxes or any
other liability on its books or otherwise provided therefor which would
have a material adverse effect on Sheer, Xxxxxx, except as may have
been required due to income or operations of Sheer, Xxxxxx since the
date of the Sheer, Xxxxxx Balance Sheet.
(d) Mortgaged, pledged or subjected to any lien, charge or
other encumbrance any of the assets, tangible or intangible, which are
material to the business or financial condition of Sheer, Xxxxxx.
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(e) Sold or transferred any of the assets material to the
consolidated business of Sheer, Xxxxxx, canceled any material debts or
claims or waived any material rights, except in the ordinary course of
business.
(f) Granted any general or uniform increase in the rates of
pay of employees or any material increase in salary payable or to
become payable by Sheer, Xxxxxx to any officer or employee, consultant
or agent (other than normal increases consistent with past practices),
or by means of any bonus or pension plan, contract or other commitment,
increased in a material respect the compensation of any officer,
employee, consultant or agent.
(g) Except for this Plan of Merger and any other agreement
executed and delivered pursuant to this Plan of Merger, entered into
any material transaction other than in the ordinary course of business
or permitted under other Sections of this Plan of Merger.
(h) Issued any stock, bonds or other securities or any
options or rights to purchase any of its securities.
(i) Become aware of any circumstance that would have a
material adverse effect on the operating results or financial condition
of Sheer, Xxxxxx.
3.10 Accounts Receivable. Since the date of the Sheer, Xxxxxx Balance
Sheet, Sheer, Xxxxxx has not changed any principle or practice with respect to
the recordation of accounts receivable or the calculation of reserves therefor,
or any material collection, discount or write-off policy or procedure. To the
knowledge of Sheer, Xxxxxx, Sheer, Xxxxxx is in compliance with the terms and
conditions of all third-party payor arrangements relating to its accounts
receivable, except to the extent that such noncompliance would not have a
material adverse effect on Sheer, Xxxxxx.
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3.11 Tax Returns. Sheer, Xxxxxx has filed all tax returns required to
be filed by it or requests for extensions to file such returns or reports have
been timely filed and granted and have not expired, except to the extent that
such failures to file, taken together, do not have a material adverse effect on
Sheer, Xxxxxx. Sheer, Xxxxxx has made all payments shown as due on such returns.
Sheer, Xxxxxx has not been notified that any tax returns of Sheer, Xxxxxx are
currently under audit by the Internal Revenue Service or any state or local tax
agency and has received no notice of any claimed tax liability of Sheer, Xxxxxx
or any Sheer, Xxxxxx shareholder. No agreements have been made by Sheer, Xxxxxx
for the extension of time or the waiver of the statute of limitations for the
assessment or payment of any federal, state or local taxes.
3.12 Employee Benefit Plans; Employment Matters. (a) Except as set
forth in Exhibit 3.12(a) to the Sheer, Xxxxxx Disclosure Schedule, Sheer, Xxxxxx
has neither established nor maintains nor is obligated to make contributions to
or under or otherwise participate in (i) any bonus or other type of incentive
compensation plan, program or arrangement (whether or not set forth in a written
document), (ii) any pension, profit-sharing, retirement or other plan, program
or arrangement, or (iii) any other employee benefit plan, fund or program,
including, but not limited to, those described in Section 3(3) of ERISA. All
such plans listed in Exhibit 3.12(a) (individually, a "Sheer, Xxxxxx Plan" and
collectively, the "Sheer, Xxxxxx Plans") have been operated and administered in
all material respects in accordance with, as applicable, ERISA, the Code, the
Age Discrimination in Employment Act of 1967, as amended, and the related rules
and regulations adopted by those federal agencies responsible for the
administration of such laws. To the knowledge of Sheer, Xxxxxx, no act or
failure to act by Sheer, Xxxxxx has resulted in a "prohibited transaction" (as
defined in ERISA) with respect to the Sheer, Xxxxxx Plans that is not subject to
a statutory or regulatory exception and that could have a material adverse
effect on Sheer, Xxxxxx. No "reportable event" (as defined in ERISA, but
excluding any event for which notice is waived under the ERISA regulations) has
occurred with respect to any of the Sheer, Xxxxxx Plans which is subject to
Title IV of ERISA. Sheer, Xxxxxx has not previously made, is not currently
making, and is not obligated in any way to make, any
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contributions to any multi-employer plan within the meaning of the
Multi-Employer Pension Plan Amendments Act of 1980.
(b) Except as set forth in Exhibit 3.12(b) to the Sheer, Xxxxxx
Disclosure Schedule, Sheer, Xxxxxx is not a party to any oral or written (i)
union, guild or collective bargaining agreement which agreement covers employees
in the United States (nor is it aware of any union organizing activity currently
being conducted in respect to any of its employees), (ii) agreement with any
executive officer or other key employee the benefits of which are contingent, or
the terms of which are materially altered, upon the occurrence of a transaction
of the nature contemplated by this Plan of Merger and which provides for the
payment of in excess of $25,000, or (iii) agreement or plan, including any stock
option plan, stock appreciation rights plan, restricted stock plan or stock
purchase plan, any of the benefits of which will be increased, or the vesting of
which will be accelerated, by the occurrence of any of the transactions
contemplated by this Plan of Merger or the value of any of the benefits of which
will be calculated on the basis of any of the transactions contemplated by this
Plan of Merger.
3.14 Compliance with Laws in General. Except as set forth in Exhibit
3.13 to the Sheer, Xxxxxx Disclosure Schedule, Sheer, Xxxxxx has not received
any notices of, nor to the best of their knowledge have there been any, material
violations of any federal, state or local laws, regulations or ordinances
relating to its business and operations, including, without limitation, the
Occupational Safety and Health Act, the Americans with Disabilities Act, the
Medicare or applicable Medicaid statutes and regulations, including billing and
coding, and any Environmental Laws, and no notice of any pending inspection or
violation of any such law, regulation or ordinance has been received by Sheer,
Xxxxxx which, if it were determined that a violation had occurred, would have a
material adverse effect on Sheer, Xxxxxx.
3.15 Regulatory Approvals. Except as disclosed in the Sheer, Xxxxxx
Documents or in Exhibit 3.14 to the Sheer, Xxxxxx Disclosure Schedule, Sheer,
Xxxxxx or any affiliated Sheer, Xxxxxx entity, as applicable, holds all
licenses, certificates of need and other regulatory
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approvals required or necessary to be applied for or obtained in connection with
its business as presently conducted or as proposed to be conducted, except where
the failure to obtain such license, certificate of need or regulatory approval
would not have a material adverse effect on Sheer, Xxxxxx. All such licenses,
certificates of need and other regulatory approvals relating to the business,
operations and facilities of Sheer, Xxxxxx and each Sheer, Xxxxxx Subsidiary or
affiliated Sheer, Xxxxxx entity are in full force and effect, except where any
failure of such license, certificate of need or regulatory approval to be in
full force and effect would not have a material adverse effect on Sheer, Xxxxxx.
There is not now and there has never been any litigation concerning such
licenses, certificates of need and regulatory approvals, and all claims and
causes of action raised therein, has been finally adjudicated. No such license,
certificate of need or regulatory approval has been revoked, conditioned (except
as may be customary) or restricted, and no action (equitable, legal or
administrative), arbitration or other process is pending, or to the best
knowledge of Sheer, Xxxxxx, threatened, which in any way challenges the validity
of, or seeks to revoke, condition or restrict any such license, certificate of
need, or regulatory approval.
3.16 Commissions and Fees. Except as set forth on Exhibit 3.15 to the
Sheer, Xxxxxx Disclosure Schedule, there are no valid claims for brokerage
commissions or finder's or similar fees in connection with the transactions
contemplated by this Plan of Merger which may be now or hereafter asserted
against MedPartners resulting from any action taken by Sheer, Xxxxxx or its
officers, Directors or agents, or any of them.
3.17 Retirement or Re-Acquisition of MedPartners Common Stock. Sheer,
Xxxxxx is not a party to any agreement the effect of which would be to require
MedPartners directly or indirectly to retire or re-acquire all or part of the
shares of MedPartners Common Stock issued pursuant to Section 2.1 hereof.
3.18 Disposition of Assets of Surviving Corporation. Sheer, Xxxxxx is
not a party to any plan to dispose of a significant part of the assets of the
Surviving Corporation within two
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years after the Closing Date, other than dispositions in the ordinary course of
business of the Surviving Corporation and dispositions intended to eliminate
duplicate facilities or excess capacity.
3.19 Vote Required. The affirmative vote of the holders of a majority
of the outstanding Sheer, Xxxxxx Shares entitled to vote thereon is the only
vote of the holders of any class or series of Sheer, Xxxxxx capital stock
necessary to approve this Plan of Merger, the Merger and the transactions
contemplated hereby; provided, however, if the approval of the Merger by the
Sheer, Xxxxxx shareholders is to be accomplished by action without a meeting
pursuant to Section 607.0704 of the FBCA, the unanimous written consent of the
Sheer, Xxxxxx shareholders shall be required.
3.19 No Untrue Representations. No representation or warranty by Sheer,
Xxxxxx in this Plan of Merger, and no Exhibit or certificate issued by Sheer,
Xxxxxx and furnished or to be furnished to MedPartners and the Subsidiary
pursuant hereto, or in connection with the transactions contemplated hereby,
contains or will contain any untrue statement of a material fact in response to
the disclosure requested, or omits or will omit to state a material fact
necessary to make the statements or facts contained therein in response to the
disclosure requested not misleading in light of all of the circumstances then
prevailing.
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Section 4. REPRESENTATIONS AND WARRANTIES OF THE SUBSIDIARY
The Subsidiary hereby represents and warrants to Sheer, Xxxxxx as
follows:
4.1 Organization, Existence and Capital Stock. The Subsidiary is a
corporation duly organized and validly existing and is in good standing under
the laws of the State of Delaware. The Subsidiary's authorized capital consists
of 1,000 shares of Common Stock, par value $1.00 per share, all of which shares
are issued and registered in the name of MedPartners. The Subsidiary has not,
within the two years immediately preceding the date of this Plan of Merger,
owned, directly or indirectly, any Sheer, Xxxxxx Shares.
4.2 Power and Authority. The Subsidiary has the corporate power to
execute, deliver and perform this Plan of Merger and all agreements and other
documents executed and delivered, or to be executed and delivered, by it
pursuant to this Plan of Merger, and, subject to the satisfaction of the
conditions precedent set forth herein, has taken all actions required by law,
its Certificate of Incorporation, its By-laws or otherwise, to authorize the
execution and delivery of this Plan of Merger and such related documents. The
execution and delivery of this Plan of Merger does not and, subject to the
receipt of required regulatory approvals and any other required third-party
consents or approvals, the consummation of the Merger contemplated hereby will
not, violate any provisions of the Certificate of Incorporation or Bylaws of the
Subsidiary, or any agreement, instrument, order, judgment or decree to which the
Subsidiary is a party or by which it is bound, violate any restrictions of any
kind to which the Subsidiary is subject, or result in the creation of any lien,
charge or encumbrance upon any of the property or assets of the Subsidiary.
4.3 Commissions and Fees. There are no claims for brokerage
commissions, investment bankers' fees or finder's fees in connection with the
transaction contemplated by this Plan
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of Merger resulting from any action taken by the Subsidiary or any of its
officers, directors or agents.
4.4 Legal Proceedings. There are no actions, suits or proceedings
pending or threatened against the Subsidiary, at law or in equity, relating to
or affecting the Subsidiary, including the Merger. The Subsidiary does not know
or have any reasonable grounds to know of any justification for any such action,
suit or proceeding.
Section 5. REPRESENTATIONS AND WARRANTIES OF MEDPARTNERS
MedPartners hereby represents and warrants to Sheer, Xxxxxx as follows:
5.1 Organization, Existence and Good Standing. MedPartners is a
corporation duly organized and validly existing and is in good standing under
the laws of the State of Delaware. MedPartners has all necessary corporate power
to own its properties and assets and to carry on its business as presently
conducted. MedPartners is not, and has not been within the two years immediately
preceding the date of this Plan of Merger, a subsidiary or division of another
corporation, nor has MedPartners within such time owned, directly or indirectly,
any Sheer, Xxxxxx Shares.
5.2 MedPartners Capitalization. MedPartners has an authorized
capitalization of 9,500,000 shares of Preferred Stock, par value $.001 per
share, of which no shares are issued and outstanding, and no shares are held in
treasury, 500,000 shares of Series C Junior Participating Preferred Stock, par
value $.001 per share, of which no shares are issued and outstanding and no
shares are held in treasury and 200,000,000 shares of Common Stock, par value
$.001 per share, of which 146,208,305 shares were issued and outstanding at
September 13, 1996, and no shares are held in treasury. All of the issued and
outstanding shares of MedPartners Common Stock have been duly and validly issued
and are fully paid and nonassessable. Except as described in Exhibit 5.2 to the
MedPartners Disclosure Schedule
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delivered to Sheer, Xxxxxx at the time of the execution and delivery of this
Plan of Merger (the "MedPartners Disclosure Schedule"), there are no options,
warrants or similar rights granted by MedPartners or any other agreements to
which MedPartners is a party providing for the issuance or sale by it of any
additional securities. There is no liability for dividends declared or
accumulated but unpaid with respect to any shares of MedPartners Common Stock.
MedPartners has not made any distributions to any holder of MedPartners Common
Stock or participated in or effected any issuance, exchange or retirement of
MedPartners Common Stock, or otherwise changed the equity interests of holders
of MedPartners Common Stock, in contemplation of effecting the Merger within the
two years immediately preceding the date of this Plan of Merger. Any shares of
MedPartners Common Stock that MedPartners has re-acquired during the two years
immediately preceding the date of this Plan of Merger have been so re-acquired
only for purposes other than Business Combinations.
5.3 MedPartners Common Stock. On the Closing Date, MedPartners will
have a sufficient number of authorized but unissued shares of its Common Stock
available for issuance to the holders of Sheer, Xxxxxx Shares in accordance with
the provisions of this Plan of Merger. The MedPartners Common Stock to be issued
pursuant to this Plan of Merger will, when so delivered, be (i) duly and validly
issued, fully paid and nonassessable and (ii) listed on the NYSE, upon official
notice of issuance.
5.4 Subsidiaries and Affiliated Entities.
(a) Attached as Exhibit 5.4 to the MedPartners Disclosure Schedule is a
list of all subsidiaries of MedPartners (individually, a "MedPartners
Subsidiary", and collectively, the "MedPartners Subsidiaries") and their states
of incorporation and all professional corporations or professional associations
(the "MedPartners Professional Corporations") of which MedPartners has control
and their states of incorporation.
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(b) Also disclosed in Exhibit 5.4 to the MedPartners Disclosure
Schedule is a list of all general or limited partnerships in which a general
partner is MedPartners, a MedPartners Subsidiary or another partnership
controlled by MedPartners (individually a "MedPartners Partnership" and
collectively, the "MedPartners Partnerships"), and all limited liability
companies in which MedPartners, a MedPartners Subsidiary is a member
(individually, a "MedPartners LLC"; the MedPartners Professional Corporations
and the MedPartners LLCs being collectively called the "Other MedPartners
Entities"), and their states of organization.
(c) Except as set forth in Exhibit 5.4, neither MedPartners nor any
MedPartners Subsidiary owns an equity interest in, nor does such entity control,
directly or indirectly, any other joint venture or partnership.
(d) Although the financial results of the medical groups affiliated
with MedPartners physician practice management business are consolidated for
accounting purposes on the MedPartners Balance Sheet, the terms "MedPartners
Subsidiary" and "Other MedPartners Entity" do not include any affiliated medical
groups.
5.5 Organization, Existence and Good Standing of MedPartners
Subsidiaries and Other MedPartners Entities.
(a) Each MedPartners Subsidiary and each MedPartners Professional
Corporation is a corporation duly organized, validly existing and in good
standing under the laws of its respective state of incorporation. Each
MedPartners Subsidiary and each MedPartners Professional Corporation has all
necessary corporate power to own its properties and assets and to carry on its
business as presently conducted.
(b) Each MedPartners Partnership that is a limited partnership is
validly formed, each MedPartners Partnership that is a general partnership has
been duly organized, and each MedPartners Partnership is in good standing under
the laws of its respective state of organization.
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Each MedPartners Partnership has all necessary power to own its property and
assets and to carry on its business as presently conducted.
(c) Each MedPartners LLC that is a limited company validly formed and
in good standing under the laws of its respective state of organization. Each
MedPartners LLC has all necessary power to own its property and assets and to
carry on its business as presently conducted.
5.6 Foreign Qualifications. MedPartners, each MedPartners Subsidiary,
MedPartners Professional Corporation and each MedPartners LLC is qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
where the nature or character of the property owned, leased or operated by it or
the nature of the business transacted by it makes such qualification necessary,
except where the failure to so qualify would not have a material adverse effect
on MedPartners.
5.7 Subsidiary Common Stock. MedPartners owns, beneficially and of
record, all of the issued and outstanding shares of Common Stock, par value
$1.00 per share, of the Subsidiary (the "Subsidiary Common Stock"), which are
validly issued and outstanding, fully paid and nonassessable, free and clear of
all liens and encumbrances. MedPartners has, or will by the Effective Time have,
taken all such actions as may be required in its capacity as the sole
stockholder of the Subsidiary to approve the Merger.
5.8 Power and Authority. MedPartners has corporate power to execute,
deliver and perform this Plan of Merger and all agreements and other documents
executed and delivered, or to be executed and delivered, by it pursuant to this
Plan of Merger, and, subject to the satisfaction of the conditions precedent set
forth herein has taken all actions required by law, its Certificate of
Incorporation, its By-laws or otherwise, to authorize the execution and delivery
of this Plan of Merger and such related documents. The execution and delivery of
this Plan of Merger does not and, subject to the receipt of required regulatory
approvals and any other
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required third-party consents or approvals, the consummation of the Merger
contemplated hereby will not, violate any provisions of the Certificate of
Incorporation or By-laws of MedPartners, or any provision of, or result in the
acceleration of any obligation under, any mortgage, lien, lease, agreement,
instrument, order, arbitration award, judgment or decree to which MedPartners or
any MedPartners Subsidiary or Other MedPartners Entity is a party or by which it
is bound, or violate any restrictions of any kind to which MedPartners or any
subsidiary is subject. The execution and delivery of this Plan of Merger has
been approved by the Board of Directors of MedPartners.
5.9 MedPartners Public Information. MedPartners has heretofore
furnished Sheer, Xxxxxx with information regarding MedPartners including its
Prospectus dated October 16, 1996 (Registration No. 333-13471) relating to the
resale of 1,221,601 shares of MedPartners Common Stock (the "Prospectus") and
its Quarterly Report for the quarter ended September 30, 1996 ("10-Q") filed
with the Securities and Exchange Commission ("SEC") (as any such documents have
been amended since their original filing, the "MedPartners Documents"). As of
their respective filing dates, the MedPartners Documents did not contain any
untrue statements of material facts or omit to state material facts required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. As of their respective
filing dates, the MedPartners Documents complied in all material respects with
the applicable requirements of the Securities Act and the Securities Exchange
Act of 1934, as amended ("Exchange Act"), and the rules and regulations
promulgated under such statutes. The financial statements contained in the
MedPartners Documents, together with the notes thereto, have been prepared in
accordance with generally accepted accounting principles consistently followed
throughout the periods indicated (except as may be indicated in the notes
thereto, or, in the case of the unaudited financial statements, as permitted by
Form 10-Q), reflect all known liabilities of MedPartners, fixed or contingent,
required to be stated therein, and present fairly the financial condition of
MedPartners at said dates and the consolidated results of operations and cash
flows of MedPartners for the periods then ended. The consolidated balance
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sheet of MedPartners at December 31, 1995, included in the Information Package
is herein sometimes referred to as the "MedPartners Balance Sheet".
5.10 Legal Proceedings. There is no pending or threatened litigation,
governmental investigation, condemnation or other proceeding against or relating
to or affecting MedPartners or the transactions contemplated by this Plan of
Merger for which MedPartners is uninsured or which, if resolved adversely to
MedPartners, would have a material adverse effect on MedPartners and, to the
knowledge of MedPartners, no basis for any such action exists.
5.11 Subsequent Events. Except as set forth in Exhibit 5.11 to the
MedPartners Disclosure Schedule, MedPartners has not, since the date of the
MedPartners Balance Sheet:
(a) Incurred any material adverse change.
(b) Except for this Plan of Merger and any other agreement
executed and delivered pursuant to this Plan of Merger, entered into
any material transaction other than in the ordinary course of business
or permitted under other Sections of this Plan of Merger.
5.14 Investment Intent. MedPartners is acquiring the Sheer, Xxxxxx
Shares hereunder for its own account and not with a view to the distribution or
sale thereof, and MedPartners has no understanding, agreement or arrangement to
sell, distribute, partition or otherwise transfer or assign all or any part of
the Sheer, Xxxxxx Shares to any other person, firm or corporation.
5.13 Commissions and Fees. There are no claims for brokerage
commissions, investment bankers' fees or finder's fees in connection with the
transactions contemplated by this Plan of Merger resulting from any action taken
by MedPartners or any of its officers, directors or agents.
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5.14 Retirement or Re-Acquisition of MedPartners Common Stock.
MedPartners has not agreed directly or indirectly to retire or re-acquire all or
part of the shares of MedPartners Common Stock issued pursuant to Section 2.1
hereof.
5.15 Disposition of Assets of Surviving Corporation. MedPartners does
not intend or plan to dispose of, or to cause the Surviving Corporation to
dispose of, a significant part of the assets of the Surviving Corporation within
two years after the Effective Time, other than dispositions in the ordinary
course of business of the Surviving Corporation and dispositions intended to
eliminate duplicate facilities or excess capacity. After the Effective Time, it
is anticipated that the Surviving Corporation will become a subsidiary of Team,
and it is understood among the parties hereto that no rights or privileges of
the shareholders of Sheer, Xxxxxx will be altered as a result.
5.16 No Untrue Representations. No representation or warranty by
MedPartners in this Plan of Merger, and no Exhibit or certificate issued by
MedPartners and furnished or to be furnished to Sheer, Xxxxxx pursuant hereto,
or in connection with the transactions contemplated hereby, contains or will
contain any untrue statement of a material fact in response to the disclosure
requested, or omits or will omit to state a material fact necessary to make the
statements or facts contained therein in response to the disclosure requested
not misleading in light of all of the circumstances then prevailing.
Section 6. ACCESS TO INFORMATION AND DOCUMENTS
6.1 Access to Information. Between the date hereof and the Closing
Date, Sheer, Xxxxxx will give to MedPartners and its counsel, accountants and
other representatives full access, through a Sheer, Xxxxxx employee designated
by Sheer, Xxxxxx and agreeable to MedPartners or Team, to all the properties,
documents, contracts, personnel files and other records of such party and shall
furnish MedPartners with copies of such documents and with such information with
respect to the affairs of such party as the other party may from time to time
reasonably request. Sheer, Xxxxxx will, subject to applicable laws, disclose and
make available
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to MedPartners and its representatives all books, contracts, accounts, personnel
records, letters of intent, papers, records, communications with regulatory
authorities and other documents relating to the business and operations of
Sheer, Xxxxxx. In addition, Sheer, Xxxxxx shall make available to MedPartners
all such banking, investment and financial information as shall be necessary to
allow for the efficient integration of Sheer, Xxxxxx'x banking, investment and
financial arrangements with those of MedPartners at the Effective Time.
6.2 Return of Records. If the transactions contemplated hereby are not
consummated and this Plan of Merger terminates, each party agrees to promptly
return all documents, contracts, records or properties of the other party and
all copies thereof furnished pursuant to this Section 6 or otherwise. All
information disclosed by any party or any affiliate or representative of any
party shall be deemed to be "Evaluation Material" under the terms of the
Confidentiality Agreement dated February 13, 1996 between Sheer, Xxxxxx and
MedPartners and/or Team Health Group, Inc. (the "Confidentiality Agreement").
6.3 Effect of Access. (a) Nothing contained in this Section 6 shall be
deemed to create any duty or responsibility on the part of either party to
investigate or evaluate the value, validity or enforceability of any contract,
lease or other asset included in the assets of the other party.
(b) With respect to matters as to which any party has made express
representations or warranties herein, the parties shall be entitled to rely upon
such express representations and warranties irrespective of any investigations
made by such parties, except to the extent that such investigations result in
actual knowledge of the inaccuracy or falsehood of particular representations
and warranties.
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Section 7. COVENANTS
7.1 Preservation of Business. Sheer, Xxxxxx will use its reasonable
best efforts to preserve the business organization of Sheer, Xxxxxx intact, to
keep available to MedPartners and the Surviving Corporation the services of the
present employees and independent contractors of Sheer, Xxxxxx, and to preserve
for MedPartners and the Surviving Corporation the goodwill of the suppliers,
customers and others having business relations with Sheer, Xxxxxx.
7.2 Material Transactions. Prior to the Effective Time, Sheer, Xxxxxx
will not (other than as contemplated by the terms of the Plan of Merger and the
related documents, and other than with respect to transactions for which binding
commitments have been entered into prior to the date hereof and transactions
described in Exhibit 7.2 to the Sheer, Xxxxxx Disclosure Schedule which do not
vary materially from the terms set forth on such Exhibit 7.2), without first
obtaining the consent of MedPartners or Team:
(a) Encumber any asset or enter into any transaction or make
any contract or commitment relating to the properties, assets and
business of Sheer, Xxxxxx, (i) which cannot be performed within three
months or less, or (ii) which involves the expenditure of over $10,000.
(b) Enter into any employment contract which is not terminable
upon notice of 30 days or less, at will, and without penalty to Sheer,
Xxxxxx, except as provided herein.
(c) Issue or sell, or agree to issue or sell, any shares of
capital stock or other securities of Sheer, Xxxxxx.
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(d) Make any payment or distribution to the trustee under any
bonus, pension, profit-sharing or retirement plan or incur any
obligation to make any such payment or contribution which is not in
accordance with Sheer, Xxxxxx'x usual past practice, or make any
payment or contributions or incur any obligation pursuant to or in
respect of any other plan or contract or arrangement providing for
bonuses, executive incentive compensation, pensions, deferred
compensation, retirement payments, profit-sharing or the like,
establish or enter into any such plan, contract or arrangement, or
terminate any plan. It is expressly understood by and among the
parties, after consideration of the tax and accounting provisions of
this Plan of Merger, that until the Effective Date, no bonus or other
distribution from Sheer, Xxxxxx to its shareholders or employees shall
be prohibited so long as such distribution does not violate the
provisions set forth in Section 9.2(o) and 9.2(p) hereof.
(e) Extend credit to anyone, except in the ordinary course
of business consistent with prior practices.
(f) Guarantee the obligation of any person, firm or
corporation, except in the ordinary course of business consistent with
prior practices.
(g) Amend its Articles of Incorporation or By-laws.
(h) Take any action of a character described in Section
3.10(a) to 3.10(h), inclusive.
7.3 Meeting of Sheer, Xxxxxx'x Shareholders. Sheer, Xxxxxx will take
all steps necessary in accordance with its Articles of Incorporation and Bylaws
to call, give notice of, convene and hold a meeting of its shareholders (the
"Shareholders Meeting") as soon as practicable after the execution and delivery
of this Plan of Merger, for the purpose of approving
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this Plan of Merger and for such other purposes as may be necessary. Unless this
Plan of Merger shall have been validly terminated as provided herein, the Board
of Directors of Sheer, Xxxxxx (subject to the provisions of Section 8.1(d)
hereof) will (i) recommend to its shareholders the approval of this Plan of
Merger, the transactions contemplated hereby and any other matters to be
submitted to the shareholders in connection therewith, to the extent that such
approval is required by applicable law in order to consummate the Merger, and
(ii) use its reasonable, good faith efforts to obtain the approval by its
shareholders of this Plan of Merger and the transactions contemplated hereby.
Nothing contained herein shall affect the right of Sheer, Xxxxxx'x shareholders
to take action by unanimous written consent in lieu of a meeting to the extent
permitted by applicable law and its Articles of Incorporation and By-laws.
7.4 Securities Matters. (a) MedPartners shall prepare and distribute to
the holders of Sheer, Xxxxxx Shares an information package (the "Information
Package") designed to provide such shareholders with such information as they
shall need about this Plan of Merger and the Merger in order to qualify the
private placement of MedPartners Shares into which the Sheer, Xxxxxx Shares are
to be converted pursuant to this Plan of Merger for the exemption under the
Securities Act provided by Section 4(2) promulgated thereunder. Sheer, Xxxxxx
shall provide MedPartners with such information and documentation as shall be
reasonably requested by MedPartners in order to prepare the Information Package
contemplated by this Section 7.4(a).
(b) The information specifically designated as being supplied by Sheer,
Xxxxxx for inclusion in the Information Package shall not, at the time the Proxy
Statement is first mailed to holders of Sheer, Xxxxxx Shares, at the time of the
Shareholders Meeting and at the Effective Time, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, not misleading. The
information specifically designated as being supplied by Sheer, Xxxxxx for
inclusion in the Proxy Statement shall not, at the date the Proxy Statement (or
any amendment thereof or supplement thereto) is first mailed to holders of
Sheer, Xxxxxx Shares, at the time of the Shareholders Meeting and at the
Effective Time, contain any untrue statement of a material fact or omit to state
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any material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they are
made, not misleading. If at any time prior to the Effective Time any event or
circumstance relating to Sheer, Xxxxxx, or its officers or Directors, should be
discovered by Sheer, Xxxxxx which should be set forth in the Proxy Statement,
Sheer, Xxxxxx shall promptly inform MedPartners.
(c) The information specifically designated as being supplied by
MedPartners for inclusion in the Information Package shall not, at the time the
Proxy Statement is first mailed to holders of Sheer, Xxxxxx Shares, at the time
of the Shareholders Meeting and at the Effective Time, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, not
misleading. The information specifically designated as being supplied by
MedPartners for inclusion in the Proxy Statement to be sent to the holders of
Sheer, Xxxxxx Shares in connection with the Shareholders Meeting shall not, at
the date the Proxy Statement (or any amendment thereof or supplement thereto) is
first mailed to holders of Sheer, Xxxxxx Shares, at the time of the Shareholders
Meeting or at the Effective Time, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, not misleading. If at any
time prior to the Effective Time any event or circumstance relating to
MedPartners or its officers or Directors, should be discovered by MedPartners
which should be set forth in the Proxy Statement, MedPartners shall promptly
inform Sheer, Xxxxxx.
(d) Prior to the Closing Date, MedPartners shall file a Subsequent
Listing Application with the NYSE relating to the shares of MedPartners Common
Stock to be issued in connection with the Merger, and shall cause such shares of
MedPartners Common Stock to be listed on the NYSE, upon official notice of
issuance, prior to the Closing Date.
(e) Sheer, Xxxxxx shall furnish all information to MedPartners with
respect to Sheer, Xxxxxx as MedPartners may reasonably request for inclusion in
the Proxy Statement and shall otherwise cooperate with MedPartners in the
preparation and filing of such documents.
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7.5 Exemption from State Takeover Laws. Sheer, Xxxxxx shall take all
reasonable steps necessary and within its power to exempt the Merger from the
requirements of any state takeover statute or other similar state law which
would prevent or impede the consummation of the transactions contemplated
hereby, by action of Sheer, Xxxxxx'x Board of Directors.
7.6 Public Disclosures. MedPartners and Sheer, Xxxxxx will consult with
each other before issuing any press release or otherwise making any public
statement with respect to the transactions contemplated by this Plan of Merger,
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
requirements of the NYSE. The parties shall issue a joint press release,
mutually acceptable to MedPartners and Sheer, Xxxxxx, promptly upon execution
and delivery of this Plan of Merger.
7.7 Resignation of Sheer, Xxxxxx Directors. On or prior to the Closing
Date, Sheer, Xxxxxx shall deliver to MedPartners evidence satisfactory to
MedPartners of the resignation of the directors and officers of Sheer, Xxxxxx,
such resignations to be effective on the Closing Date.
7.8 Notice of Subsequent Events. Each party hereto shall notify the
other parties of any changes, additions or events of which they have knowledge
which would cause any material change in or material addition to any Exhibit to
its Disclosure Schedule delivered by the notifying party under this Plan of
Merger, promptly after the occurrence of the same. If the effect of such change
or addition would, individually or in the aggregate with the effect of changes
or additions previously disclosed pursuant to this Section 7.8, constitute a
material adverse effect on the notifying party, the non-notifying party may, if
such change or addition has not been ameliorated within ten days after receipt
of such notice, elect to terminate this Plan of Merger. If the non-notifying
party does not give written notice of such termination within such 10-day
period, the non-notifying party shall be deemed to have consented to such change
or addition and shall not be entitled to terminate this Plan of Merger by reason
thereof.
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7.9 No Solicitations. Sheer, Xxxxxx shall not, directly or indirectly,
furnish information and access, in response to unsolicited requests therefor, to
any corporation, partnership, person or other entity or group, or participate in
discussions with such corporation, partnership, person or other entity or group
concerning any proposal to acquire or be acquired by such party upon a merger,
purchase of assets, purchase of or tender offer for shares of its Common Stock
or similar transaction (an "Acquisition Transaction"). Sheer, Xxxxxx shall
notify MedPartners of any unsolicited request for information and access in
connection with a possible Acquisition Transaction involving such party, such
notification to include the identity of such third party and the proposed terms
of such possible Acquisition Transaction.
7.10 Other Actions. Subject to the provisions of Section 7.8 hereof,
none of Sheer, Xxxxxx, MedPartners and the Subsidiary shall knowingly or
intentionally take any action, or omit to take any action, if such action or
omission would, or reasonably might be expected to, result in any of its
representations and warranties set forth herein being or becoming untrue in any
material respect, or in any of the conditions to the Merger set forth in this
Plan of Merger not being satisfied, or (unless such action is required by
applicable law) which would materially adversely affect the ability of Sheer,
Xxxxxx or MedPartners to obtain any consents or approvals required for the
consummation of the Merger without imposition of a condition or restriction
which would have a material adverse effect on the Surviving Corporation or which
would otherwise materially impair the ability of Sheer, Xxxxxx or MedPartners to
consummate the Merger in accordance with the terms of this Plan of Merger or
materially delay such consummation.
7.11 Sheer, Xxxxxx Conversion. It is understood by each of the parties
hereto that (a) Sheer, Xxxxxx or its shareholders shall convert Sheer, Xxxxxx to
a business corporation ("Sheer, Xxxxxx XX") organized under the FBCA immediately
prior to the Effective Time, and (b) accordingly, for all purposes of and under
this Plan of Merger, notwithstanding any other
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provision hereof, Sheer, Xxxxxx XX (and not Sheer, Xxxxxx) shall be the party
participating in the Merger with MedPartners and the Subsidiary.
7.12 Accounting Methods. Neither MedPartners nor Sheer, Xxxxxx shall
change, in any material respect, its methods of accounting in effect at its most
recent fiscal year end, except as required by changes in generally accepted
accounting principles as concurred by such parties' independent accountants.
7.13 Pooling and Tax-Free Reorganization Treatment. Neither MedPartners
nor Sheer, Xxxxxx shall intentionally take or cause any action to be taken,
whether on or before the Effective Time, which would disqualify the Merger as a
"pooling of interests" for accounting purposes or as a "reorganization" within
the meaning of Section 368(a) of the Code.
7.14 Affiliate and Pooling Agreements. MedPartners and Sheer, Xxxxxx
will each use their respective reasonable, good faith efforts to cause each of
their respective directors and executive officers and each of their respective
"affiliates" (within the meaning of Rule 145 under the Securities Act) to
execute and deliver to MedPartners as soon as practicable an agreement in the
form attached hereto as Exhibit 7.14 relating to the disposition of shares of
Sheer, Xxxxxx Common Stock and shares of MedPartners Common Stock held by such
person and the shares of MedPartners Common Stock issuable pursuant to this Plan
of Merger.
7.15 Cooperation. (a) MedPartners and Sheer, Xxxxxx shall together, or
pursuant to an allocation of responsibility agreed to between them, (i)
cooperate with one another in determining whether any filings required to be
made or consents required to be obtained in any jurisdiction prior to the
Effective Time in connection with the consummation of the transactions
contemplated hereby and cooperate in making any such filings promptly and in
seeking to obtain timely any such consents, (ii) use their respective best
efforts to cause to be lifted any injunction prohibiting the Merger, or any part
thereof, or the other transactions contemplated hereby, and
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(iii) furnish to one another and to one another's counsel all such information
as may be required to effect the foregoing actions.
(b) Subject to the terms and conditions herein provided, and unless
this Plan of Merger shall have been validly terminated as provided herein, each
of MedPartners and Sheer, Xxxxxx shall use all reasonable efforts (i) to take,
or cause to be taken, all actions necessary to comply promptly with all legal
requirements which may be imposed on such party (or any subsidiaries or
affiliates of such party) with respect to the Plan of Merger and to consummate
the transactions contemplated hereby, subject to the vote of Sheer, Xxxxxx'x
shareholders described above, and (ii) to obtain (and to cooperate with the
other party to obtain) any consent, authorization, order or approval of, or any
exemption by, any governmental entity and/or any other public or private third
party which is required to be obtained or made by such party or any of its
subsidiaries or affiliates in connection with this Plan of Merger and the
transactions contemplated hereby Each of MedPartners and Sheer, Xxxxxx will
promptly cooperate with and furnish information to the other in connection with
any such burden suffered by, or requirement imposed upon, either of them or any
of their subsidiaries or affiliates in connection with the foregoing.
7.16 Publication of Combined Results. MedPartners agrees to use its
best efforts to publish the combined results of operations of MedPartners and
Sheer, Xxxxxx in its Quarterly Report on Form 10-Q or Annual Report on Form
10-K, whichever is earlier, which shall contain a full calendar month of such
combined results, provided however that such period shall be tolled for such
period as the financial statements required for the preparation of such
financial statements for such publication are not reasonably available to
MedPartners. For purposes of this Section 7.16, the term "publication" shall
have the meaning provided in SEC Accounting Series Release No. 135.
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Section 8. TERMINATION, AMENDMENT AND WAIVER.
8.1 Termination. This Plan of Merger may be terminated
at any time prior to the Effective Time, whether before or after approval of
matters presented in connection with the Merger to the holders of Sheer, Xxxxxx
Common Stock:
(a) by mutual written consent of MedPartners, the Subsidiary
and Sheer, Xxxxxx;
(b) by either MedPartners or Sheer, Xxxxxx:
(i) if, upon a vote at a duly held meeting of shareholders or
any adjournment thereof, or otherwise, any required approval of
the holders of Sheer, Xxxxxx Common Stock shall not have been
obtained;
(ii) if the Merger shall not have been consummated on or
before December 31, 1996, unless the failure to consummate the
Merger is the result of a willful and material breach of this
Plan of Merger by the party seeking to terminate this Plan of
Merger; provided, however, that the passage of such period shall
be tolled for any part thereof (but not exceeding 60 days in the
aggregate) during which any party shall be subject to a nonfinal
order, decree, ruling or action restraining, enjoining or
otherwise prohibiting the consummation of the Merger or the
calling or holding of a meeting of shareholders;
(iii) if any court of competent jurisdiction or other
governmental entity shall have issued an order, decree or ruling
or taken any other action permanently enjoining, restraining or
otherwise prohibiting the
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Merger and such order, decree, ruling or other action shall
have become final and nonappealable;
(iv) in the event of a breach by the other party of any
representation, warranty, covenant or other agreement contained
in this Plan of Merger which (A) would give rise to the failure
of a condition set forth in Section 9.2(a) or (b) or Section
9.3(a) or (b), as applicable, and (B) cannot be or has not been
cured within 30 days after the giving of written notice to the
breaching party of such breach (a "Material Breach") (provided
that the terminating party is not then in Material Breach of any
representation, warranty, covenant or other agreement contained
in this Plan of Merger); or
(v) if either MedPartners or Sheer, Xxxxxx gives notice of
termination pursuant to Section 7.8;
(c) by either MedPartners or Sheer, Xxxxxx in the event that
(i) all of the conditions to the obligation of such party to effect the
Merger set forth in Section 9.1 shall have been satisfied and (ii) any
condition to the obligation of such party to effect the Merger set
forth in Section 9.2 (in the case of MedPartners) or Section 9.3 (in
the case of Sheer, Xxxxxx) is not capable of being satisfied prior to
the end of the period referred to in Section 8.1(b)(ii);
(d) By Sheer, Xxxxxx, if Sheer, Xxxxxx'x Board of Directors
shall have (i) determined, in the exercise of its fiduciary duties
under applicable law, not to recommend the Merger to the holders of
Sheer, Xxxxxx Shares or shall have withdrawn such recommendation or
(ii) approved, recommended or endorsed any Acquisition Transaction (as
defined in Section 7.9) other than this Plan of Merger or (iii)
resolved to do any of the foregoing;
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(e) By either MedPartners or Sheer, Xxxxxx, if the condition
set forth in Section 9.1(e) is not satisfied by December 31, 1996; or
(f) By MedPartners, if holders of greater than 10% of the
Sheer, Xxxxxx Shares shall have given proper demand for payment of the
fair value of such Sheer, Xxxxxx Shares as provided in Section 607.1320
of the FBCA prior to the taking of a vote on the Merger at a meeting of
the shareholders of Sheer, Xxxxxx.
8.2 Effect of Termination. In the event of termination of this Plan of
Merger as provided in Section 8.1, this Plan of Merger shall forthwith become
void and have no effect, without any liability or obligation on the part of any
party, other than the provisions of Sections 6.2 and 8.6, and except to the
extent that such termination results from the willful and material breach by a
party of any of its representations, warranties, covenants or other agreements
set forth in this Plan of Merger.
8.3 Amendment. This Plan of Merger may be amended by the parties at any
time before or after any required approval of matters presented in connection
with the Merger by the holders of Sheer, Xxxxxx Shares.
8.4 Extension; Waiver. At any time prior to the Effective Time, the
parties may (a) extend the time for the performance of any of the obligations or
other acts of the other parties, (b) waive any inaccuracies in the
representations and warranties contained in this Plan of Merger or in any
document delivered pursuant to this Plan of Merger or (c) subject to the proviso
of Section 8.3, waive compliance with any of the agreements or conditions
contained in this Plan of Merger. Any agreement on the part of a party to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. The failure of any party to this
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Plan of Merger to assert any of its rights under this Plan of Merger or
otherwise shall not constitute a waiver of such rights, except as otherwise
provided in Section 7.8.
8.5 Procedure for Termination, Amendment, Extension or Waiver. A
termination of this Plan of Merger pursuant to Section 8.1, an amendment of this
Plan of Merger pursuant to Section 8.3, or an extension or waiver pursuant to
Section 8.4 shall, in order to be effective, require in the case of MedPartners,
the Subsidiary or Sheer, Xxxxxx, action by its Board of Directors or the duly
authorized designee of the Board of Directors.
8.6 Expenses. All costs and expenses incurred in connection with the
Plan of Merger and the transactions contemplated hereby shall be paid by the
party incurring such expense. Sheer, Xxxxxx shall provide MedPartners with
copies of engagement letters for each attorney, accountant, consultant,
investment banking or other person or entity retained by Sheer, Xxxxxx for the
purpose of consummating the Merger. If the Merger is consummated, by reason
thereof, MedPartners will indirectly bear the expenses incurred by Sheer,
Xxxxxx, so long as such expenses relate directly to services performed in
connection with the Merger, so long as such expenses are reasonable and
customary in transactions similar to the Merger and so long as such expenses do
not exceed $1 million. Accordingly, MedPartners shall have the right, on behalf
of Sheer, Xxxxxx, to review rates charged for such services provided to Sheer,
Xxxxxx, to contest any fees charged to Sheer, Xxxxxx and to negotiate the
reduction or limitation of any such fees.
Section 9. CONDITIONS TO CLOSING.
9.1 Mutual Conditions. The respective obligations of each party to
effect the Merger shall be subject to the satisfaction, at or prior to the
Closing Date, of the following conditions (any of which may be waived in writing
by MedPartners, the Subsidiary and Sheer, Xxxxxx):
(a) None of MedPartners, Team, the Subsidiary or Sheer, Xxxxxx
nor any of their respective subsidiaries shall be subject to any order,
decree or
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injunction by a court of competent jurisdiction which (i) prevents or
materially delays the consummation of the Merger or (ii) would impose
any material limitation on the ability of MedPartners effectively to
exercise full rights of ownership of the Common Stock of the Surviving
Corporation or any material portion of the assets or business of
Sheer, Xxxxxx, taken as a whole.
(b) No statute, rule or regulation shall have been enacted by
the government (or any governmental agency) of the United States or any
state, municipality or other political subdivision thereof that makes
the consummation of the Merger and any other transaction contemplated
hereby illegal.
(c) The holders of shares of Sheer, Xxxxxx Common Stock shall
have approved and adopted this Plan of Merger and any other matters
submitted to them in accordance with the provisions of Section 7.3
hereof.
(d) The shares of MedPartners Common Stock to be issued in
connection with the Merger shall have been listed on the NYSE, upon
official notice of issuance, and shall have been issued in transactions
qualified or exempt from registration under applicable securities laws
of such states and territories of the United States as may be required.
(e) The Merger shall qualify for "pooling of interests"
accounting treatment.
9.2 Conditions to Obligations of MedPartners and the Subsidiary. The
obligations of MedPartners and the Subsidiary to consummate the Merger and the
other transactions contemplated hereby shall be subject to the satisfaction, at
or prior to the Closing Date, of the following conditions (any of which may be
waived by MedPartners and the Subsidiary):
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(a) Each of the agreements of Sheer, Xxxxxx to be performed at
or prior to the Closing Date pursuant to the terms hereof shall have
been duly performed in all material respects, and Sheer, Xxxxxx shall
have performed, in all material respects, all of the acts required to
be performed by it at or prior to the Closing Date by the terms hereof.
(b) The representations and warranties of Sheer, Xxxxxx set
forth in Section 3.9 shall be true and correct as of the date of this
Plan of Merger and as of the Closing Date. The representations and
warranties of Sheer, Xxxxxx set forth in this Plan of Merger that are
qualified as to materiality shall be true and correct, and those that
are not so qualified shall be true and correct in all material
respects, as of the date of this Plan of Merger and as of the Closing
as though made at and as of such time, except to the extent such
representations and warranties expressly relate to an earlier date (in
which case such representations and warranties that are qualified as to
materiality shall be true and correct, and those that are not so
qualified shall be true and correct in all material respects, as of
such earlier date); provided, however, that Sheer, Xxxxxx shall not be
deemed to be in breach of any such representations or warranties by
taking any action permitted (or approved by MedPartners) under Section
7.2 or otherwise permitted herein. MedPartners and the Subsidiary shall
have been furnished with a certificate, executed by a duly authorized
officer of Sheer, Xxxxxx, dated the Closing Date, certifying in such
detail as MedPartners and the Subsidiary may reasonably request as to
the fulfillment of the foregoing conditions.
(c) MedPartners and the Subsidiary shall have obtained, or
obtained the transfer of, any licenses and other regulatory approvals
necessary to allow Sheer, Xxxxxx to operate its business, unless the
failure to obtain such transfer or approval would not have a material
adverse effect on Sheer, Xxxxxx.
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(d) MedPartners shall have received an opinion from Xxxxxxx
Xxxxxxxxx & Xxxxx, L.L.C., to the effect that the Merger will
constitute a reorganization within the meaning of Section 368 of the
Code of which opinion may be based upon reasonable representations of
fact provided by officers of MedPartners, Sheer, Xxxxxx and the
Subsidiary.
(e) MedPartners shall have received an opinion from Xxxxx &
Lardner substantially to the effect set forth in Exhibit 9.2(e) hereto.
(f) All consents, authorizations, orders and approvals of (or
filings or registrations with) any governmental commission, board or
other regulatory body required in connection with the execution,
delivery and performance of this Plan of Merger shall have been
obtained or made, except for filings in connection with the Merger and
any other documents required to be filed after the Effective Time.
(g) MedPartners shall have received "Affiliate Letters" as
provided in Section 7.14 herein from each of the affiliates of Sheer,
Xxxxxx.
(h) MedPartners shall have received Investment Letters from
each of the shareholders of Sheer, Xxxxxx substantially in the from of
Exhibit 9.2(h) attached to this Plan of Merger.
(i) Each of the shareholders of Sheer, Xxxxxx shall have
executed and delivered an Indemnification Agreement substantially in
the form of Exhibit 9.2(i) attached to this Plan of Merger indemnifying
MedPartners from undisclosed liabilities.
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(j) Each of the shareholders of Sheer, Xxxxxx shall reaffirm
his investment decision on or after December 9, 1996 but not later than
December 12, 1996, in the form of Exhibit 9.2(j) attached to this Plan
of Merger.
(k) Sheer Xxxxxx shall have obtained the written consent of
each of the following to the transactions contemplated by the Plan of
Merger:
(1) North Bay Medical Center;
(2) University Community Hospital, Inc.;
(3) Manatee Hospitals and Health Systems, Inc.;
(4) One Call Medical, LLC;
(5) Doctor's Care, P.C.;
(6) Goodyear Medical Center;
(7) Riverview Regional Medical Center, Inc.;
(8) Northwest Regional Medical Center, Inc.;
(9) King Palm Partners;
(10) Tampa Medical Arts, Ltd.;
(11) Xxxxxxxx & Xxxxxxxxx, a Florida general partnership;
(12) Abaco Grand Plaza, Inc.,;
(13) Second Land Sales, Inc.;
(14) PresGar Imaging, L.L.C.;
(15) Price, Hoffman, Stone & Associates, M.D.s, P.A.; Radiology
Associates of Clearwater, P.A.; Radiology Associates of
Tampa, P.A.; Radiology Associates, P.A.; and Radiology
Associates of Tarpon Springs, P.A.; and
(16) Northside Bank of Tampa.
(l) Each Sheer, Xxxxxx shareholder and non-shareholder
physician shall have executed, prior to the Closing Date, a new
employment agreement or
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amended employment agreement in form and substance as set forth on
Exhibit 9.2(l).
(m) Sheer, Xxxxxx and Team Physicians of Florida, P.A. shall
have entered into a Services Agreement in form and substance as set
forth on Exhibit 9.2(m).
(n) Each shareholder of Team Physicians of Florida, P.A. shall
have granted irrevocable proxies and options with regard to the shares
of Team Physicians of Florida, P.A. in form and substance as set forth
on Exhibit 9.2(n).
(o) Each shareholder of Sheer, Xxxxxx, prior to the Closing
Date, shall have executed a release with regard to any and all rights
arising under any current Sheer, Xxxxxx employment agreement, benefit
plan, share entitlement plan or other plan created for the benefit of
existing shareholders of Sheer, Xxxxxx with Sheer, Xxxxxx.
(p) The consummation of the Merger shall not violate any law
or restriction to which Sheer, Xxxxxx is subject which, if violated,
would have a material adverse effect on Sheer, Xxxxxx.
(q) The remaining cash and cash equivalents balance of Sheer,
Xxxxxx at Closing shall be not less than the amount necessary to meet
ongoing working capital obligations and in no event less than $1.2
million without the prior written consent of Team.
(r) Distributions to Sheer, Xxxxxx shareholders in excess of
base compensation since September 30, 1996 and prior to the Effective
Time shall not exceed $1.1 million.
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(s) The billing services agreement by and between Sheer,
Xxxxxx and Practice Management Partners shall have been terminated.
9.3 Conditions to Obligations of Sheer, Xxxxxx. The obligations of
Sheer, Xxxxxx to consummate the Merger and the other transactions contemplated
hereby shall be subject to the satisfaction, at or prior to the Closing Date,
of the following conditions (any of which may be waived by Sheer, Xxxxxx):
(a) Each of the agreements of MedPartners and the Subsidiary
to be performed at or prior to the Closing Date pursuant to the terms
hereof shall have been duly performed, in all material respects, and
MedPartners and the Subsidiary shall have performed, in all material
respects, all of the acts required to be performed by them at or prior
to the Closing Date by the terms hereof.
(b) The representation and warranty of MedPartners set forth
in Section 5.11 shall be true and correct as of the date of the Plan of
Merger and as of the Closing Date. The representations and warranties
of MedPartners set forth in this Plan of Merger that are qualified as
to materiality shall be true and correct, and those that are not so
qualified shall be true and correct in all material respects, as of the
date of this Plan of Merger and as of the Closing as though made at and
as of such time, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties that are qualified as to materiality
shall be true and correct, and those that are not so qualified shall be
true and correct in all material respects, as of such earlier date).
Sheer, Xxxxxx shall have been furnished with a certificate, executed by
duly authorized officers of MedPartners and the Subsidiary, dated the
Closing Date, certifying in such detail as Sheer, Xxxxxx may reasonably
request as to the fulfillment of the foregoing conditions.
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(c) Sheer, Xxxxxx shall have received an opinion from Xxxxx &
Lardner to the effect that the Merger will constitute a reorganization
within the meaning of Section 368 of the Code which opinion may be
based upon reasonable representations of fact provided by officers of
MedPartners, Sheer, Xxxxxx and the Subsidiary.
(d) Sheer, Xxxxxx shall have received an opinion from Xxxxxxx
Xxxxxxxxx & Xxxxx, L.L.C., substantially to the effect set forth in
Exhibit 9.3(d) hereto.
(e) All consents, authorizations, orders and approvals of (or
filings or registrations with) any governmental commission, board or
other regulatory body required in connection with the execution,
delivery and performance of this Plan of Merger shall have been
obtained or made, except for filings in connection with the Merger and
any other documents required to be filed after the Effective Time.
(f) Each Sheer, Xxxxxx shareholder and non-shareholder
physician shall have executed, prior to the Closing Date, a new
employment agreement or amended employment agreement in form and
substance as set forth on Exhibit 9.2(j).
(g) Sheer, Xxxxxx and Team Physicians of Florida, P.A. shall
have entered into a Services Agreement in form and substance as set
forth on Exhibit 9.2(k).
Section 10. MISCELLANEOUS.
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10.1 Nonsurvival of Representations and Warranties. None of
the representations and warranties in this Plan of Merger or in any instrument
delivered pursuant to this Plan of Merger shall survive the Effective Time.
10.2 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 MedPartners:
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
with a copy to:
Xxxxxxx, Xxxxxxxxx & Xxxxx, L.L.C.
0000 XxXxxxx Xxxxxxx Xxxxx
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: X. Xxxxxxx XxXxxxxx, Jr., Esq.
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If to Team Health Group, Inc.
H. Xxxx Xxxxxxxxxx, M.D., President
Team Health Group, Inc.
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000
If to Sheer, Xxxxxx:
Drs. Sheer, Xxxxxx and Associates, P.A.
0000 Xxxx Xxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, M.D.
with a copy to:
Xxxxx & Lardner
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention : Xxxxx X. Xxxxxxx, 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.
10.3 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 Plan of Merger.
10.4 Indemnification. MedPartners and the Subsidiary agree
that all rights to indemnification for acts or omissions occurring prior to the
Effective Time now existing in favor of the current or former directors or
officers of Sheer, Xxxxxx as provided in its articles of
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incorporation or by-laws shall survive the Merger and shall continue in full
force and effect in accordance with their terms. The provisions of this Section
10.4 are intended to be for the benefit of, and shall be enforceable by, each
such indemnified party and each such indemnified party's heirs and
representatives.
10.5 Governing Law. This Plan of Merger 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.
10.6 "Including". The word "including", when following any
general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific terms or matters as provided
immediately following the word "including" or to similar items or matters,
whether or not non-limiting language (such as "without limitation", "but not
limited to", or words of similar import) is used with reference to the word
"including" or the similar items or matters, but rather shall be deemed to refer
to all other items or matters that could reasonably fall within the broadest
possible scope of the general statement, term or matter.
10.7 "Knowledge". "To the knowledge", "to the best knowledge,
information and belief", or any similar phrase shall be deemed to refer to the
knowledge of the Chairman of the Board, Chief Executive Officer or Chief
Financial Officer of a party and to include the assurance that such knowledge is
based upon a reasonable investigation, unless otherwise expressly provided.
10.8 "Material adverse change" or "material adverse effect".
"Material adverse change" or "material adverse effect" means, when used in
connection with Sheer, Xxxxxx or MedPartners, any change, effect, event or
occurrence that has, or is reasonably likely to have, individually or in the
aggregate, a material adverse impact on the business or financial position of
such party and its subsidiaries taken as a whole; provided, however, that
"material adverse change" and "material adverse effect" shall be deemed to
exclude the impact of (i) changes in
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generally accepted accounting principles, (ii) changes in applicable law, and
(iii) any changes resulting from any restructuring or other similar charges or
write-offs taken by Sheer, Xxxxxx with the consent of MedPartners; provided,
however, that no such charges or write-offs will be taken if such would
adversely affect pooling-of-interests accounting treatment for the Merger.
Moreover, it shall not be deemed a "material adverse change" or "material
adverse effect" so long as future financial performance shall be consistent with
written representations between the parties in connection with the Merger.
10.9 "Hazardous Materials". The term "Hazardous Materials"
means any material which has been determined by any applicable governmental
authority to be harmful to the health or safety of human or animal life or
vegetation, regardless of whether such material is found on or below the surface
of the ground, in any surface or underground water, airborne in ambient air or
in the air inside any structure built or located upon or below the surface of
the ground or in building materials or in improvements of any structures, or in
any personal property located or used in any such structure, including, but not
limited to, all hazardous substances, imminently hazardous substances, hazardous
wastes, toxic substances, infectious wastes, pollutants and contaminants from
time to time defined, listed, identified, designated or classified as such under
any Environmental Laws (as defined in Section 10.10) regardless of the quantity
of any such material.
10.10 Environmental Laws. The term "Environmental Laws" means
any federal, state or local statute, regulation, rule or ordinance, and any
judicial or administrative interpretation thereof, regulating the use,
generation, handling, storage, transportation, discharge, emission, spillage or
other release of Hazardous Materials or relating to the protection of the
environment.
10.11 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 Plan of Merger.
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10.12 Integration of Exhibits. All Exhibits attached to this
Plan of Merger are integral parts of this Plan of Merger as if fully set forth
herein, and all statements appearing therein shall be deemed disclosed for all
purposes and not only in connection with the specific representation in which
they are explicitly referenced.
10.13 Entire Agreement. This instrument, including all
Exhibits attached hereto and the Confidentiality Agreement contain the entire
agreement of the parties and supersede any and all prior or contemporaneous
agreements between the parties, written or oral, with respect to the
transactions contemplated hereby. 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.
10.14 Counterparts. This Plan of Merger 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.
10.15 Binding Effect. This Plan of Merger 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 Plan of Merger. No party may assign any right or
obligation hereunder without the prior written consent of the other parties.
10.16 No Rule of Construction. The parties acknowledge that
this Plan of Merger was initially prepared by MedPartners, and that all parties
have read and negotiated the language used in this Plan of Merger. The parties
agree that, because all parties participated in negotiating and drafting this
Plan of Merger, no rule of construction shall apply to this Plan of Merger which
construes ambiguous language in favor of or against any party by reason of that
party's role in drafting this Plan of Merger.
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IN WITNESS WHEREOF, MedPartners, the Subsidiary and Sheer, Xxxxxx have
caused this Plan and Agreement of Merger to be executed by their respective duly
authorized officers, all as of the day and year first above written.
MEDPARTNERS, INC.
By
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SA MERGER CORPORATION
By
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DRS. SHEER, XXXXXX AND ASSOCIATES, P.A.
By
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