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EXHIBIT 2.2
Robert Jay Moore (#77495)
Thomas R. Kreller (#161922)
MILBANK, TWEED, HADLEY & McCLOY LLP
601 South Figueroa Street, 30th Floor
Los Angeles, California 90017-5735
Telephone: (213) 892-4000
Telecopy: (213) 629-5063
Reorganization Counsel for
MedPartners Provider Network, Inc.,
Debtor and Debtor in Possession
UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
LOS ANGELES DIVISION
In re ) Case No. LA 99-19256BR
)
MEDPARTNERS PROVIDER ) Chapter 11
NETWORK, INC., a California )
corporation, ) SECOND AMENDED CHAPTER 11 PLAN
) OF MEDPARTNERS PROVIDER
Debtor. ) NETWORK, INC. DATED JULY 7, 2000
)
) Confirmation Hearing:
)
) Date: August 29, 2000
) Time: 10:00 a.m.
) Place: Courtroom 1668
) Edward R. Roybal Federal Bldg.
) 255 E. Temple St.
____________________________________) Los Angeles, California
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TABLE OF CONTENTS
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ARTICLE 1 DEFINITIONS, INTERPRETATION AND RULES OF CONSTRUCTION.........2
A. Definitions...........................................2
1.1 $40 Million LC...................................2
1.2 85% Distribution.................................2
1.3 90% Cash Election................................2
1.4 90% Distribution.................................3
1.5 Administrative Claim.............................3
1.6 Administrative Claims Bar Date...................3
1.7 Allocation Order.................................3
1.8 Allowed Claim or Allowed Interest................3
1.9 Allowed [ ] Claim or Allowed [ ] Interest......3
1.10 Assets..........................................4
1.11 Bankruptcy Code.................................4
1.12 Bankruptcy Court................................4
1.13 Bankruptcy Rules................................4
1.14 Base Effective Date Cash........................4
1.15 Business Day....................................5
1.16 California Operations...........................5
1.17 Cash............................................5
1.18 Chapter 11 Case.................................5
1.19 Claim...........................................5
1.20 Claims Bar Dates................................5
1.21 Claims Monitor..................................5
1.22 Class...........................................5
1.23 Class 3 Subordinated Claims.....................5
1.24 Committee.......................................5
1.25 Company.........................................5
1.26 Confirmation....................................5
1.27 Confirmation Date...............................5
1.28 Confirmation Hearing............................6
1.29 Confirmation Order..............................6
1.30 Consenting MPI Sub..............................6
1.31 Consenting MPP..................................6
1.32 Consenting MPP Subordinated Claims..............6
1.33 Consenting Plan.................................6
1.34 Consenting Plan Released Parties................6
1.35 Consenting Provider.............................6
1.36 Consenting Provider Subordinated Claims.........6
1.37 Creditor........................................7
1.38 Debtor..........................................7
1.39 Debtor in Possession............................7
1.40 Disbursing Agent................................7
1.41 Disclosure Statement............................7
1.42 Disclosure Statement Hearing....................7
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1.43 Disputed Claim or Disputed Interest................7
1.44 Disputed Claim Reserve.............................8
1.45 Effective Date.....................................8
1.46 Effective Date Cash................................8
1.47 Entity.............................................8
1.48 Estate.............................................8
1.49 Estate Distribution................................8
1.50 Examiner Order.....................................8
1.51 File or Filed......................................8
1.52 Final Distribution.................................8
1.53 Final Order........................................8
1.54 Final Preserved Claim..............................9
1.55 Health Care Services...............................9
1.56 Health Care Services Agreement.....................9
1.57 Health Plan........................................9
1.58 Impaired...........................................9
1.59 Initial Estate Distribution........................9
1.60 Interest...........................................9
1.61 Large Variance Creditors...........................9
1.62 Managed Physician Practices........................9
1.63 Management Agreement...............................9
1.64 MedPartners.......................................10
1.65 MedPartners California Account....................10
1.66 MedPartners Funding Commitment........ ...........10
1.67 MedPartners Release...............................10
1.68 MedPartners Released Parties......................10
1.69 MedPartners Subordinated Claims...................10
1.70 MPN...............................................10
1.71 MPN California Account............................10
1.72 MPN Plan Subordinated Claims......................10
1.73 MPN Plan Preserved Claims.........................10
1.74 MPN Plan Release..................................11
1.75 MPN Preserved Claims..............................11
1.76 MPN Provider Claims...............................11
1.77 MPN Provider Release..............................11
1.78 Mullikin Family Trust Secured Claims..............11
1.79 Net Cash Proceeds.................................11
1.80 Operating Reserve.................................11
1.81 Other Secured Claims..............................12
1.82 Other Unsecured Claims............................12
1.83 Person............................................12
1.84 Petition Date.....................................12
1.85 Plan..............................................12
1.86 Plan Stipulation..................................12
1.87 Post-Effective Date Cash..........................12
1.88 Priority Claim....................................13
1.89 Priority Tax Claim................................13
1.90 Pro Rata..........................................13
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1.91 Provider Parties .................................... 13
1.92 Providers ........................................... 13
1.93 Provider Stipulation ................................ 13
1.94 Reconstituted Committee ............................. 13
1.95 Resolved Disputed Claims ............................ 13
1.96 Retro Rate Recoveries ............................... 13
1.97 Revested Debtor ..................................... 14
1.98 Scheduled ........................................... 14
1.99 Schedules............................................ 14
1.100 Secured Claim ....................................... 14
1.101 Secured Tax Claim ................................... 14
1.102 Security ............................................ 14
1.103 Settlement Agreement ................................ 14
1.104 Special Monitor-Examiner ............................ 14
1.105 Stipulated Claims Amount ............................ 14
1.106 Stipulated Estate Value ............................. 14
1.107 Supplemental Estate Distribution .................... 15
1.108 Supplemental Plan Agreement ......................... 15
1.109 Tangible Asset Recoveries ........................... 15
1.110 Taxes ............................................... 15
1.111 Topped Up Effective Date Cash ....................... 15
1.112 Unpaid Administrative Expenses ...................... 15
1.113 Unsecured Claim ..................................... 16
B. Computation of Time .......................................... 16
C. Rules of Interpretation ...................................... 16
ARTICLE 2 CLASSIFICATION AND TREATMENT OF CLASSIFIED CLAIMS AND
INTERESTS............................................ 18
A. General ...................................................... 18
B. Classification ............................................... 18
2.1 Class 1: Secured Claims ............................. 19
2.2 Class 2: Priority Claims ............................ 20
2.3 Class 3: Unsecured Claims ........................... 21
2.4 Class 4: Interests of Holders of MPN Common Stock ... 23
ARTICLE 3 TREATMENT OF UNCLASSIFIED CLAIMS...................................... 24
3.1 Unclassified Claims .......................................... 24
ARTICLE 4 TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED
LEASES .............................................. 26
4.1 Assumption; Assignment ....................................... 26
4.2 Cure Payments; Assurance of Performance ...................... 26
4.3 Objections To Assumption Of Executory Contracts and
Unexpired Leases ............................................. 27
4.4 Rejection .................................................... 28
4.5 Approval Of Rejection; Rejection Damages Claims Bar Date ..... 28
ARTICLE 5 MEANS FOR EXECUTION AND IMPLEMENTATION OF THE PLAN ................... 28
5.1 Vesting of Property of the Estate ............................ 28
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5.2 Business of Revested Debtor......................................................28
5.3 Post-Effective Date Reporting....................................................29
5.4 Management of Revested Debtor....................................................29
5.5 Funding of The Plan..............................................................30
5.6 Draws on $40 Million LC..........................................................31
5.7 Consensual Subordination, Waiver and Release of Certain Claims...................32
5.8 Waivers and Releases by MPN......................................................32
5.9 Limitation of Liability..........................................................33
5.10 Execution of Documents and Corporate Action......................................34
5.11 Exemption From Certain Transfer Taxes............................................34
5.12 Preservation of Rights of Action, Setoffs and Recoupments........................34
5.13 Objections to Claims; Expedited Claims Resolution................................36
5.14 Surrender of Existing Letters of Credit..........................................36
ARTICLE 6 DISTRIBUTIONS ON ACCOUNT OF ALLOWED CLAIMS AND INTERESTS......................................36
A. Distributions Generally...............................................................36
6.1 Distributions by Disbursing Agent................................................36
6.2 Delivery of Distributions in General.............................................37
6.3 Cash Payments....................................................................37
6.4 No De Minimis Distributions......................................................37
6.5 Face Amount......................................................................37
6.6 Undeliverable Distributions......................................................37
6.7 Compliance with Tax Requirements.................................................38
B. Distributions to Classes of Claims....................................................38
6.8 Distribution to Class 1A.........................................................38
6.9 Distribution to Class 1B.........................................................38
6.10 Distribution to Class 1C.........................................................38
6.11 Distribution to Class 2..........................................................39
6.12 Distribution to Class 3..........................................................39
6.13 Disputed Claims Reserves.........................................................44
6.14 Disbursement of Residual Funds to MedPartners....................................45
ARTICLE 7 CONDITIONS TO THE EFFECTIVE DATE..............................................................45
7.1 Conditions to Effective Date.....................................................45
7.2 Termination Of Plan For Failure To Become Effective..............................46
ARTICLE 8 SATISFACTION OF CLAIMS AND TERMINATION OF INTERESTS; INJUNCTION...............................46
ARTICLE 9 MPN PROVIDER RELEASE AND MPN PLAN RELEASE.....................................................47
9.1 Release of MedPartners Released Parties by Provider Upon Receipt of 85%
Distribution...................................................................50
9.2 Mutual Release Between MedPartners and Provider with Respect to all of
Provider's Eligible MPN Provider Claims........................................50
9.3 Mutual Release of Consenting Plans and Provider Upon Receipt of 85%
Distribution or 90% Distribution, As Applicable; Exceptions to Release
of Consenting Plans............................................................52
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9.4 Release of MPN by Consenting Plan Upon Receipt of 85% Distribution ............ 54
9.5 Release of MPN by Consenting Plans Upon Receipt of Final Distribution ......... 55
9.6 Release of MPN by MedPartners Releasing Parties Upon Receipt of 85%
Distribution ................................................................ 55
9.7 Release of MPN by MedPartners Releasing Parties Upon Receipt of Final
Distribution ................................................................ 56
9.8 Further Agreements of Providers and Plans ..................................... 56
9.9 Acknowledgement of Release .................................................... 57
9.10 Other Restrictions Agreed to by Provider ...................................... 58
9.11 Subordination of Other Claims ................................................. 59
9.12 Acknowledgement of Third Party Beneficiary Rights ............................. 59
9.13 Successors and Assigns ........................................................ 59
9.14 No Impairment of Consenting Plan's Rights to Enforce The Supplemental
Plan Agreement or Any Subsequent Settlement Agreement Against MPN ........... 60
9.15 Preservation of Bankruptcy Code Section 503(b) Claims ......................... 60
ARTICLE 10 RETENTION OF JURISDICTION ..................................................................... 60
ARTICLE 11 MISCELLANEOUS PROVISIONS ...................................................................... 62
11.1 Request for Non-Consensual Confirmation ....................................... 62
11.2 Post-Effective Date Oversight Of The Revested Debtor .......................... 62
11.3 Termination of Examiner Order ................................................. 63
11.4 Modification of the Plan ...................................................... 63
11.5 Revocation of the Plan ........................................................ 63
11.6 Amendment of the Settlement Agreement ......................................... 63
11.7 Governing Law ................................................................. 64
11.8 No Admissions ................................................................. 64
11.9 Severability of Plan Provisions ............................................... 64
11.10 Successors and Assigns ........................................................ 64
11.11 Saturday, Sunday or Legal Holiday ............................................. 64
11.12 No Diminishment of MedPartners Funding Commitment ............................. 65
11.13 No Preclusive Effect .......................................................... 65
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EXHIBITS
1. Second Amended And Restated Operations And Settlement Agreement Dated
September 14, 2000.
2. Amended And Restated Supplemental Plan Agreement Dated September 14,
2000.
3. Form of $40 million Letter of Credit.
4. Designation Of Directors Of Revested Debtor.
5. Description Of Expedited Claims Resolution Procedures Available To
Certain Consenting Providers And Consenting Plans.
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INTRODUCTION
MedPartners Provider Network, Inc., a California corporation ("MPN,"
the "Company" or the "Debtor"), proposes this "Second Amended Chapter 11 Plan
of MedPartners Provider Network, Inc. dated July 7, 2000" (the "Plan") for the
resolution and satisfaction of all Claims against and Interests in the Debtor.
This is a liquidating plan pursuant to which all of MPN's Assets are to be
distributed to creditors in accordance with priorities established by the
Bankruptcy Code. This Plan also implements the Settlement Agreement and the
Supplemental Plan Agreement (each as defined herein), which, in general terms,
combine to provide for, among other things: (a) supplemental funds to be made
available by Caremark Rx, Inc., f/k/a MedPartners, Inc., for additional
payments to the consenting holders of eligible Allowed Claims that elect to
participate in the benefits of the Settlement Agreement; and (b) the consensual
subordination by various parties of certain claims in favor of, and to enhance
distributions to, such participating holders of such eligible Allowed Claims.
Accordingly, holders of general unsecured prepetition claims against the Estate
that are or become Allowed Claims will be entitled to receive their respective
Pro Rata share of all funds of the Estate to be distributed under the Plan on
account of such Allowed Claims. To the extent such holders are eligible and
elect to participate in the Settlement Agreement by agreeing to abide by the
terms and conditions of this Plan, those holders will also be entitled to
receive supplemental distributions on account of their claims that are eligible
for the benefits of the MedPartners Funding Commitment (as defined herein).
ELIGIBLE CREDITORS THAT DO NOT ELECT TO PARTICIPATE IN THE SETTLEMENT AGREEMENT
WILL RECEIVE NO SUCH SUPPLEMENTAL DISTRIBUTIONS AND WILL NEITHER PARTICIPATE IN
THE BENEFITS OF THE MEDPARTNERS FUNDING COMMITMENT NOR SHARE IN THE BENEFITS OF
THE CONSENSUAL SUBORDINATIONS GRANTED BY OTHER INTERESTED PARTIES IN ANY MANNER
WHATSOEVER.(1)
The Disclosure Statement for this Plan contains a discussion of the
Debtor's history, business, results of operations, resolution of material
disputes, significant asset sales, financial projections for the liquidation
and distribution of the Debtor's remaining assets and the
--------------------
(1) Copies of the Settlement Agreement and the Supplemental Plan Agreement are
annexed hereto as Exhibits "1" and "2," respectively.
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funds to be made available under the MedPartners Funding Commitment, and a
summary of this Plan. The Debtor urges all holders of Claims and Interests
entitled to vote on the Plan to read the Plan and the Disclosure Statement in
their entirety before voting to accept or reject the Plan. To the extent the
Disclosure Statement is inconsistent with the Plan, the Plan will govern. No
solicitation materials other than the Disclosure Statement and any schedules
and exhibits attached thereto or referenced therein, or otherwise enclosed with
the Disclosure Statement served by the Debtor on interested parties, have been
authorized by the Debtor or the Bankruptcy Court for use in soliciting
acceptances or rejections of the Plan.
ARTICLE 1
DEFINITIONS, INTERPRETATION AND RULES OF CONSTRUCTION
A. DEFINITIONS. In addition to such other terms as are defined in other
sections of the Plan, the following terms (which appear in the Plan as
capitalized terms) shall have the meanings ascribed to them in this Article 1
of the Plan.
1.1 $40 MILLION LC: The letter of credit to be issued by Bank of
America at the request of MedPartners, substantially in the form attached hereto
as Exhibit "3", in the face amount of $40 million, or such lesser amount as may
be ordered by the Bankruptcy Court or agreed to by each of MPN, MedPartners and
the Committee, but in no event shall such face amount be less than $38 million.
1.2 85% DISTRIBUTION: Shall be as defined in Section 6.12.2.5 hereof.
1.3 90% CASH ELECTION: The option available under this Plan to
Consenting Providers that hold Allowed Class 3A Claims to elect to receive a
one-time distribution equal to 90% of the amount of their Allowed Class 3A
Claims, which distribution shall be: (i) in full satisfaction of the MedPartners
Funding Commitment with respect to such Provider; and (ii) made instead and in
lieu of any other distributions otherwise available to such Consenting Provider
under this Plan, including without limitation the 85% Distribution or any
portion thereof, any Supplemental Estate Distributions and any Final
Distributions. A Consenting Provider may select the 90% Cash Election by timely
executing and returning a ballot evidencing such election.
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1.4 90% DISTRIBUTION: The one-time distribution equal to 90% of the
amount of a Consenting Provider's Allowed Class 3A Claims to be made to a
Consenting Provider pursuant to the 90% Cash Election.
1.5 ADMINISTRATIVE CLAIM: A Claim for costs and expenses of
administration of the Chapter 11 Case allowed under Bankruptcy Code section
503(b) or 507(b).
1.6 ADMINISTRATIVE CLAIMS BAR DATE: The first Business Day that is at
least thirty (30) days following the Effective Date.
1.7 ALLOCATION ORDER: The order of the Bankruptcy Court entered on
November 10, 1999 approving MPN's entry into the "Stipulation For Allocation Of
Proceeds From Asset Sales" by and among the Debtor, MedPartners and the
Committee.
1.8 ALLOWED CLAIM OR ALLOWED INTEREST: A Claim against or Interest in
the Debtor to the extent that a proof of such Claim or Interest, as applicable,
was Filed by the Claims Bar Date or is deemed Filed under applicable law or by
reason of an order of the Bankruptcy Court, and as to which: (a) the Debtor or
any other party in interest has not Filed or does not File an objection within a
time fixed by the Bankruptcy Court and the Claim or Interest is not contingent
and is not otherwise a Disputed Claim or Disputed Interest (but only to the
extent that such Claim or Interest is not a Disputed Claim or Disputed
Interest); provided, however, that for purposes of making distributions on
account of Allowed Claims in Class 3A or Class 3B that are Allowed pursuant to
this subsection (a), a Claim is an Allowed Claim to the extent of any excess of
such Claim over all claims, defenses, deductions, offsets or counterclaims
identified by the Debtor in a manner consistent with the Order of the Bankruptcy
Court approving the Supplemental Plan Agreement; (b) the Claim or Interest is
allowed (but only to the extent allowed) by a Final Order; or (c) the Claim or
Interest is allowed (but only to the extent allowed) either under the Plan or
pursuant to a stipulation between MPN and the claimant that is approved by the
Bankruptcy Court.
1.9 ALLOWED [ ] CLAIM OR ALLOWED [ ] INTEREST: An Allowed Claim or
Allowed Interest in the particular category or Class identified.
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1.10 ASSETS: All legal or equitable interests of the Debtor in any
and all real or personal property of any nature, including any real estate,
buildings, structures, improvements, privileges, rights, easements, leases,
subleases, goods, materials, supplies, furniture, fixtures, equipment, work in
process, accounts, chattel paper, cash, deposit accounts, reserves, deposits,
contractual rights, intellectual property rights, Claims, causes of actions and
any other general intangibles, and the proceeds, product, offspring, rents or
profits thereof.
1.11 BANKRUPTCY CODE: Title 11 of the United States Code, as in
effect on the Petition Date and as thereafter amended, as applicable in the
Chapter 11 Case.
1.12 BANKRUPTCY COURT: The United States Bankruptcy Court for the
Central District of California, Los Angeles Division, or if such court ceases
to exercise jurisdiction over the Chapter 11 Case, such court or adjunct
thereof that exercises jurisdiction over the Chapter 11 Case in lieu of the
United States Bankruptcy Court for the Central District of California, Los
Angeles Division.
1.13 BANKRUPTCY RULES: The Federal Rules of Bankruptcy Procedure,
the Local Rules of the Bankruptcy Court for the Central District of California
and the guidelines and requirements of the Officer of the United States
Trustee, as applicable from time to time in the Chapter 11 Case.
1.14 BASE EFFECTIVE DATE CASH: MPN's actual Cash on hand immediately
prior to the Effective Date:
less (a) the initial $4 million realized from Retro Rate Recoveries,
(b) the initial $13 million realized from Tangible Asset
Recoveries, and
(c) the amount of Unpaid Administrative Expenses;
plus the net cash proceeds realized by MPN as a result of the
liquidation of any Assets of the Estate after January 15, 2000
but prior to the Effective Date, other than the initial $4
million realized from Retro Rate Recoveries and the initial $13
million realized from Tangible Asset Recoveries.
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1.15 BUSINESS DAY: Any day other than a Saturday, Sunday or a "legal
holiday" (as such term is defined in Bankruptcy Rule 9006(a)).
1.16 CALIFORNIA OPERATIONS: Shall be as defined in the Settlement
Agreement.
1.17 CASH: Legal tender accepted in the United States of America for
the payment of public and private debts, currently denominated in United States
Dollars.
1.18 CHAPTER 11 CASE: The above-captioned case under chapter 11 of
the Bankruptcy Code pending before the Bankruptcy Court as Case No. LA 99-19256
BR.
1.19 CLAIM: A right of a Creditor against the Debtor, whether or not
asserted or allowed, of the type described in Bankruptcy Code section 101(5), as
construed by Bankruptcy Code section 102(2).
1.20 CLAIMS BAR DATES: The applicable dates set by orders of the
Bankruptcy Court by which proofs of Claim or Interest must have been Filed and
served on the Debtor.
1.21 CLAIMS MONITOR: PricewaterhouseCoopers LLP, in its capacity as
the Claims Monitor designated pursuant to the Settlement Agreement.
1.22 CLASS: A group of Claims or Interests as classified in a
particular class under the Plan pursuant to Bankruptcy Code section 1122.
1.23 CLASS 3 SUBORDINATED CLAIMS: Claims in Class 3C (Consenting
Provider Subordinated Claims), Class 3D (MPN Plan Subordinated Claims), Class 3E
(Consenting MPP Subordinated Claims) and Class 3F (MedPartners Subordinated
Claims).
1.24 COMMITTEE: The Official Committee of Unsecured Creditors
appointed by the United States Trustee in the Chapter 11 Case pursuant to
Bankruptcy Code section 1102(a)(1).
1.25 COMPANY: MedPartners Provider Network, Inc., a California
corporation.
1.26 CONFIRMATION: Entry of the Confirmation Order by the Bankruptcy
Court.
1.27 CONFIRMATION DATE: The date on which the Bankruptcy Court enters
the Confirmation Order on its docket.
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1.28 CONFIRMATION HEARING: The duly noticed hearing held by the
Bankruptcy Court to consider Confirmation of the Plan pursuant to Bankruptcy
Code section 1128, including any continuances thereof.
1.29 CONFIRMATION ORDER: The order of the Bankruptcy Court confirming
the Plan pursuant to Bankruptcy Code section 1129 in a form acceptable to MPN,
the Committee and MedPartners.
1.30 CONSENTING MPI SUB: Shall be as defined in the Supplemental Plan
Agreement.
1.31 CONSENTING MPP: Shall be as defined in the Settlement
Agreement.
1.32 CONSENTING MPP SUBORDINATED CLAIMS: All Claims of the Consenting
MPP's against the Debtor other than MPN Provider Claims.
1.33 CONSENTING PLAN: Shall be as defined in the Settlement
Agreement.
1.34 CONSENTING PLAN RELEASED PARTIES: Shall be as defined in Section
5.8 hereof.
1.35 CONSENTING PROVIDER: A Provider that accepts the benefits of the
Settlement Agreement by timely executing and returning a ballot indicating such
Provider's agreement to be bound by the terms and conditions of the MPN
Provider Release provisions contained in Article 9 hereof; provided, however,
that a Provider's assignee or successor in interest, whether or not a Provider
itself, may become entitled to treatment under this Plan as a Consenting
Provider if and only if both the assignee or successor in interest and the
Provider execute and return a ballot evidencing their agreement to be bound by
the releases and related provisions contained in Article 9 of this Plan. For
purposes of determining whether a Provider is a Consenting Provider, the
execution and return of a ballot shall be "timely" if the executed ballot
indicating such Provider's agreement to be bound by the terms and conditions of
the Plan shall have been received by MPN no later than 5:00 p.m. Pacific time
on the fifteenth (15th) Business Day following the Confirmation Date.
1.36 CONSENTING PROVIDER SUBORDINATED CLAIMS: All Claims of the
Consenting Providers against the Debtor other than MPN Provider Claims.
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1.37 CREDITOR: Any Entity that on the Effective Date holds a Claim
against: (a) the Debtor that arose or is deemed to have arisen before the
Petition Date; or (b) the Estate of a kind specified in Bankruptcy Code
sections 348(d), 502(f), 502(g), 502(h) or 502(i).
1.38 DEBTOR: MedPartners Provider Network, Inc., a California
corporation.
1.39 DEBTOR IN POSSESSION: The Debtor, as debtor in possession in
the Chapter 11 Case.
1.40 DISBURSING AGENT: Any Entity: (a) appointed as Disbursing Agent
pursuant to the Confirmation Order; or following the Effective Date, (b) either
acceptable to MPN and the Reconstituted Committee or approved and appointed by
an Order of the Bankruptcy Court entered after a hearing held upon notice to
MPN, Caremark and the Reconstituted Committee, whose function shall be to
distribute property under the Plan.
1.41 DISCLOSURE STATEMENT: That certain document entitled
"Disclosure Statement to Accompany Second Amended Chapter 11 Plan of MedPartners
Provider Network, Inc. Dated July 7, 2000" Filed in the Chapter 11 Case by the
Debtor, including the schedules and exhibits attached thereto, as it may be
amended, modified or supplemented from time to time.
1.42 DISCLOSURE STATEMENT HEARING: The hearing held pursuant to
Bankruptcy Code section 1125(b) and Bankruptcy Rule 3017(a), including any
continuances thereof, at which the Bankruptcy Court considered the adequacy of
the Disclosure Statement.
1.43 DISPUTED CLAIM OR DISPUTED INTEREST: A Claim or Interest,
respectively, that the Debtor has Scheduled as "disputed," "contingent" or
"unliquidated," or as to which a proof of Claim or Interest has been Filed or
deemed Filed as contingent or as to which an objection has been or may be
timely Filed by the Debtor or any other party in interest entitled to do so,
which objection, if timely Filed, has not been withdrawn or has not been
overruled or denied by a Final Order. Solely for purposes of making
distributions to Consenting Providers in connection with the MedPartners
Funding Commitment, if an objection to a proof of Claim is filed timely, the
Claim shall be deemed not to be a Disputed Claim to the extent of any amount
(1) of such Claim to which the objecting party did not object, or (2) otherwise
authorized by Final Order or pursuant to this Plan.
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1.44 DISPUTED CLAIM RESERVE: Any reserve for Disputed Claims that is
established pursuant to Section 6.13 hereof.
1.45 EFFECTIVE DATE: Except as provided in Section 7.2 hereof, the
later of: (a) the twenty-second (22nd) Business Day following occurrence of the
Confirmation Date; and (b) the first Business Day on which no stay of the
Confirmation Order is in effect and all conditions to the Effective Date set
forth in Section 7.1 of the Plan have been satisfied or, if waivable, waived.
1.46 EFFECTIVE DATE CASH: The sum of: (a) the greater of Topped Up
Effective Date Cash and Base Effective Date Cash; plus (b) amounts realized by
MPN as of the Effective Date from Retro Rate Recoveries and Tangible Asset
Recoveries.
1.47 ENTITY: A Person, an estate, a trust, the United States
Trustee, an official or unofficial committee of creditors or equity holders, a
"governmental unit" as that term is defined in Bankruptcy Code section 101(27),
or any other entity.
1.48 ESTATE: The estate created pursuant to Bankruptcy Code section
541 by the commencement of the Chapter 11 Case.
1.49 ESTATE DISTRIBUTION: Shall be as defined in Section 6.12.2.3
hereof.
1.50 EXAMINER ORDER: The order entered by the Bankruptcy Court on
June 22, 1999 approving the "Stipulation re: Appointment Of Examiner With
Limited Expanded Powers."
1.51 FILE OR FILED: To file, or to have been filed, with the Clerk
of the Bankruptcy Court in the Chapter 11 Case.
1.52 FINAL DISTRIBUTION: Shall be as defined in Section 6.12.2.6
hereof.
1.53 FINAL ORDER: An order or judgment of the Bankruptcy Court or
other court of competent jurisdiction, as entered on its docket, that has not
been reversed, stayed, modified or amended, and as to which (a) the time to
appeal, seek certiorari or move for reconsideration has expired and no appeal,
petition for certiorari or motion for reconsideration, respectively, has been
timely filed, or (b) any appeal, any petition for certiorari or any motion for
reconsideration that has been or may be filed has been resolved by the highest
court (or any other tribunal having
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appellate jurisdiction over the order or judgment) to which the order or
judgment was appealed or from which certiorari or reconsideration was sought.
1.54 FINAL PRESERVED CLAIM: Shall be as defined in the
Supplemental Plan Agreement or any other agreement between MPN and a Consenting
Plan that (a) modifies the Supplemental Plan Agreement as to those parties and
(b) has been approved by Final Order of the Bankruptcy Court.
1.55 HEALTH CARE SERVICES: Any service rendered to, and medical
devices, supplies or products provided to or for the benefit of, an enrollee of
a Health Plan.
1.56 HEALTH CARE SERVICES AGREEMENT: An agreement for the provision
of Health Care Services.
1.57 HEALTH PLAN: Health Care Services plan.
1.58 IMPAIRED: When used with reference to a Claim or an Interest,
"Impaired" shall have the meaning ascribed to it in Bankruptcy Code section
1124.
1.59 INITIAL ESTATE DISTRIBUTION: Shall be as defined in Section
6.12.2.2 hereof.
1.60 INTEREST: When used in the context of holding an equity
security of the Debtor (and not used to denote (i) the compensation paid for
the use of money for a specified time and usually denoted as a percentage rate
of interest on a principal sum of money or (ii) a security interest in
property), "Interest" shall mean an interest or share in, or warrant or right
asserted against, MPN of the type described in the definition of "equity
security" in Bankruptcy Code section 101(16), and shall include all common
stock and all warrants to purchase or subscribe to common stock issued by MPN.
1.61 LARGE VARIANCE CREDITORS. Shall be as defined in Section 5.13
hereof.
1.62 MANAGED PHYSICIAN PRACTICES: Shall be as defined in the
Settlement Agreement.
1.63 MANAGEMENT AGREEMENT: The Amended and Restated MedPartners
Provider Network, Inc. Management Agreement, dated December 31, 1997, between
MPN and MedPartners, as amended by that certain Amendment provided for in
Section 3.2 of the Settlement Agreement.
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<PAGE> 17
1.64 MEDPARTNERS: Caremark Rx, Inc., formerly known as MedPartners,
Inc.
1.65 MEDPARTNERS CALIFORNIA ACCOUNT: The deposit account of
MedPartners into which the Net Cash Proceeds of the sales of the California
Operations, net of the amount allocable to MPN, have been deposited.
1.66 MEDPARTNERS FUNDING COMMITMENT: The agreement of MedPartners,
subject to the terms and conditions of the Settlement Agreement and the
Supplemental Plan Agreement, to be responsible for the satisfaction of
obligations as specified in the Settlement Agreement and the Supplemental Plan
Agreement.
1.67 MEDPARTNERS RELEASE: The release of MPN with respect to MPN
Provider Claims held by MedPartners or any of its affiliates, which release is
contemplated by the Settlement Agreement and the Supplemental Plan Agreement
and provided for in Article 9 of this Plan.
1.68 MEDPARTNERS RELEASED PARTIES. Shall be as defined in Section
5.8 hereof.
1.69 MEDPARTNERS SUBORDINATED CLAIMS: All Claims, other than MPN
Provider Claims, of MedPartners or a Consenting MPI Sub against the Debtor.
1.70 MPN: MedPartners Provider Network, Inc., a California
corporation.
1.71 MPN CALIFORNIA ACCOUNT: The deposit account of MPN into which
the Net Cash Proceeds of the sales of the California Operations allocable to
MPN have been and will be deposited in accordance with the terms of the
Settlement Agreement and the Allocation Order.
1.72 MPN PLAN SUBORDINATED CLAIMS: Shall be as defined in the
Settlement Agreement.
1.73 MPN PLAN PRESERVED CLAIMS: Claims arising in favor of a
Consenting Plan against MPN (i) under a Health Care Services Agreement between
a Consenting Plan and MPN in the ordinary course of business; (ii) in the
ordinary custom and practice between the Consenting Plan and MPN; (iii) that
the Consenting Plan would customarily charge back or seek to recover from an
entity or person that provides or arranges for the provision of Health Care
Services to enrollees of the Consenting Plan; or (iv) that a Consenting Plan
would in the custom
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<PAGE> 18
of the industry be expected to charge back or seek to recover from an entity or
person that provides or arranges for the provision of Health Care Services to
enrollees of a Consenting Plan, with respect to claims that infrequently arise
and do not otherwise fall within (i), (ii) or (iii) above.
1.74 MPN PLAN RELEASE: The release of MPN with respect to MPN
Provider Claims held by Consenting Plans, which release is contemplated by the
Settlement Agreement and the Supplemental Plan Agreement and provided for in
Article 9 of this Plan.
1.75 MPN PRESERVED CLAIMS: Shall be as defined in the Settlement
Agreement.
1.76 MPN PROVIDER CLAIMS: Shall be as defined in the Settlement
Agreement.
1.77 MPN PROVIDER RELEASE: The release by Consenting Providers of
the MedPartners Released Parties and the Consenting Plan Released Parties in
exchange for the payments to be made to Consenting Providers under this Plan,
which release is: (a) contemplated by the Settlement Agreement and the
Supplemental Plan Agreement and provided for in Article 9 of this Plan, and (b)
a prerequisite for a Provider to become a Consenting Provider and thereby
become eligible to share in the benefits of the MedPartners Funding Commitment
to the extent such Provider has claims covered by the MedPartners Funding
Commitment.
1.78 MULLIKIN FAMILY TRUST SECURED CLAIMS: All Secured Claims of the
Mullikin Family Trust arising under, evidenced by or relating to the loan and
security documents entered into in connection with the financing of the
purchase of MPN's real property interests located at 5000 and 5001 Airport
Plaza Drive, Long Beach, California.
1.79 NET CASH PROCEEDS: That portion of the Cash proceeds from the
sale of the California Operations, less sale expenses actually paid to
non-affiliate third parties by MedPartners in connection therewith, to the
extent allocable to MPN pursuant to the Allocation Order. Cash proceeds shall
include proceeds received from promissory notes executed by the purchasers as
consideration for the sale of the California Operations after the Petition Date.
1.80 OPERATING RESERVE: Cash from the Estate to be set aside on the
Effective Date in an amount not to exceed $5 million, which shall be available
and used to pay (a)
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reasonable and necessary post-Effective Date expenses incurred by the Revested
Debtor or for which the Revested Debtor is responsible under this Plan, (b)
Unpaid Administrative Expenses and (c) any Claims arising under Bankruptcy Code
section 503(b) that are or become Allowed pursuant to a Final Order; provided,
however, that any funds remaining in the Operating Reserve after payment in
full of all items identified in (a), (b) and (c) above shall become available
to the Revested Debtor for distribution on account of any other payments
required or permitted to be made under the Plan.
1.81 OTHER SECURED CLAIMS: All Secured Claims against the Debtor
other than Mullikin Family Trust Secured Claims and Secured Tax Claims.
1.82 OTHER UNSECURED CLAIMS: All Unsecured Claims against the Debtor
other than MPN Provider Claims, Consenting Provider Subordinated Claims, MPN
Plan Preserved Claims, MPN Plan Subordinated Claims, Consenting MPP
Subordinated Claims and MedPartners Subordinated Claims.
1.83 PERSON: An individual, a corporation, a limited liability
company, a partnership, an association, a joint stock company, a joint venture,
an unincorporated organization, or a governmental unit of the type described in
Bankruptcy Code section 101(41).
1.84 PETITION DATE: March 11, 1999.
1.85 PLAN: This "Second Amended Chapter 11 Plan of MedPartners
Provider Network, Inc. Dated July 7, 2000" proposed by the Debtor, including
any exhibits and schedules attached hereto, either in its present form or as it
may be amended, modified or supplemented from time to time in accordance with
the provisions of the Plan or the Bankruptcy Code.
1.86 PLAN STIPULATION: That certain "Stipulation re: (a) Payment of
Capitation to and by Debtor and (b) Adequate Protection" attached to the "Order
Granting Motion for Approval of Stipulation; (1) Payment of Capitation to and
by Debtor and (2) Adequate Protection" entered by the Bankruptcy Court on April
29, 1999, as subsequently modified by the Court to add additional Health Plan
signatories.
1.87 POST-EFFECTIVE DATE CASH: (a) Any and all net cash proceeds
realized by MPN after the Effective Date as a result of the liquidation of any
assets of the Estate that are not
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liquidated as of the Effective Date, and (b) any funds released from any
reserve required under the Plan and thereby made available for use by MPN in
its capacity as Revested Debtor.
1.88 PRIORITY CLAIM: Any Claim, other than an Administrative Claim
or a Priority Tax Claim, of a Creditor to the extent such Claim is entitled to
priority pursuant to Bankruptcy Code section 507(a).
1.89 PRIORITY TAX CLAIM: Any Claim entitled to priority pursuant to
Bankruptcy Code section 507(a)(8).
1.90 PRO RATA: Proportionately so that the ratio of the amount of
consideration distributed on account of a particular Allowed Claim to the
amount of the Allowed Claim is the same as the ratio of the amount of
consideration distributed on account of all Allowed Claims of the Class in
which the particular Allowed Claim is included to the amount of all Allowed
Claims of that Class, but in any event the amount of consideration distributed
on account of an Allowed Claim shall not exceed 100% of the amount of the
Allowed Claim.
1.91 PROVIDER PARTIES: A Provider and its successors, predecessors,
subsidiaries, affiliates, heirs and assigns, past and present officers and
directors, shareholders, employees, agents and attorneys.
1.92 PROVIDERS: Hospitals, hospital groups, physicians, physician
groups, medical service providers, laboratories, specialists and
sub-specialists, ancillary providers and other persons, groups and
organizations that provide Health Care Services.
1.93 PROVIDER STIPULATION: That certain "[Amended] Stipulation with
Certain Providers" attached to the "Order Granting Motion for Approval of
Stipulation with Certain Providers and Approving Amended Stipulation; Notice of
Entry" entered by the Bankruptcy Court on April 29, 1999.
1.94 RECONSTITUTED COMMITTEE: The Committee from and after the
Effective Date, as reconstituted pursuant to Section 11.2 hereof.
1.95 RESOLVED DISPUTED CLAIMS: Shall be as defined in Section
6.12.2.3 hereof.
1.96 RETRO RATE RECOVERIES: Net cash proceeds recovered by MPN from
any Health Plan on account of retroactive increases in the rates charged by MPN
to the Health Plans.
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<PAGE> 21
1.97 REVESTED DEBTOR: MPN on and after the Effective Date.
1.98 SCHEDULED: Set forth on the Schedules.
1.99 SCHEDULES: The Schedules of Assets and Liabilities Filed by the
Debtor in accordance with Bankruptcy Code section 521 and Bankruptcy Rule 1007,
as the same may be amended from time to time in accordance with Bankruptcy Rule
1009 prior to the Effective Date.
1.100 SECURED CLAIM: Any Claim of a Creditor secured by a lien on,
security interest in or charge against property of the Estate or that is
subject to setoff under Bankruptcy Code section 553, to the extent of the value
of such Creditor's interest in the Estate's interest in such property or to the
extent of the amount subject to setoff, as applicable, as determined pursuant
to Bankruptcy Code section 506(a).
1.101 SECURED TAX CLAIM: A Claim of any governmental unit that is
secured by a lien on or other interest in property owned by the Debtor by
operation of applicable law, including every such Claim for unpaid real and
personal property taxes.
1.102 SECURITY: Any instrument issued by, or interest in, MPN of the
type described in Bankruptcy Code section 101(49).
1.103 SETTLEMENT AGREEMENT: The "Second Amended and Restated
Operations and Settlement Agreement Dated September 14, 2000," substantially in
the form annexed hereto as Exhibit "1."
1.104 SPECIAL MONITOR-EXAMINER: Shall be as defined in the
Settlement Agreement.
1.105 STIPULATED CLAIMS AMOUNT: For purposes of making distributions
from the Estate and calculating reserves thereon, as of the Effective Date, a
maximum $80 million aggregate amount for all Claims in Class 3, whether Allowed
or Disputed as of the Effective Date, that are entitled to the benefits of the
MedPartners Funding Commitment, whether asserted by Consenting Providers or
Consenting Plans.
1.106 STIPULATED ESTATE VALUE: For purposes of making distributions
from the Estate and calculating reserves thereon as of the Effective Date, a
minimum $38 million value of MPN's Estate as of the Effective Date; provided,
however, that the $38 million value shall be
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<PAGE> 22
reduced on a dollar-for-dollar basis to the extent that, as of the Effective
Date (i) MPN has realized less than $4 million from Retro Rate Recoveries, and
(ii) Tangible Asset Recoveries realized by MPN and the net appraised value of
Tangible Assets for which sales have not yet closed is less than $13 million
in the aggregate.
1.107 SUPPLEMENTAL ESTATE DISTRIBUTION: Shall be as defined in
Section 6.12.2.3 hereof.
1.108 SUPPLEMENTAL PLAN AGREEMENT: That certain "Amended and
Restated Supplemental Plan Agreement dated September 14, 2000," between and
among MPN, MedPartners, each Consenting Plan, each Consenting MPI Sub and each
Consenting MPP substantially in the form annexed hereto as Exhibit "2."
1.109 TANGIBLE ASSET RECOVERIES: Net cash proceeds realized by MPN
on or after January 17, 2000 from: (a) the disposition by MPN of its real
property and leasehold interests located at 5000 and 5001 Airport Plaza Drive,
Long Beach, California; and (b) the disposition by MedPartners Aviation, Inc.,
MPN's wholly owned subsidiary ("MAI"), of MAI's aircraft and hanger assets.
1.110 TAXES: All income, gaming, franchise, excise, sales, use,
employment, withholding, property, payroll or other taxes, assessments, or
governmental charges, together with any interest, penalties, additions to tax,
fines, and similar amounts relating thereto, imposed or collected by any
federal, state, local or foreign governmental authority.
1.111 TOPPED UP EFFECTIVE DATE CASH: To the extent applicable, MPN's
Cash on hand immediately following receipt of funds to be provided by
MedPartners in an amount equal to the amount, if any, by which Base Effective
Date Cash is less than $25,699,855.
1.112 UNPAID ADMINISTRATIVE EXPENSES: The sum of (a) Allowed
administrative expenses (including Allowed post-petition MPN Provider Claims
and Allowed post-petition professional fees) payable on or before the Effective
Date, and (b) professional fees and expenses payable on or before the Effective
Date in accordance with the Bankruptcy Court's interim fee procedures order in
effect during the course of the Chapter 11 Case, in each case to the extent
such amounts remain unpaid immediately prior to the Effective Date.
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1.113 UNSECURED CLAIM: Any Claim against the Debtor, excluding
Administrative Claims, Priority Tax Claims, Priority Claims and Secured Claims.
B. COMPUTATION OF TIME. In computing any period of time prescribed or allowed
by the Plan, unless otherwise expressly provided, the provisions of Bankruptcy
Rule 9006(a) shall apply.
C. RULES OF INTERPRETATION.
1. The provisions of the Plan shall control over the contents of the
Disclosure Statement. The provisions of the Confirmation Order shall control
over the contents of the Plan.
2. To the extent the Settlement Agreement is inconsistent with the
Plan, the Plan will govern.
3. To the extent the Plan is inconsistent with the Supplemental Plan
Agreement, the Supplemental Plan Agreement will govern. In addition, the
provisions of the Supplemental Plan Agreement shall govern the rights, benefits,
treatment, releases given by and Claims for the benefit of the Consenting Plans,
and, to the extent any such provision relates to MPN, such provision is
incorporated into this Plan.
4. For the purposes of the Plan:
(a) whenever from the context it is appropriate, each term,
whether stated in the singular or the plural, shall include both the
singular and the plural;
(b) any reference in the Plan to a contract, instrument,
release or other agreement or document being in a particular form or on
particular terms and conditions means that such document shall be
substantially in such form or substantially on such terms and
conditions; provided, however, that any change to such form, terms or
conditions that is material to a party to such document shall not be
modified without such party's consent unless such document expressly
provides otherwise;
(c) any reference in the Plan to an existing document,
exhibit or schedule Filed or to be Filed means such document, exhibit
or schedule, as it may have been or may be amended, modified or
supplemented as of the Effective Date;
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<PAGE> 24
(d) unless otherwise specified, all references in the Plan to
"Sections," "Articles," "Exhibits" and "Schedules" are references to
Sections, Articles, Exhibits and Schedules of or to the Plan;
(e) the words "herein," "hereof," "hereto," "hereunder" and
others of similar import refer to the Plan in its entirety rather than
to only a particular portion of the Plan;
(f) captions and headings to Articles and Sections are
inserted for convenience of reference only and are not intended to be
part or to affect interpretations of the Plan; and
(g) any term used in the Plan that is not defined in the
Plan, but that is used in the Bankruptcy Code or the Bankruptcy Rules,
has the meaning ascribed to such term in the Bankruptcy Code or the
Bankruptcy Rules, as applicable, and the rules of construction set
forth in Bankruptcy Code section 102 shall apply, except to the extent
inconsistent with the provisions of this Section C.4.
(h) the word "including" means "including without
limitation."
5. Whenever a distribution of property is required to be made on a
particular date, the distribution shall be made on such date or as soon as
reasonably practicable thereafter.
6. To the extent they pertain to MPN, all Exhibits to the Plan are
incorporated into the Plan and shall be deemed to be included in the Plan,
regardless of when they are filed.
7. Subject to the provisions of any contract, certificate, bylaws,
instrument, release or other agreement or document entered into in connection
with the Plan, the rights and obligations arising under the Plan shall be
governed by, and construed and enforced in accordance with, federal law,
including the Bankruptcy Code and Bankruptcy Rules.
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ARTICLE 2
CLASSIFICATION AND TREATMENT OF CLASSIFIED CLAIMS AND INTERESTS
A. GENERAL. The following is a designation of the Classes of Claims and
Interests under the Plan. In accordance with Bankruptcy Code section 1123
(a)(1), Administrative Claims and Priority Tax Claims have not been classified
and are excluded from the following Classes(2). A Claim or Interest is: (a)
classified in a particular Class only to the extent that the Claim or Interest
qualifies within the description of that Class; and (b) classified in another
Class or Classes to the extent that any remainder of the Claim or Interest
qualifies within the description of such other Class or Classes.
B. CLASSIFICATION. Claims and Interests are classified for all purposes,
including voting, Confirmation and distribution pursuant to the Plan. The
following summary chart is for the convenience of the parties and is superseded
for all purposes by the classification, description and treatment of Claims and
Interests immediately following such summary chart.
SUMMARY
<TABLE>
<CAPTION>
Class Treatment Voting Status
----- --------- -------------
<S> <C> <C>
Class 1: Secured Claims
1A: Mullikin Family Trust Secured Claims Not Impaired Deemed to Accept
1B: Secured Tax Claims Impaired Entitled to Vote
1C: Other Secured Claims Not Impaired Deemed to Accept
Class 2: Priority Claims Impaired Entitled to Vote
Class 3: Unsecured Claims Without Priority
3A: MPN Provider Claims Impaired Entitled to Vote
3B: MPN Plan Preserved Claims Impaired Entitled to Vote
3C: Consenting Provider Subordinated Claims Impaired Entitled to Vote
3D: MPN Plan Subordinated Claims Impaired Entitled to Vote
</TABLE>
----------------
(2) The treatment of Administrative Claims and Priority Tax Claims is
provided in Article 3 below.
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<PAGE> 26
<TABLE>
<CAPTION>
Class Treatment Voting Status
----- --------- -------------
<S> <C> <C>
3E: Consenting MPP Subordinated Claims Impaired Entitled to Vote
3F: MedPartners Subordinated Claims Impaired Entitled to Vote
3G: Other Unsecured Claims Impaired Entitled to Vote
Class 4: Interests of Holders of Common Stock Not Impaired Deemed to Accept
</TABLE>
2.1 CLASS 1: SECURED CLAIMS.
A. CLASS 1A: Class 1A consists of all Mullikin Family
Trust Claims. Class 1A is not Impaired under the Plan. On the Effective Date,
at the Revested Debtor's option, holders of Allowed Secured Claims in Class 1A
shall receive one (1) of the following alternative treatments:
(i) the holder of such Claim shall be treated in
accordance with the terms and conditions of all agreements or instruments
evidencing such Claim and the legal, equitable, or contractual rights to which
each holder of such Claim is entitled shall not otherwise be altered; or
(ii) (a) any default other than a default of the kind
specified in Bankruptcy Code section 365(b)(2), shall be cured or reinstated;
(b) the maturity of the Claims shall be
reinstated as such maturity existed before any default; and
(c) the other legal, equitable or contractual
rights to which the holder of the Claims is entitled shall not otherwise be
altered.
B. CLASS 1B: Class 1B consists of all Secured Tax
Claims. Each holder of a Secured Tax Claim shall be considered to be in its own
separate subclass within Class 1B, and each such subclass shall be deemed to be
a separate Class for purposes of this Plan. Class 1B is Impaired under the
Plan.
Each Allowed Secured Tax Claim shall be paid in full in Cash
upon the latest of: (i) the Effective Date, or as soon thereafter as
practicable; (ii) such date as may be fixed by the Bankruptcy Court, or as soon
thereafter as practicable; (iii) the tenth (10th) Business
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<PAGE> 27
Day after such claim is Allowed, or as soon thereafter as practicable; (iv) the
date on which such Secured Tax Claim is scheduled to be paid in the ordinary
course of business under applicable law or regulation; and (v) such date as the
holder of such Claim and the Debtor or Revested Debtor have agreed or shall
agree.
C. CLASS 1C: Class 1C consists of all Other Secured
Claims. Each holder of an Other Secured Claim shall be considered to be in its
own separate subclass within Class 1C, and each such subclass shall be deemed
to be a separate Class for purposes of this Plan. Class 1C is not Impaired
under the Plan.
On the Effective Date, at the Revested Debtor's option, the
holder of any Allowed Secured Claims in Class 1C shall receive one (1) of the
following alternative treatments:
(i) the holder of such Claim shall be treated in
accordance with the terms and conditions of all agreements or instruments
evidencing such Claim and the legal, equitable, or contractual rights to which
each holder of such Claim is entitled shall not otherwise be altered;
(ii) (a) any default other than a default of the kind
specified in Bankruptcy Code section 365(b)(2), shall be cured or reinstated;
(b) the maturity of the Claims shall be
reinstated as such maturity existed before any default; and
(c) the other legal, equitable or contractual
rights to which the holder of the Claims is entitled shall not otherwise be
altered; or
(iii) on the Effective Date, the holder of such Claim shall
receive, on account of such Claim, Cash equal to its Allowed Secured Claim, or
such lesser amount to which the holder of such Claim shall agree, in full
satisfaction and release of such Claim.
2.2 CLASS 2: PRIORITY CLAIMS. Class 2 consists of all Unsecured
Claims against the Debtor that are entitled to priority under Bankruptcy Code
sections 507(a)(3), 507(a)(4) or 507(a)(6). Class 2 is Impaired under the Plan.
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Each holder of an Allowed Priority Claim shall be paid the full amount
of its Allowed Priority Claim in Cash on the Effective Date (or as soon as
practicable after the date on which any such Claim becomes an Allowed Claim if
such date is later than the Effective Date).
2.3 CLASS 3: UNSECURED CLAIMS. Class 3 consists of all Unsecured
Claims against the Debtor, including the following categories of Claims (with a
parenthetical denoting each such category's sub-classification within Class 3):
MPN Provider Claims (Class 3A); MPN Plan Preserved Claims (Class 3B);
Consenting Provider Subordinated Claims (Class 3C); MPN Plan Subordinated Claims
(Class 3D); Consenting MPP Subordinated Claims (Class 3E); MedPartners
Subordinated Claims (Class 3F); and Other Unsecured Claims (Class 3G). The
sub-classifications identified herein are for descriptive purposes and for
purposes of effectuating certain voluntary subordinations to be implemented in
connection with this Plan. The sub-classifications do not give rise to any
separate or different voting rights or claims treatment; all Allowed Class 3
Claims, without regard for sub-classifications, shall be considered to be one
Class for voting purposes and each such Claim shall receive the treatment
provided for in this Section 2.3.
Class 3 is Impaired under the Plan. As set forth below, distributions
to holders of Allowed Class 3 Claims shall be made from:
(a) as to each holder of an Allowed Class 3 Claim, from
the Estate; and
(b) as to Consenting Providers, Consenting Plans to the
extent of any Final Preserved Claims against MPN, MedPartners, Consenting MPI
Subs and Consenting MPPs, from the Estate, from funds that, in the absence of
the subordination of the Class 3 Subordinated Claims, would be distributed by
the Estate to the holders of the Class 3 Subordinated Claims and from funds made
available under the MedPartners Funding Commitment.
2.3.1 PRO RATA DISTRIBUTIONS FROM THE ESTATE.
Subject to the voluntary subordination of Claims described in to Section 2.3.2
below, each holder of an Allowed Class 3 Claim shall receive, in full and
complete satisfaction of all Claims against the Debtor, Cash in an amount equal
to such holder's Pro Rata share of all of the Assets of the Estate (including
funds deposited in the MPN California Account, but excluding any funding
provided
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<PAGE> 29
by MedPartners pursuant to the MedPartners Funding Commitment) remaining after
subtracting all amounts necessary to fund or pay (a) the Operating Reserve and
all Disputed Claims Reserves, and (b) Allowed Administrative Claims, Allowed
Secured Claims and Allowed Priority Claims. The manner and timing of
distributions to holders of Allowed Class 3 Claims is set forth in Section 6.12
below.
2.3.2 SUBORDINATED ALLOWED UNSECURED CLAIMS. On
the Effective Date, in accordance with Section 5.7 below and pursuant to the
terms and conditions specified in the MPN Provider Release, the MPN Plan
Release, the MedPartners Release and the Supplemental Plan Agreement, each as
applicable, all Class 3 Subordinated Claims shall be subordinated, to the extent
provided in this Plan, to the Allowed MPN Provider Claims of Consenting
Providers, Consent Plans, Consenting MPP's, and MedPartners and its affiliates
and MPN Plan Preserved Claims to the extent they are or become Allowed MPN
Claims. In addition, any MPN Provider Claims held by MedPartners, its affiliates
or any Consenting MPP's will be subordinated to, and only to, all Allowed Class
3 Claims held by Consenting Providers or Consenting Plans that are entitled to
satisfaction under the MedPartners Funding Commitment until the MedPartners
Funding Commitment has been fully satisfied with respect to all Class 3 Claims
that become Allowed Class 3 Claims. All funds that would be distributed to
holders of the Class 3 Subordinated Claims in the absence of such subordination
instead will be redirected and distributed in exactly the same manner as any and
all funds provided by MedPartners under the MedPartners Funding Commitment
pursuant to Section 6.12 below.
2.3.3 DISTRIBUTIONS FROM THE MEDPARTNERS FUNDING
COMMITMENT. Pursuant to the Settlement Agreement, the $40 Million LC is
available to satisfy obligations subject to the MedPartners Funding Commitment,
and MedPartners has agreed to be responsible for the satisfaction of the
obligations specified in the Settlement Agreement on the terms and conditions
set forth therein. Each Consenting Provider, Consenting Plan, Consenting MPP,
and each of MedPartners and its affiliates, to the extent of its respective
Allowed MPN Provider Claims in Class 3A and Allowed MPN Plan Preserved Claims in
Class 3B, as applicable, after the exercise of all rights of setoff or
recoupment of MPN with respect thereto in accordance with
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<PAGE> 30
applicable law and the Supplemental Plan Agreement, shall be entitled to share
in the distribution of: (a) funds made available under the MedPartners Funding
Commitment, whether pursuant to draws made on the $40 Million LC or otherwise;
and (b) funds made available to such parties as a result of the subordination of
the Class 3 Subordinated Claims described in Section 2.3.2 above; provided,
however, that: (x) any MPN Provider Claims held by MedPartners, its affiliates
or any Consenting MPP's will be subordinated to, and only to, all Allowed Class
3 Claims held by Consenting Providers or Consenting Plans that are entitled to
satisfaction under the MedPartners Funding Commitment until the MedPartners
Funding Commitment has been fully satisfied with respect to all such Allowed
Class 3 Claims; and (y) any distribution to be made to Consenting Plans shall
be subject to the provisions of Section 20.18 of the Supplemental Plan Agreement
or any other agreement between MPN and a Consenting Plan that modifies the
Supplemental Plan Agreement as to those parties and has been approved by Final
Order of the Bankruptcy Court. The manner and timing of such distributions is
set forth in Section 6.12 below.
In addition, in connection with the solicitation of votes on
the Plan, Consenting Providers holding MPN Provider Claims that are or become
Allowed Class 3A Claims shall be entitled to make the 90% Cash Election provided
for under the Plan.
2.4 CLASS 4: INTERESTS OF HOLDERS OF MPN COMMON
STOCK. Class 4 consists of all Interests in MPN arising from the common stock,
and all rights to acquire any such common stock, issued by MPN and outstanding
immediately prior to the Effective Date, and all other rights and Interests
thereunder. Class 4 is not Impaired under the Plan. MedPartners, the sole holder
of Allowed Class 4 Interests, shall retain its common stock interests in MPN,
and the legal, equitable and contractual rights to which such Interests entitle
MedPartners shall be unaltered by the Plan.
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ARTICLE 3
TREATMENT OF UNCLASSIFIED CLAIMS
3.1 UNCLASSIFIED CLAIMS.
3.1.1 ADMINISTRATIVE CLAIMS. Subject to the
allowance procedures and deadlines provided herein and in the Provider
Stipulation, the Revested Debtor shall pay to each holder of an Allowed
Administrative Claim, on account of the Allowed Administrative Claim and in full
satisfaction thereof, Cash equal to the amount of such Allowed Administrative
Claim, unless the holder agrees to other treatment. Except as otherwise
provided herein or a prior order of the Bankruptcy Court: (i) payment of an
Administrative Claim that is an Allowed Claim as of the Effective Date shall be
made on the later of the Effective Date or the date such payment would have
become due for payment of such Allowed Claim in the absence of the Chapter 11
Case, whether pursuant to contract or applicable nonbankruptcy law; and (ii)
payment of an Administrative Claim that becomes an Allowed Claim following the
Effective Date shall be made on or before the date that is thirty (30) days
after an order deeming such Administrative Claim an Allowed Claim becomes a
Final Order. Treatment of Allowed Administrative Claims in accordance with this
Section 3.1.1 shall be in full and final satisfaction of any and all such
Claims, including any and all Allowed Administrative Claims arising under or
pursuant to the Plan Stipulation or the Provider Stipulation.
3.1.2 PAYMENT OF STATUTORY FEES. On or before the
Effective Date, all fees due and payable pursuant to 28 U.S.C. ss. 1930, as
determined by the Bankruptcy Court at the Confirmation Hearing, shall be paid in
full, in Cash.
3.1.3 PAYMENT OF PRIORITY TAX CLAIMS. In
accordance with Bankruptcy Code section 1129(a)(9)(C), except as otherwise
agreed to by the parties, each holder of an Allowed Priority Tax Claim shall
receive from the Revested Debtor deferred Cash payments over a period not
exceeding six (6) years from the date of assessment of such Claim. Payments
shall be made in equal, semi-annual installments and each installment shall
include simple interest accrued on the unpaid portion of such Claim at the rate
required by 26 U.S.C. section 2661; provided, however, that MPN reserves the
right to pay any Allowed Priority Tax Claim, or
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any remaining balance of such Claim, in part or in full, in Cash, at any time on
or after the Effective Date, without premium or penalty.
3.1.4 DEADLINE FOR FILING ADMINISTRATIVE CLAIMS.
(a) Administrative Claims Other Than
Tax Claims. Other than with respect to (i) Administrative Claims for which the
Bankruptcy Court previously has established Claims Bar Dates, and (ii) Tax
Claims addressed in section 3.14(b) below, requests for payment or proofs of
Administrative Claims, including Claims of all professional or other entities
requesting compensation or reimbursement of expenses pursuant to Bankruptcy Code
sections 327, 328, 330, 331, 503(b) or 1103 for services rendered on or
before the Effective Date (including any compensation requested by any
professional or any other entity for making a substantial contribution in the
Chapter 11 Case), must be Filed and served on MPN and its counsel no later than
the Administrative Claims Bar Date. Objections to any such Administrative Claims
must be Filed and served on the claimant no later than thirty (30) days after
the Administrative Claims Bar Date. MPN shall use reasonable efforts to promptly
and diligently pursue resolution of any and all disputed Administrative Claims.
Holders of Administrative Claims, including all professional
or other entities requesting compensation or reimbursement of expenses
pursuant to Bankruptcy Code sections 327, 328, 330, 331, 503(b) or 1103 for
services rendered on or before the Effective Date (including any compensation
requested by any professional or any other entity for making a substantial
contribution in the Chapter 11 Case), that are required to File a request for
payment of such Claims and that do not File such requests on or before the
Administrative Claims Bar Date shall be barred from asserting such Claims
against the Debtor, the Estate, the Revested Debtor, any other Person or
Entity, or any of their respective property.
(b) Tax Claims. All requests for payment of
Claims by a governmental unit for Taxes (and for interest and/or penalties
related to such Taxes) for any tax year or period, all or any portion of which
occurs or falls within the period from and including the Petition Date through
and including the Effective Date, and for which no bar date has
otherwise been previously established, must be Filed on or before the later of:
(a) sixty (60) days
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following the Effective Date; or (b) ninety (90) days following the filing of
the tax return for such Taxes for such tax year or period with the applicable
governmental unit. Any holder of a Claim for Taxes that is required to File a
request for payment of such Taxes and other monies due related to such Taxes and
which does not File such a Claim by the applicable bar date shall be forever
barred from asserting any such Claim against any of the Debtor, the Estate, the
Revested Debtor or their respective Assets, whether any such Claim is deemed to
arise prior to, on, or subsequent to the Effective Date, and shall receive no
distribution under the Plan or otherwise on account of such Claim.
ARTICLE 4
TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
4.1 ASSUMPTION; ASSIGNMENT. As of the Effective Date, the Debtor
in Possession shall assume or assume and assign, as applicable, pursuant to
Bankruptcy Code section 365, each of the executory contracts and unexpired
leases of the Debtor that are identified in Exhibit "8" to the Disclosure
Statement that have not expired under their own terms prior to the Effective
Date. Solely with respect to any executory contracts or unexpired leases related
to MPN's property interests in any tangible assets, the Debtor reserves the
right to amend such Exhibit not later than ten (10) days prior to the
Confirmation Hearing either to: (a) delete any executory contract or lease
listed therein and provide for its rejection pursuant to Section 4.4 hereof, or
(b) add any executory contract or lease to such Exhibit, thus providing for its
assumption or assumption and assignment, as applicable, pursuant to this Section
4.1. The Debtor shall provide notice of any such amendment of such Exhibit to
the parties to the executory contract or lease affected thereby and counsel for
the Committee not later than ten (10) days prior to the Confirmation Hearing.
The Confirmation Order shall constitute an order of the Bankruptcy Court
pursuant to Bankruptcy Code section 365 approving all such assumptions or
assumptions and assignments, as applicable, described in this Section 4.1, as of
the Effective Date.
4.2 CURE PAYMENTS; ASSURANCE OF PERFORMANCE. Any monetary defaults
under each executory contract and unexpired lease to be assumed under the Plan
shall be satisfied,
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pursuant to Bankruptcy Code section 365(b)(1), in either of the following, ways:
(a) by payment of the default amount in Cash, in full on the Effective Date; or
(b) by payment of the default amount on such other terms as may be agreed to by
the Debtor and the non-Debtor parties to such executory contract or lease. In
the event of a dispute regarding (i) the amount or timing of any cure payments,
(ii) the ability of the Revested Debtor or an assignee of the Debtor to provide
adequate assurance of future performance under the contract or lease to be
assumed or assumed and assigned, as applicable, or (iii) any other matter
pertaining to assumption or assumption and assignment of the contract or lease
to be assumed, the Revested Debtor shall pay all required cure amounts promptly
following the entry of a Final Order resolving the dispute.
4.3 OBJECTIONS TO ASSUMPTION OF EXECUTORY CONTRACTS AND UNEXPIRED
LEASES. To the extent that any party to an executory contract or unexpired
lease identified for assumption asserts arrearages or damages pursuant to
Bankruptcy Code section 365(b)(1), or has any objection with respect to adequate
assurance of future performance, any proposed assumption, revestment, cure or
assignment on the terms and conditions provided herein, all such arrearages,
damages and objections must be Filed and served: (a) as to any contracts or
leases identified on the form of Exhibit "8" included with the Disclosure
Statement that is mailed to any party to any such contract or lease along with
all other solicitation materials accompanying the Plan, within the same deadline
and in the same manner established for the Filing and service of objections to
Confirmation; and (b) as to any contracts or leases identified in any subsequent
amendments to Exhibit "8" to the Disclosure Statement that is mailed to any
party to any such contract or lease not later than ten (10) days prior to the
Confirmation Hearing, in such a manner as to be received by the Bankruptcy Court
and counsel for MPN no later than one (1) day prior to the Confirmation Hearing.
Failure to assert such arrearages, damages or objections in
the manner described above shall constitute consent to the proposed assumption,
revestment, cure or assignment on the terms and conditions provided herein,
including an acknowledgement that the proposed assumption and/or assignment
provides adequate assurance of future performance and that that amount
identified for "cure" on Exhibit "8" to the Disclosure Statement is the amount
necessary
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to cover any and all outstanding defaults under the executory contract or
unexpired lease to be assumed, as well as an acknowledgement and agreement that
no other defaults exist under such contract or lease.
If any assumption of an executory contract or unexpired lease
proposed herein for any reason is not approved by the Bankruptcy Court, then
such executory contract or unexpired lease shall be deemed to have been
rejected pursuant to the provisions of Section 4.4 below.
4.4 REJECTION. Except for those executory contracts and
unexpired leases that are assumed pursuant to this Plan or that were previously
assumed or rejected by order of the Bankruptcy Court pursuant to Bankruptcy Code
section 365, as of the Effective Date, the Debtor in Possession shall reject,
pursuant to Bankruptcy Code section 365, all executory contracts and unexpired
leases.
4.5 APPROVAL OF REJECTION; REJECTION DAMAGES CLAIMS BAR DATE.
The Confirmation Order shall constitute an Order of the Bankruptcy Court
approving all rejections under Section 4.4 above of executory contracts and
unexpired leases pursuant to Bankruptcy Code section 365 as of the Effective
Date. Any Claim for damages arising from any such rejection must be Filed within
thirty (30) days after the later of mailing of notice of the entry of the
Confirmation Order or mailing of the notice of MPN's rejection of such contract
or lease, or such Claim shall be forever barred, shall not be enforceable
against the Debtor, its Estate, the Revested Debtor or any of their respective
properties and shall receive no distribution under the Plan or otherwise on
account of such Claim.
ARTICLE 5
MEANS FOR EXECUTION AND IMPLEMENTATION OF THE PLAN
5.1 VESTING OF PROPERTY OF THE ESTATE. Except as otherwise
provided in the Plan or the Confirmation Order, on the Effective Date, any and
all property of the Estate shall vest in the Revested Debtor free and clear of
liens and encumbrances.
5.2 BUSINESS OF REVESTED DEBTOR. From and after the
Effective Date, the business of the Revested Debtor shall consist of resolving
or prosecuting objections to Claims, liquidating any and all Assets of the
Estate to Cash, providing funds to the Disbursing Agent for
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distributions to be made to Creditors as provided in Article 6 of this Plan,
taking any further actions that may be necessary to effectuate the terms of the
Settlement Agreement, the Supplemental Plan Agreement, and this Plan, including
pursuing enforcement or other remedies as may be necessary, and otherwise
winding up all affairs of the Estate. The Revested Debtor shall be authorized,
without further Bankruptcy Court approval, to employ, contract with,
compensate, release or terminate other persons, agents, employees, entities,
independent contractors, and attorneys, accountants and other professionals,
all as may be deemed necessary to assist in the performance of the duties of
the Revested Debtor hereunder.
5.3 POST-EFFECTIVE DATE REPORTING. As promptly as practicable after
the making of any distributions that are required under the Plan to be made on
the Effective Date, but in any event no later than five (5) Business Days after
the making of such distributions, MPN or the Disbursing Agent shall provide the
Reconstituted Committee with a report setting forth the amounts and timing of
all such distributions and the recipients thereof. Thereafter, the Revested
Debtor shall: (a) provide to the Reconstituted Committee quarterly reports
summarizing (i) the cash receipts and disbursements of the Revested Debtor for
the immediately preceding three-month period and (ii) the status of resolution
of any Disputed Claims during that same period. Each quarterly report shall
also state the Revested Debtor's cash balances, as well as any remaining
availability under the $40 Million LC, as of the beginning and ending of each
such period. Quarterly reports shall be provided no later than the fifteenth
(15th) day of each January, April, July and October until all Final
Distributions under the Plan have been made. In addition, MPN shall reasonably
promptly provide to the Reconstituted Committee such other additional
information that the Reconstituted Committee reasonably requires in connection
with carrying out its duties and obligations in connection with this Plan.
5.4 MANAGEMENT OF REVESTED DEBTOR. Exhibit "4" hereto designates the
Persons who will serve initially as directors of the Revested Debtor. If
necessary to fill vacancies at any time prior to the Effective Date, the Debtor
shall have the sole authority to make such designation or fill such vacancies.
All persons designated pursuant to this section shall be authorized to assume
their offices as of the Effective Date and to continue to serve in such
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capacities thereafter pending further action of the Board of Directors or
stockholders of the Revested Debtor in accordance with applicable state law and
the Revested Debtor's then-applicable bylaws and charters. The Persons who are
officers of the Debtor as of the Effective Date shall assume their respective
offices of the Revested Debtor, subject to replacement by the directors of the
Revested Debtor. If the Revested Debtor fails to perform any obligations under
this Plan with respect to the making of any required payments or distributions,
the Reconstituted Committee may, upon notice and a hearing, seek Bankruptcy
Court authority and approval to take such actions as are necessary to fulfill
any such obligations on behalf of the Revested Debtor, including seeking the
designation by the Bankruptcy Court of an "Authorized Agent" (as defined in the
$40 million LC) on the terms and conditions and for the purposes set forth in
the $40 million LC, and may employ such experts as may be necessary to advise
the Reconstituted Committee with respect to such actions.
5.5 FUNDING OF THE PLAN. This Plan is a liquidating plan that
contemplates the distribution of all of the Assets of the Debtor to creditors
holding Allowed Claims, including all available Effective Date Cash and
Post-Effective Date Cash. In addition, Consenting Providers and Consenting
Plans shall be entitled to share in the funds made available as a result of the
subordination of the Class 3 Subordinated Claims and to be provided under the
MedPartners Funding Commitment, to the extent they hold Claims that qualify
therefor, in accordance with the terms and conditions of the Settlement
Agreement and the Supplemental Plan Agreement.
Accordingly:
(a) With respect to distributions from the Estate, the
sources for distributions to be made under this Plan are as follows:
(i) Effective Date Cash;
(ii) Post-Effective Date Cash;
(iii) To the extent the Operating Reserve, as
supplemented by any Post-Effective Date Cash
made available for such purposes, has been
exhausted and there remain unpaid any (a)
reasonable and necessary post-Effective Date
expenses
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incurred by MPN or for which MPN is
responsible, or (b) to the extent covered by
the MedPartners Funding Commitment, any
Unpaid Administrative Expense, MedPartners
shall provide funds to satisfy such expenses;
and
(iv) To the extent any funds remain in the
Operating Reserve after MPN has made payment
in full of all amounts properly payable from
the Operating Reserve under this Plan, such
funds shall be available to MPN to distribute
on account of any other payments required or
permitted to be made under the Plan.
(b) With respect to distributions under the MedPartners
Funding Commitment, the sources for distributions to be made under this Plan
are as follows:
(i) the $40 Million LC; and
(ii) additional funding to be provided by
MedPartners, subject to the terms and
conditions of the MedPartners Funding
Commitment, but only to the extent necessary
within the MedPartners Funding Commitment to
(A) increase the amount of the Estate
Distribution(s) on account of any particular
Allowed Claim to 85% of the Allowed amounts
of such Claim, (B) satisfy the MedPartners
Funding Commitment with respect to Final
Distributions, and (C) pay Unpaid
Administrative Expenses and reasonable and
necessary post-Effective Date expenses for
which MPN is responsible.
5.6 DRAWS ON $40 MILLION LC. Prior to the Effective Date, MPN shall
calculate the nature and amount of the distributions and payments required to
be made under this Plan upon occurrence of the Effective Date and promptly
provide the Committee with such
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information. On the Effective Date, MPN shall request a draw under the $40
Million LC in such amounts as are necessary to make such distributions and
payments to the extent this Plan provides that the $40 Million LC shall be a
source of funds available to make such distributions and payments.
5.7 CONSENSUAL SUBORDINATION, WAIVER AND RELEASE OF CERTAIN CLAIMS.
In connection with the Plan, MPN, MedPartners, the Consenting MPI Subs, the
Consenting MPP's and the Consenting Plans have agreed to subordinate, waive or
release certain Claims on the terms and conditions set forth in the
Supplemental Plan Agreement. Upon occurrence of the Effective Date, MedPartners
shall also subordinate to, and only to, MPN Provider Claims that are or become
Allowed MPN Claims held by Consenting Providers or Consenting Plans and Plan
Preserved Claims that become Allowed MPN Claims held by Consenting Plans, any
Bankruptcy Code Section 503(b) Claim of MedPartners for unpaid post-Petition
Date amounts payable by MPN under the terms of the Management Agreement (as
that term is defined in the Settlement Agreement). In addition, by accepting
the MPN Provider Release provisions contained in Article 9 of this Plan,
Consenting Providers agree to subordinate certain Claims on the terms and
conditions set forth in Article 9. In accordance with Bankruptcy Code section
510(a), the distributions to Consenting Providers and Consenting Plans under
Section 6.12 hereof enforce and give effect to the subordinations, waivers and
releases contained in the Supplemental Plan Agreement and in the MPN Provider
Release. In order to receive the benefits of those subordinations, waivers
and/or releases, Providers, Health Plans and each of MedPartners and any of its
affiliates must agree to be bound by the releases and related provisions
contained in Article 9 of this Plan, as applicable to them, by timely executing
and delivering a ballot evidencing their respective agreement to do so.
5.8 WAIVERS AND RELEASES BY MPN. Except for the rights of MPN to
enforce the provisions of the Plan or the Supplemental Plan Agreement, effective
upon the Effective Date, MPN hereby (i) remises, acquits, waives, releases and
forever discharges each Consenting Plan and its successors, predecessors,
subsidiaries, affiliates, heirs and assigns, past and present officers,
directors, shareholders, employees, agents, attorneys, members and/or enrollees
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(collectively, the "Consenting Plan Released Parties"), and (ii) covenants and
agrees never to institute or cause to be instituted any suit or other form of
action or proceeding of any kind or nature whatsoever against any of the
Consenting Plan Released Parties based upon any claims, demands, indebtedness,
agreements, promises, causes of action, obligations, damages or liabilities of
any nature whatsoever, in law or in equity, whether or not known, suspected or
claimed, that MPN or the Estate ever had, claimed to have, has, or may have or
claim to have against the Consenting Plan Released Parties, or any of them, by
reason of any matter, cause, thing, act or omission of the Consenting Plan
Released Parties, or any of them, in each case related to the California
Operations except for MPN Preserved Claims. All Claims so waived and released
shall be waived and released for purposes of (i) seeking affirmative relief and
(ii) defense of or setoff against MPN Plan Preserved Claims, including MPN
Provider Claims held by Consenting Plans, and shall be preserved only for
purposes of defense of, or setoff against, MPN Plan Subordinated Claims.
Effective upon satisfaction of the MedPartners Funding Commitment, MPN
hereby (i) remises, acquits, waives, releases and forever discharges
MedPartners and its successors, predecessors, subsidiaries, affiliates, heirs
and assigns, past and present officers, directors, shareholders, employees,
agents and attorneys and every Managed Physician Practice (collectively, the
"MedPartners Released Parties"), and (ii) covenants and agrees never to
institute or cause to be instituted any suit or other form of action or
proceeding of any kind or nature whatsoever against any of the MedPartners
Released Parties based upon any claims, demands, indebtedness, agreements,
promises, causes of action, obligations, damages or liabilities of any nature
whatsoever, in law or in equity, whether or not known, suspected or claimed,
that MPN or the Estate ever had, claimed to have, has, or may have or claim to
have against the MedPartners Released Parties, or any of them, by reason of any
matter, cause, thing, act or omission of the MedPartners Released Parties, or
any of them, occurring at any time prior to the Effective Date.
5.9 LIMITATION OF LIABILITY: Except as expressly set forth in the
Plan, following the Effective Date, none of the Debtor, the Revested Debtor,
the Committee, the Special
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Monitor-Examiner, MedPartners or any of its affiliates, the Disbursing Agent,
J. Mark Abernathy, in his capacity as Conservator and subsequently Special
Monitor-Examiner, or any of their respective members, officers, directors,
employees, advisors, attorneys, professionals or agents shall have or incur any
liability to any holder of a Claim or Interest for any act or omission in
connection with, related to, or arising out of, the Chapter 11 Case, the pursuit
of confirmation of the Plan, the consummation of the Plan or any contract,
instrument, release or other agreement or document created in connection with
this Plan, or the administration of the Plan or the property to be distributed
under the Plan, except for willful misconduct or gross negligence.
5.10 EXECUTION OF DOCUMENTS AND CORPORATE ACTION. Following
Confirmation and prior to the occurrence of the Effective Date, the Debtor and
Debtor in Possession shall execute such documents and take such other action as
is necessary to effectuate the transactions provided for in this Plan.
5.11 EXEMPTION FROM CERTAIN TRANSFER TAXES. Pursuant to Bankruptcy
Code section 1146(c), the issuance, transfer or exchange of any Security or the
making or delivery of any instrument of transfer under this Plan may not be
taxed under any law imposing a stamp tax or similar tax. Any sale of any Asset
occurring after the Effective Date shall be deemed to be in furtherance of this
Plan.
5.12 PRESERVATION OF RIGHTS OF ACTION, SETOFFS AND RECOUPMENTS.
Except as otherwise provided in the Plan, the Supplemental Plan Agreement, the
Bankruptcy Court order approving the Supplemental Plan Agreement, any other
agreement between MPN and a Consenting Plan that (a) modifies the Supplemental
Plan Agreement as to those parties and (b) has been approved by Final Order of
the Bankruptcy Court, any settlement agreement or stipulation between MPN and a
Consenting Provider that has been approved by Final Order of the Bankruptcy
Court, or any contract, instrument, release or other agreement entered into in
connection with the Plan, in accordance with the Bankruptcy Code section
1123(b)(3)(B), the Revested Debtor shall be vested with and may enforce any
Claims, rights and causes of action that the Debtor or its Estate may be
entitled to assert against any entity, including MPN
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Preserved Claims and Claims and causes of action arising under Bankruptcy Code
sections 542 through 553.
Except as otherwise provided in the Plan, the Supplemental Plan
Agreement, the Bankruptcy Court order approving the Supplemental Plan
Agreement, any other agreement between MPN and a Consenting Plan that (a)
modifies the Supplemental Plan Agreement as to those parties and (b) has been
approved by Final Order of the Bankruptcy Court, any settlement agreement or
stipulation between MPN and a Consenting Provider that has been approved by
Final Order of the Bankruptcy Court, or any contract, instrument, release or
other agreement entered into in connection with the Plan, the Revested Debtor
may, pursuant to Bankruptcy Code section 553 or applicable nonbankruptcy law,
setoff or recoup against any Allowed Claim, before any distribution is made on
account of such Allowed Claim, any and all of the Claims, causes of action and
rights of any nature that the Debtor, the Estate or the Revested Debtor may
hold against the holder of such Allowed Claim; provided, however, that neither
the failure to effect such a setoff or recoupment nor the allowance of any
Claim hereunder shall constitute a waiver of release by the Debtor, the Estate
or the Revested Debtor of any such Claims, causes of action or rights that the
Debtor, the Estate of the Revested Debtor may possess against such holder.
Except as otherwise provided in the Plan, the Supplemental Plan Agreement, the
Bankruptcy Court order approving the Supplemental Plan Agreement, any other
agreement between MPN and a Consenting Plan that (a) modifies the Supplemental
Plan Agreement as to those parties and (b) has been approved by Final Order of
the Bankruptcy Court, any settlement agreement or stipulation between MPN and a
Consenting Provider that has been approved by Final Order of the Bankruptcy
Court, or any contract, instrument, release of other agreement entered into in
connection with the Plan, to the extent the Debtor or the Revested Debtor fails
to setoff or recoup against an Allowed Claim and instead seeks to collect on a
Claim, cause of action or right against the holder of such Allowed Claim, the
Debtor or Revested Debtor shall be entitled to full recovery on their claim,
cause of action or right against such holder in accordance with applicable law.
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5.13 OBJECTIONS TO CLAIMS; EXPEDITED CLAIMS RESOLUTION. Subject to
applicable law and any applicable deadlines established in the Settlement
Agreement and the Supplemental Plan Agreement, from and after the Effective
Date, the Revested Debtor shall have the authority to File, settle, compromise,
withdraw, arbitrate or litigate to judgment objections to Claims: (a) pursuant
to applicable procedures established by the Bankruptcy Code, the Bankruptcy
Rules, the Settlement Agreement, the Supplemental Plan Agreement and this Plan;
and (b) subject to the oversight authority granted to the Claims Monitor and the
Reconstituted Committee under this Plan.
If, within the six months after the Effective Date, all Claims asserted
against MPN by a Consenting Provider and all Claims asserted by MPN against such
Consenting Provider have not yet been finally resolved, whether by agreement or
pursuant to final judgment or final arbitration award either party to the
dispute may require the other party to participate in the binding arbitration
process set forth in Exhibit "5" hereto to resolve all such Claims, unless there
then exists a difference of $5 million or greater between the aggregate Claims
asserted against MPN by such Consenting Provider and the aggregate claims
asserted by MPN against such Consenting Provider ("Large Variance Creditors").
MPN will diligently prosecute legal proceedings to resolve all of its claims,
cross-claims, counterclaims, defenses, offsets, and recoupments with respect to
Large Variance Creditors.
5.14 SURRENDER OF EXISTING LETTERS OF CREDIT. The Special
Monitor-Examiner shall deliver those certain Irrevocable Standby Letters of
Credit, Nos. 3022981 and 3022982 to Bank of America or its designee on the
Effective Date, or such other date as may be requested by MedPartners, MPN and
the Committee, in exchange for the issuance of the $40 million LC.
ARTICLE 6
DISTRIBUTIONS ON ACCOUNT OF ALLOWED CLAIMS AND INTERESTS
A. DISTRIBUTIONS GENERALLY.
6.1 DISTRIBUTIONS BY DISBURSING AGENT. Distributions from funds
provided to the Disbursing Agent by MPN under this Plan shall be made by the
Disbursing Agent appointed by the Bankruptcy Court pursuant to the Confirmation
Order. The Disbursing Agent may
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employ or contract with other entities to assist in or make the distributions
required by the Plan without further order of the Bankruptcy Court.
6.2 DELIVERY OF DISTRIBUTIONS IN GENERAL. Distributions to holders of
Allowed Claims shall be made: (a) at the addresses set forth in the Proofs of
Claim Filed by such holders; (b) at the addresses set forth in any written
notices of address change delivered to the Disbursing Agent after the date on
which any related Proof of Claim was Filed; or (c) at the addresses reflected
in the Schedules relating to the applicable Allowed Claim if no Proof of Claim
has been Filed and the Disbursing Agent has not received a written notice of a
change of address.
6.3 CASH PAYMENTS. Cash payments to be made pursuant to the Plan
shall be made by checks drawn on a domestic bank or by wire transfer from a
domestic bank, at the option of the Revested Debtor.
6.4 NO DE MINIMIS DISTRIBUTIONS. No payment of Cash in an amount of
less than $50.00 shall be made on account of any Allowed Claim.
6.5 FACE AMOUNT. For the purpose of the provisions of this Article
VI, the "face amount" of a Disputed Claim means the amount set forth on the
proof of claim unless the Disputed Claim has been estimated for distribution
purposes or, in the alternative, if no proof of claim has been timely Filed or
deemed Filed, zero.
6.6 UNDELIVERABLE DISTRIBUTIONS. If the distribution to any holder
of an Allowed Claim is returned to the Disbursing Agent as undeliverable, no
further distributions shall be made to such holder unless and until the
Disbursing Agent is notified in writing of such holder's then current address.
Undeliverable distributions shall remain in the possession of the Disbursing
Agent pursuant to this Plan in trust for the benefit of holders of Allowed
Claims until such time as a distribution becomes deliverable.
Any holder of an Allowed Claim that does not assert a Claim pursuant
to the Plan for an undeliverable distribution to be made by the Disbursing
Agent within six (6) months after the date on which the distribution is
returned to the Disbursing Agent shall have its Claim for such undeliverable
distribution discharged and shall be forever barred from asserting any such
Claim for an undeliverable distribution against the Revested Debtor or its
property. In such
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cases, any Cash held for distribution on account of such Claims for
undeliverable distributions shall become the property of the Estate and shall
be distributed in accordance with the terms of this Plan.
6.7 COMPLIANCE WITH TAX REQUIREMENTS. In connection with the Plan,
to the extent applicable, the Disbursing Agent shall comply with all tax
withholding and reporting requirements imposed on it by any governmental unit
and all distributions pursuant to the Plan shall be subject to such withholding
and reporting requirements. The Disbursing Agent shall be authorized to take
any and all actions that may be necessary or appropriate to comply with such
withholding and reporting requirements.
B. DISTRIBUTIONS TO CLASSES OF CLAIMS.
6.8 DISTRIBUTION TO CLASS 1A. On the later of (a) the Effective
Date and (b) the tenth (10th) Business Day after the subject Secured Claim in
Class 1A becomes an Allowed Secured Claim, the Revested Debtor shall cause
holders of Allowed Secured Claims in Class 1A to receive one of the alternative
treatments set forth in Section 2.1.a above. To the extent the applicable
treatment is as set forth in Section 2.1.(a)(ii), any monetary defaults shall
be cured by the payment by the Revested Debtor of Cash in the full amount
necessary to effectuate such cure.
6.9 DISTRIBUTION TO CLASS 1B. The Revested Debtor shall cause to be
distributed to each holder of an Allowed Class 1B Claim Cash in the full amount
of such Allowed Claim upon the latest of: (i) the Effective Date, or as soon
thereafter as practicable; (ii) such date as may be fixed by the Bankruptcy
Court, or as soon thereafter as practicable; (iii) the tenth (10th) Business
Day after such claim is Allowed, or as soon thereafter as practicable; (iv) the
date on which such Secured Tax Claim is scheduled to be paid in the ordinary
course of business under applicable law or regulation; and (v) such date as the
holder of such Claim and the Debtor or Revested Debtor have agreed or shall
agree.
6.10 DISTRIBUTION TO CLASS 1C. On the later of (a) the Effective
Date and (b) the tenth (10th) Business Day after the subject Secured Claim in
Class 1C becomes an Allowed Secured Claim, the Revested Debtor shall cause
holders of Allowed Secured Claims in Class 1C to receive one of the alternative
treatments set forth in Section 2.1.c above. To the
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extent the applicable treatment is as set forth in Section 2.1.c(ii), any
monetary defaults shall be cured by the payment by the Revested Debtor of Cash
in the full amount necessary to effectuate such cure. To the extent the
treatment is as set forth in Section 2.1.c(iii) above, the Revested Debtor
shall cause to be distributed to the holder of the Allowed Secured Claim Cash
in an amount equal to the amount of that Allowed Secured Claim, or in such
lesser amount as the holder of such Claim and the Revested Debtor shall agree,
in full satisfaction and release of such Claim.
6.11 DISTRIBUTION TO CLASS 2. On the later of the Effective Date or
the tenth (10th) Business Day after the subject Claim becomes an Allowed Claim,
the Revested Debtor shall cause to be distributed to each holder of an Allowed
Class 2 Claim Cash in the full amount of such Allowed Claim.
6.12 DISTRIBUTION TO CLASS 3.
6.12.1 PRO RATA DISTRIBUTION ON ACCOUNT OF ALLOWED CLASS 3
CLAIMS.
On the Effective Date, after funding of the Operating Reserve, the
Administrative Claims Reserve and all Disputed Claims Reserves and payment of
or reserves on account of Administrative Claims, Priority Claims and any other
amounts required to be paid or reserved for on the Effective Date pursuant to
the terms of the Plan or the Confirmation Order and following the exercise of
all rights of setoff or recoupment of MPN with respect thereto in accordance
with the Supplemental Plan Agreement, the Bankruptcy Court's order approving
the Supplemental Plan Agreement or any other agreement between MPN and a
Consenting Plan that (a) modifies the Supplemental Plan Agreement as to those
parties and (b) has been approved by Final Order of the Bankruptcy Court, the
Revested Debtor shall cause to be distributed to each holder of an Allowed
Claim in Class 3 Cash in an amount equal to such holder's Pro Rata share of all
of the Revested Debtor's Cash on hand, including all Net Cash Proceeds in the
MPN California Account but excluding any amounts provided under the MedPartners
Funding Commitment.
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6.12.2 DISTRIBUTIONS ON ACCOUNT OF ALLOWED CLASS 3A AND
ALLOWED CLASS 3B CLAIMS HELD BY CONSENTING PROVIDERS AND CONSENTING PLANS.
6.12.2.1 STIPULATED CLAIMS AMOUNT AND STIPULATED
ESTATE VALUE. For purposes of making distributions from the Estate and
calculating reserves thereon as of the Effective Date, the Confirmation Order
shall establish the Stipulated Claims Amount in a maximum amount of $80 million
and the Stipulated Estate Value in a minimum amount of $38 million, provided,
however, that the Stipulated Estate Value shall be reduced on a dollar-for-
dollar basis to the extent that as of the Effective Date (i) MPN has realized
less than $4 million from Retro Rate Recoveries, and (ii) Tangible Asset
Recoveries realized by MPN and the net appraised value of Tangible Assets
for which sales have not yet closed is less than $13 million in the aggregate.
6.12.2.2 INITIAL ESTATE DISTRIBUTIONS. An initial
distribution of property of the MPN estate will be made to each holder of an
MPN Provider Claim or MPN Plan Preserved Claim that is or becomes an Allowed
Claim that is eligible for the benefits of the MedPartners Funding Commitment
(the "Initial Estate Distribution"):
(a) with respect to a Claim that becomes an Allowed Claim on or
before the Confirmation Date, as soon as practicable after the Effective Date
in an amount equal to the product of the amount of such Allowed Claim
multiplied by a fraction, the numerator of which is the Stipulated Estate
Value and the denominator of which is the Stipulated Claim Amount (such
fraction defined as the "Distribution Ratio"); and
(b) with respect to a Claim that becomes such an Allowed Claim
after the Confirmation Date, within ten (10) days after the end of the calendar
month in which such Claim becomes an Allowed Claim in an amount equal to the sum
of (i) from the Disputed Claim Reserve, an amount equal to the product of the
amount of such Allowed Claim multiplied by the Distribution Ratio, and (ii)
after giving effect to (i), from any then available Post-Effective Date Cash,
after reserving for distributions on account of Allowed Claims and Disputed
Claims that are not eligible for MedPartners Funding Commitment and such
amounts as are necessary to satisfy post-Effective Date expenses for which MPN
is responsible and which are not covered by
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the MedPartners Funding Commitment, such amount as is necessary to enable such
holder to receive the same percentage distribution on account of such Allowed
Claim as has already been received by the holders of previously allowed Allowed
Claims eligible for the benefits of the MedPartners Funding Commitment on
account of such Allowed Claims pursuant to an Initial Estate Distribution, any
Supplemental Estate Distributions and any distributions under the $40 Million
LC or from MedPartners pursuant to the MedPartners Funding Commitment.
With respect to the Initial Estate Distribution and any distributions
required to be made concurrently therewith from funds to be provided by
MedPartners under the MedPartners Funding Commitment (including from any draws
made under the $40 Million LC) on account of the Allowed Claims that are
Allowed on or before the Confirmation Date, MPN and MedPartners, as applicable,
shall provide the funds necessary to make such distributions to the Disbursing
Agent no later than two (2) business days following the Effective Date.
6.12.2.3 SUPPLEMENTAL ESTATE DISTRIBUTIONS. To the
extent MPN accumulates Post-Effective Date Cash in an amount totaling at least
$3,000,000, after all distributions and reserves made pursuant to Section
6.12.2.2 above, the use of which is not restricted under this Plan or, once
the Operating Reserve has been exhausted, not required to pay reasonable and
necessary post-Effective Date costs and expenses, and such funds are available
for the payment of Allowed Claims, MPN shall make subsequent distributions of
such funds to each holder of an Allowed Class 3 Claim in such a manner as to
provide: (a) prepetition creditors other than consenting Providers and
Consenting Providers and Consenting Plans with their pro rata share of the
Assets of MPN's Estate, and (b) Consenting Providers and Consenting Plans with
equal percentage distributions on account of their Allowed Claims that are
covered by the MedPartners Funding Commitment that in no event exceed the
amounts necessary to satisfy the MedPartners Funding Commitment with respect to
such Allowed Claims (each a "Supplemental Estate Distribution" and together
with the Initial Estate Distribution for such claimant, the "Estate
Distribution"); provided, however, that: (x) to the extent the MedPartners
Funding Commitment has been satisfied with respect to any Allowed Claim of any
Consenting Provider or Consenting Plan on or before the date a Supplemental
Estate Distribution is to be made, such Consenting
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Provider or Consenting Plan shall not participate in such Supplemental Estate
Distribution on account of such Allowed Claim; and (y) in no event shall any
Consenting Provider that elects the 90% Cash Election participate in any
Supplemental Estate Distribution.
Each Supplemental Estate Distribution will be subject to a reserve for
Disputed Claims to be calculated based upon: (x) the Stipulated Claims Amount,
which shall be (i) increased on a dollar-for-dollar basis to the extent that
Allowed Claims that are covered by the MedPartners Funding Commitment exceed $80
million, or (ii) decreased on a dollar-for-dollar basis to the extent that the
sum of Allowed Claims that are covered by the MedPartners Funding Commitment
plus the face amount of Disputed Claims that are covered by the MedPartners
Funding Commitment is less than $80 million; and (y) following resolution of all
disputes and Allowance of any previously Disputed Claim (the "Resolved Disputed
Claim"), reduction of the reserve by a percentage equal to the percentage that
the Resolved Disputed Claim was to the face amount of all Disputed Claims as of
the Effective Date, each as calculated prior to the date of the Supplemental
Estate Distribution.
6.12.2.4 DISTRIBUTIONS FROM THE FUNDS DRAWN UNDER
THE $40 MILLION LC. The $40 Million LC will be drawable in accordance with its
terms to make distributions on account of Allowed Claims of Consenting Providers
and Consenting Plans covered by the MedPartners Funding Commitment, without any
reserve whatsoever. Except in connection with Final Distributions as set forth
in Section 6.1.2.2.7 below, such distributions will be made concurrently with,
or promptly following the payment of, the Initial Estate Distribution, provided
that the maximum amount drawn under the $40 million LC to be paid to any
claimant shall be the amount necessary to increase the Initial Estate
Distribution and all other Estate Distributions made contemporaneously therewith
to 85% of the Allowed Claim with respect to which payment is being made (or 90%
if the holder has elected the 90% Cash Election).
6.12.2.5 THE 85% DISTRIBUTION. To the extent funds
distributed from the Initial Estate Distribution, any concurrent Supplemental
Estate Distribution(s) and the $40 Million LC do not result in an 85%
Distribution on account of any Allowed Claim covered by the MedPartners Funding
Commitment (or 90% if the holder has elected the 90% Cash
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Election), pursuant to the MedPartners Funding Commitment MedPartners shall
make available such funds as are necessary to increase the aggregate amount
distributed on account of such Claim to 85% of the amount of such Allowed Claim
that is covered by the MedPartners Funding Commitment in such a manner as to
enable such distributions to be made timely (or 90% if the holder has elected
the 90% Cash Election). (The total distributions to be made pursuant to
Sections 6.12.2.2, 6.12.2.3, 6.12.2.4 and 6.12.2.5 are referred to collectively
as the "85% Distribution.") The Disbursing Agent may not make any distributions
on account of any portion of an 85% Distribution (or 90% Distribution, if
applicable), however, unless the Disbursing Agent is making distributions to
satisfy such 85% Distribution (or 90% Distribution, if applicable) in full, as
a result of which the releases provided for in Sections 9.1, 9.3.1, 9.3.2, 9.4
and 9.6 of this Plan, as applicable, shall become effective pursuant to their
terms and conditions.
6.12.2.6 FINAL DISTRIBUTIONS. Subject to the
provisions of this Section 6.12.2.6, as soon as practicable after the date that
is one year following the date the 85% Distribution is complete with respect to
an Allowed Claim, a final distribution (the "Final Distribution") shall be made
on account of such Allowed Claim in the amount necessary to satisfy the
MedPartners Funding Commitment with respect to the Allowed Claim on account of
which payment is being made. The Final Distribution shall be made from the
following sources and in the following order: (a) out of that portion of the
Assets of the MPN Estate available after reserving for Disputed Claims; (b)
from draws made on the $40 Million LC until fully drawn; and (c) from funds
provided by MedPartners pursuant to the MedPartners Funding Commitment, if
necessary. In no event shall any Consenting Provider that elects the 90% Cash
Election participate in or receive any Final Distribution(s).
As a prerequisite for making Final Distributions, MPN shall promptly
and diligently pursue resolution of all such claims in anticipation of
obtaining final resolution of any and all claims, whether such claims
constitute Permitted Expenses (as defined in the Settlement Agreement) or
expenses that are not eligible for the benefits of the MedPartners Funding
Commitment; provided, however, that if any such claims that are not eligible
for the benefits of the MedPartners Funding Commitment are not resolved at the
time a Final Distribution is due in
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accordance with the immediately preceding paragraph, an interim distribution on
account of the Final Distribution shall be made, calculated (a) based upon the
total amount of all such Claims that are undisputed or have been finally
resolved, and (b) assuming for distribution purposes only that the disputed
amount of any such Claims represent expenses that must be paid by the Estate
but are not covered by the MedPartners Funding Commitment (such that funds
equal to any such disputed amounts shall be withheld from the amount
distributed under any such interim distribution on account of the Final
Distribution). The balance of the Final Distribution will be paid as soon as is
practicable following the final resolution of all such claims.
6.12.2.7 DISTRIBUTIONS TO MEDPARTNERS. Once the
MedPartners Funding Commitment has been satisfied in full with respect to MPN
(including reasonable and necessary post-Effective Date expenses incurred by
MPN or for which MPN is responsible and Unpaid Administrative Expenses, to the
extent such items are covered by the MedPartners Funding Commitment) and all of
the voluntary subordinations provided for in the Settlement Agreement, the
Supplemental Plan Agreement and Articles 2, 5 and 9 of this Plan have otherwise
been effectuated, any distributions that otherwise would be made to Consenting
Providers or Consenting Plans instead shall be made to MedPartners until such
time as MedPartners has been reimbursed in full for all funds provided by it
under the MedPartners Funding Commitment, whether under the $40 Million LC or
otherwise.
6.12.2.8 DISTRIBUTIONS TO CONSENTING PLANS. Any and
all payments to be made by MPN to any Consenting Plan shall be made in the same
manner, timing and percentage amounts as payments to be made to Consenting
Providers, subject to Section 20.18 of the Supplemental Plan Agreement or any
other agreement between MPN and a Consenting Plan that modifies the Supplemental
Plan Agreement as to those parties and has been approved by Final Order of the
Bankruptcy Court.
6.13 DISPUTED CLAIMS RESERVES. To the extent there exist as of the
Effective Date Disputed Claims in any Class, the Revested Debtor shall reserve
from any distribution of Estate Assets Cash in an amount equal to whatever Cash
distribution the holder(s) of such Disputed Claim(s) would be entitled to
receive if the face amount of such Claim(s) became an
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Allowed Claim in that Class (and with respect to Class 3, based upon the
Stipulated Claims Amount). To the extent that any such Disputed Claim becomes
an Allowed Claim, such reserved Cash shall be distributed to the holder of the
Allowed Claim in a manner and amount consistent with the treatment of Allowed
Claims in that Class, with any surplus Cash becoming generally available for
use by the Revested Debtor in accordance with the terms of this Plan; provided,
however, that distributions made under the MedPartners Funding Commitment shall
not be subject to any such reserves.
6.14 DISBURSEMENT OF RESIDUAL FUNDS TO MEDPARTNERS. To the extent
funds made available to the Debtor pursuant to the MedPartners Funding
Commitment exceed the amount necessary for the satisfaction of Allowed Claims
entitled to receive the benefits of the MedPartners Funding Commitment, such
excess funds shall be treated in the manner set forth in section 3.5(d) of the
Settlement Agreement.
ARTICLE 7
CONDITIONS TO THE EFFECTIVE DATE
7.1 CONDITIONS TO EFFECTIVE DATE. The Plan shall not become
effective and the Effective Date shall not occur unless and until:
(a) Unless waived by the Debtor, the Confirmation
Order shall have become a Final Order;
(b) The Effective Date of the Settlement Agreement,
as defined in the Settlement Agreement, shall have occurred and the Settlement
Agreement shall not have terminated;
(c) The SPA Effective Date, as that term is defined
in the Supplemental Plan Agreement, shall have occurred and the Supplemental
Plan Agreement shall not have terminated;
(d) The Bankruptcy Court shall have entered an
order with respect to each MPN Provider Claim settlement stipulation described
on Exhibit "6" to the Disclosure Statement (each a "Settlement Stipulation")
that becomes a Final Order determining that, except as expressly set forth to
the contrary in any particular Settlement Stipulation, each Settlement
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Stipulation will constitute, upon effectiveness pursuant to its terms, a full
and final settlement of any and all Claims asserted by the settling Provider
against MPN;
(e) The Bankruptcy Court shall have entered an
order with respect to each Health Plan settlement agreement or stipulation
described on Exhibit "7" to the Disclosure Statement (each a "Health Plan
Settlement Stipulation") that becomes a Final Order determining that, except as
expressly set forth to the contrary in any particular Health Plan Settlement
Stipulation, each Health Plan Settlement Stipulation will constitute, upon
effectiveness pursuant to its terms, a full and final settlement of any and all
Claims asserted by the settling Health Plan against MPN; and
(f) The delivery by the Special Monitor-Examiner of
those certain Irrevocable Standby Letters of Credit, Nos. 3022981 and 3022982 to
Bank of America or its designee in exchange for issuance of the $40 million LC,
as provided for in Section 5.14, has occurred.
7.2 TERMINATION OF PLAN FOR FAILURE TO BECOME EFFECTIVE. If the
Effective Date shall not have occurred on or prior to the date that is
forty-five (45) days after the Confirmation Date, then this Plan shall
terminate and be of no further force or effect unless the provisions of this
Section 7.2 are waived in writing by MPN, the Committee and MedPartners.
ARTICLE 8
SATISFACTION OF CLAIMS AND TERMINATION OF INTERESTS; INJUNCTION
8.1 Except as otherwise expressly provided in this Plan or the
Confirmation Order, the rights afforded under the Plan and the treatment of
Claims and Interests under the Plan shall be in exchange for and in complete
satisfaction of all Claims against MPN and the Estate to the fullest extent
available under the Bankruptcy Code.
8.2 Pursuant to section 1141(d)(3) of the Bankruptcy Code, neither the
Plan nor the Confirmation Order shall discharge claims against the Debtor.
However, no Creditor of the Debtor may receive any payment from or seek recourse
against any Assets that are to be distributed under the Plan, except for those
Assets required to be distributed to that Creditor as expressly the plan, except
for those Assets required to be distributed to that Creditor provided for in the
Plan. As of the Effective Date, all Persons are precluded from
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asserting against property that is to be distributed under this Plan any
claims, rights, causes of action, liabilities or any equity interests based
upon any act or omission, transaction or other activity of any kind or nature
that occurred prior to the Effective Date, other than as expressly provided in
this Plan or the Confirmation Order, regardless of the filing, lack of filing,
allowance or disallowance of such a Claim or Interest and regardless of whether
such Person has voted to accept the Plan.
8.3 Except as otherwise provided in the Plan or the Confirmation
Order, on and after the Effective Date all Persons that have held, currently
hold or may hold a debt, Claim, other liability or Interest against or in the
Debtor or any Plan Released Party or MedPartners Released Party that would be
discharged upon Confirmation of the Plan and the Effective Date but for the
provisions of section 1141(d)(3) of the Bankruptcy Code and section 8.2 are
permanently enjoined from taking any of the following actions on account of
such debt, Claim, liability, Interest or right: (a) commencing or continuing in
any manner any action or other proceeding on account of such debt, Claim,
liability, Interest or right against Assets that are to be distributed under
the Plan, other than to enforce any right to a distribution with respect to
such Assets under the Plan; (b) enforcing, attaching, collecting or recovering
in any manner any judgment, award, decree, or order against any Assets to be
distributed to Creditors under the Plan, other than as permitted under
subparagraph (a) above; and (c) creating, perfecting or enforcing any lien or
encumbrance against any Assets to be distributed under the Plan, other than as
permitted by the Plan.
ARTICLE 9
MPN PROVIDER RELEASE AND MPN PLAN RELEASE
Pursuant to the MedPartners Funding Commitment and on the terms and
conditions set forth in the Settlement Agreement, MedPartners has agreed to
provide certain funds to facilitate satisfaction of eligible MPN Provider
Claims that become Allowed Claims held by Consenting Providers. The Settlement
Agreement requires a Provider to agree to the terms of the MPN Provider Release
as a precondition to becoming a Consenting Provider and thereby becoming
eligible to participate in the benefits of the MedPartners Funding Commitment
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and the voluntary subordinations contemplated by and/or provided for in the
Settlement Agreement, the Supplemental Plan Agreement and this Plan. THIS
ARTICLE 9 CONTAINS THE MPN PROVIDER RELEASE PROVISIONS TO WHICH A PROVIDER MUST
AGREE IN ORDER TO BECOME A CONSENTING PROVIDER. If you are a Provider who holds
one or more MPN Provider Claims and you wish to participate in such benefits to
the extent any such MPN Provider Claims become Allowed Claims, you must
evidence your agreement to be bound by the terms of the MPN Provider Release
set forth in this Article 9 by timely executing and returning a ballot
indicating your agreement in that regard.
IF YOU ARE AN ASSIGNEE OR SUCCESSOR IN INTEREST TO A PROVIDER WITH
RESPECT TO SUCH PROVIDER'S MPN PROVIDER CLAIMS (WHETHER OR NOT YOU ARE A
PROVIDER YOURSELF), YOU MAY BECOME ENTITLED TO TREATMENT UNDER THIS PLAN AS A
CONSENTING PROVIDER IF AND ONLY IF BOTH YOU AND THE PROVIDER THAT WAS YOUR
ASSIGNOR OR PREDECESSOR IN INTEREST TIMELY EXECUTE AND RETURN A BALLOT
INDICATING YOUR AND THEIR AGREEMENT TO BE BOUND BY THE TERMS OF THE MPN PROVIDER
RELEASE SET FORTH IN THIS ARTICLE 9.
IN ORDER TO BE COUNTED AS A VOTE TO ACCEPT OR REJECT THE PLAN, A
PROVIDER'S BALLOT MUST BE EXECUTED AND RETURNED NO LATER THAN THE VOTING
DEADLINE ESTABLISHED BY THE BANKRUPTCY COURT. FOR PURPOSES OF DETERMINING
WHETHER A PROVIDER IS A CONSENTING PROVIDER, HOWEVER, THE EXECUTION AND RETURN
OF A BALLOT SHALL BE CONSIDERED "TIMELY" IF THE EXECUTED BALLOT INDICATING SUCH
PROVIDER'S AGREEMENT TO BE BOUND BY THE TERMS AND CONDITIONS OF THIS ARTICLE 9
SHALL HAVE BEEN RECEIVED BY THE BALLOTING AGENT AT THE ADDRESS CONTAINED ON THE
BALLOT NO LATER THAN 5:00 P.M. PACIFIC TIME ON THE FIFTEENTH (15TH) BUSINESS DAY
FOLLOWING THE CONFIRMATION DATE.
If you submit your ballot indicating your agreement to be bound by the
terms of the MPN Provider Release set forth in this Article 9 on or before the
Voting Deadline, your agreement to be bound by the terms of the MPN Provider
Release shall become irrevocable upon entry of the Confirmation Order. If
you submit your ballot indicating your agreement to be bound by the terms of the
MPN Provider Release set forth in this Article 9 after the Voting Deadline but
no later than the fifteenth (15th) Business Day following the Confirmation Date,
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your agreement to be bound by the terms of the MPN Provider Release shall be
irrevocable immediately upon delivery of such ballot.
In addition, the Settlement Agreement and the Supplemental Plan
Agreement provide that each Consenting Plan shall execute and deliver to MPN an
MPN Plan Release with respect to all MPN Provider Claims and MPN Plan Preserved
Claims held by such Consenting Plan. THIS ARTICLE 9 CONTAINS THE MPN PLAN
RELEASE PROVISIONS TO WHICH A CONSENTING PLAN MUST AGREE IN ORDER TO COMPLY
WITH THE REQUIREMENTS OF THE SETTLEMENT AGREEMENT AND THE SUPPLEMENTAL PLAN
AGREEMENT. THIS ARTICLE 9 ALSO CONTAINS CERTAIN RELEASE PROVISIONS TO BE
GRANTED TO CONSENTING PROVIDERS BY CONSENTING PLANS IN CONSIDERATION OF THE
RELEASES OF CONSENTING PLANS GRANTED BY CONSENTING PROVIDERS HEREUNDER. Each
Consenting Plan must evidence its agreement to be bound by the terms and
conditions of this Article 9, as applicable to it, by timely executing and
returning a ballot indicating its agreement thereto no later than the deadline
established by the Bankruptcy Court for the submission of votes to accept or
reject this Plan.
The Settlement Agreement and the Supplemental Plan Agreement also
provide that MedPartners and each of its affiliates that assert MPN Provider
Claims (each a "MedPartners Releasing Party") shall execute and deliver to MPN a
MedPartners Release with respect to all MPN Provider Claims held by such entity
as a precondition to participating in the MedPartners Funding Commitment. THIS
ARTICLE 9 CONTAINS THE MEDPARTNERS RELEASE PROVISIONS TO WHICH ANY MEDPARTNERS
RELEASING PARTY MUST AGREE IN ORDER TO COMPLY WITH THE REQUIREMENTS OF THE
SETTLEMENT AGREEMENT AND THE SUPPLEMENTAL PLAN AGREEMENT. THIS ARTICLE 9 ALSO
CONTAINS CERTAIN RELEASE PROVISIONS TO BE GRANTED TO CONSENTING PROVIDERS BY
MEDPARTNERS AND ITS AFFILIATES IN CONSIDERATION OF THE RELEASES GRANTED BY
CONSENTING PROVIDERS HEREUNDER. Each Releasing Party that asserts any MPN
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Provider Claims must evidence its agreement to be bound by the terms and
conditions of this Article 9 as applicable to it by timely executing and
returning a ballot indicating its agreement thereto no later than the Voting
Deadline established by the Bankruptcy Court.
9.1 RELEASE OF MEDPARTNERS RELEASED PARTIES BY PROVIDER UPON RECEIPT
OF 85% DISTRIBUTION. Effective immediately upon a Provider's receipt of the
85% Distribution with respect to an Allowed Claim and in consideration of the
payment thereof, such Provider, on behalf of itself and the other respective
Provider Parties, hereby: (a) remises, acquits, releases and forever discharges
the MedPartners Released Parties, except with respect to (1) Provider's
claim(s) for and right(s) to collect any Supplemental Estate Distributions and
the Final Distribution on such Allowed Claim pursuant to the terms and
conditions of this Plan, (2) Provider's claim(s) for and right(s) to collect
the 85% Distribution, any Supplemental Estate Distributions and the Final
Distribution on any other Allowed Claims held by such Provider on the terms and
conditions of this Plan, and (3) any timely submitted, valid Provider claims
such Provider may have against any Managed Physician Practice; and (b)
covenants and agrees never to institute or cause to be instituted against any
of the MedPartners Released Parties, except as to any of the items identified
in items (1), (2) or (3) above, any suit or other form of action or proceeding
of any kind or nature whatsoever, based upon any claims, demands, indebtedness,
agreements, promises, causes of action, obligations, damages or liabilities of
any nature whatsoever, in law or in equity, whether or not known, suspected or
claimed, that Provider or any Provider Party ever had, has claimed to have, now
has, or may hereafter have or claim to have against the MedPartners Released
Parties, or any of them, by reason of any matter, cause, thing, act or omission
of the MedPartners Released Parties, or any of them, occurring at any time
prior to the date of payment of such 85% Distribution.
9.2 MUTUAL RELEASE BETWEEN MEDPARTNERS AND PROVIDER WITH RESPECT TO
ALL OF PROVIDER'S ELIGIBLE MPN PROVIDER CLAIMS.
9.2.1 Except as specifically provided in Section 9.2.3 below
and except for any timely submitted, valid Provider claims such Provider may
have against any Managed Physician Practice, effective immediately upon a
Provider's receipt of its Final Distribution on
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account of all of Provider's eligible MPN Provider Claims that become Allowed
Claims, or, with respect to a Provider that has made the 90% Cash Election,
upon receipt of the 90% Distribution on such Allowed Claims, Provider, on
behalf of itself and the other respective Provider Parties, hereby remises,
acquits, releases and forever discharges the MedPartners Released Parties, and
covenants and agrees never to institute or cause to be instituted against any
of the MedPartners Released Parties any suit or other form of action or
proceeding of any kind or nature whatsoever based upon any and all claims,
demands, indebtedness, agreements, promises, causes of action, obligations,
damages or liabilities of any nature whatsoever, in law or in equity, whether
or not known, suspected or claimed, that Provider or any Provider Party ever
had, has claimed to have, now has, or may hereafter have or claim to have
against the MedPartners Released Parties, or any of them, by reason of any
matter, cause, thing, act or omission of the MedPartners Released Parties, or
any of them, occurring at any time prior to the date of payment of the Final
Distribution or the 90% Distribution, as applicable.
9.2.2 Except as specifically provided in Section 9.2.3 and
except with respect to any rights, claims, defenses, offsets, rights of
recoupment or causes of action relating to any claims such Provider may assert
against any Managed Physician Practice, effective immediately upon a Provider's
receipt of its Initial Estate Distribution or its 90% Distribution, as
applicable, on account of all of Provider's eligible MPN Provider Claims that
become Allowed Claims, MedPartners, on behalf of itself and its successors,
predecessors, heirs, assigns, subsidiaries and affiliates, hereby remises,
acquits, releases and forever discharges the Provider Parties, and covenants
and agrees never to institute or cause to be instituted any suit or other form
of action or proceeding of any kind or nature whatsoever against any of the
Provider Parties, based upon any and all claims, demands, indebtedness,
agreements, promises, causes of action, obligations, damages or liabilities of
any nature whatsoever, in law or in equity, whether or not known, suspected or
claimed, that MedPartners ever had, has claimed to have, now has, or may
hereafter have or claim to have against the Provider Parties, or any of them,
by reason of any matter, cause, thing, act or omission of the Provider Parties,
or any of them, occurring at any time prior to the time the Provider receives
its Initial Estate Distribution or its 90% Distribution,
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as applicable, on account of all of Provider's eligible MPN Provider Claims
that become Allowed Claims.
9.2.3 Notwithstanding anything to the contrary in this
Article 9, neither the MedPartners Released Parties nor any of the Provider
Parties release any claims directly relating to, and this Article 9 shall not
release or affect in any way the following:
(a) Any obligations, claims or causes of action
brought by third parties relating to any Provider's provision
of Health Care Services, including, without limitation, (i)
malpractice actions or (ii) any existing or future obligation
of Provider to indemnify any of the MedPartners Released
Parties for claims or causes of action brought by third
parties, so long as the party otherwise entitled to such
indemnification has not directly or indirectly instituted such
third party claim or action;
(b) Any obligations, claims or causes of action
directly arising out of or resulting from any breach by a
party hereto of its obligations under this Article 9;
(c) With respect to MPN only, any MPN Preserved
Claims; and
(d) Any obligations, claims or causes of action
against any MedPartners Released Party arising out of a direct
contract with such MedPartners Released Parties and unrelated
to MPN's assets and operations.
9.3 MUTUAL RELEASE OF CONSENTING PLANS AND PROVIDER UPON RECEIPT OF
85% DISTRIBUTION OR 90% DISTRIBUTION, AS APPLICABLE; EXCEPTIONS TO RELEASE OF
CONSENTING PLANS.
9.3.1 Provider hereby further agrees that, except as
specifically provided in Section 9.3.3, Provider, on behalf of Provider and the
other Provider Parties, hereby remises, acquits, releases and forever
discharges each Consenting Plan and all Consenting Plan Released Parties, and
covenants and agrees never to institute or cause to be instituted against any
Consenting Plan or any Consenting Plan Released Parties, any suit or other form
of action or proceeding of any kind or nature whatsoever, based upon any claims
of Provider for Health Care
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Services that MPN arranged to have rendered to enrollees of any Consenting Plan
or any of the Consenting Plan Released Parties and that were provided to
enrollees pursuant to Health Care Services Agreements prior to June 1, 1999;
provided, however, that the release contained in this Section 9.3.1 shall be
effective only: (a) with respect to Providers who are parties to Settlement
Stipulations listed on Exhibit "6" to the Disclosure Statement, upon Providers'
receipt of the 85% Distribution or the 90% Distribution, as applicable, on
account of that portion of such Provider's prepetition unsecured claim that
shall constitute an Allowed MPN Claim of a Consenting Provider and upon which
such Provider shall be entitled to receive distributions pursuant to the
MedPartners Funding Commitment in accordance with the terms of such Settlement
Stipulation; and (b) for all other Providers, upon Provider's receipt of the 85%
Distribution or the 90% Distribution, as applicable, with respect to all of such
Provider's MPN Provider Claims that are or become Allowed Claims.
9.3.2 Each Consenting Plan hereby agrees that, except as
specifically provided in Section 9.3.3, upon effectiveness of the release
granted under Section 9.3.1 above, each Consenting Plan hereby remises, acquits,
releases and forever discharges each Consenting Provider, and covenants and
agrees never to institute or cause to be instituted against any Consenting
Provider, any suit or other form of action or proceeding of any kind or nature
whatsoever, based upon any claims of such Consenting Plan to recover an
overpayment on account of the provision of Health Care Services prior to June 1,
1999 arranged by MPN or a managed Physician Practice, except to the extent that
the Consenting Plan receives an assignment of claims from MPN, MedPartners or
the Managed Physician Practice pursuant to the Supplemental Plan Agreement.
Nothing herein shall be effective to release a Provider from any claim other
than a claim for overpayment for Health Care Services arranged for by MPN or a
Managed Physician Practice pursuant to a Health Care Services Agreement.
9.3.3 Notwithstanding anything to the contrary herein, this
Article 9 shall not release or affect in any way any Claims by Provider against
enrollees relating to payments for noncovered Health Care Services, enrollee
copayments and deductibles or other obligations
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for which the enrollee is exclusively responsible as determined in accordance
with applicable coverage agreements.
9.4 RELEASE OF MPN BY CONSENTING PLAN UPON RECEIPT OF 85%
DISTRIBUTION. Effective immediately upon a Consenting Plan's receipt of the
85% Distribution with respect to any Allowed Claim and in consideration of the
payment thereof, such Consenting Plan, on behalf of itself and the other
respective Consenting Plan Released Parties except for members and enrollees,
hereby: (a) remises, acquits, releases and forever discharges MPN, except with
respect to (1) Consenting Plan's claim(s) for and right(s) to collect any
Supplemental Estate Distributions and the Final Distribution on such Allowed
Claim pursuant to the terms and conditions of this Plan, (2) Consenting Plan's
claim(s) for and right(s) to collect the 85% Distribution, any Supplemental
Estate Distributions and the Final Distribution on any other Allowed Claims
held by such Consenting Plan that may be entitled to any such distributions
pursuant to the terms and conditions of this Plan or any other agreement
between MPN and a Consenting Plan that (i) modifies the Supplemental Plan
Agreement as to those parties, and (ii) has been approved by Final Order of the
Bankruptcy Court, and (3) Consenting Plan's rights (including rights upon a
breach thereof) with respect to the Settlement Agreement, the Supplemental Plan
Agreement or any other agreement between MPN and such Consenting Plan that (a)
modifies the Supplemental Plan Agreement and (b) has been approved by Final
Order of the Bankruptcy Court, subject to the terms and conditions of the
applicable governing agreement; (b) covenants and agrees never to institute or
cause to be instituted against MPN, except as to any of the items identified in
items (1), (2) or (3), any suit or other form of action or proceeding of any
kind or nature whatsoever, based upon any claims, demands, indebtedness,
agreements, promises, causes of action, obligations, damages or liabilities of
any nature whatsoever, in law or in equity, whether or not known, suspected or
claimed, that Consenting Plan or any Consenting Plan Released Party ever had,
has claimed to have, now has, or may hereafter have or claim to have against
MPN by reason of any matter, cause, thing, act or omission of MPN occurring at
any item prior to the date of payment of such 85% Distribution. The waiver and
release provisions in this Section 9.4 shall not apply to any claims against
any entity other the MPN.
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With respect to any such claims against any entity other than MPN, all theories
of liability and damages are preserved. Nothing in the Plan or any Consenting
Plan's actions to implement or participate in the consummation of the Plan
shall exonerate in whole or in part any guarantor (other than MPN) of an
obligation to a Consenting Plan or any Consenting Plan Released Party.
9.5 RELEASE OF MPN BY CONSENTING PLANS UPON RECEIPT OF FINAL
DISTRIBUTION. Effective immediately upon a Consenting Plan's receipt of any
Final Distribution on account of all of Consenting Plan's Allowed Claims that
are entitled to such distribution under this Plan, Consenting Plan, on behalf
of itself and the other respective Consenting Plan Released Parties except for
members and enrollees, hereby remises, acquits, releases and forever discharges
MPN, and covenants and agrees never to institute or cause to be instituted
against MPN any suit or other form of action or proceeding of any kind or
nature whatsoever based upon any and all claims, demands, indebtedness,
agreements, promises, causes of action, obligations, damages or liabilities of
any nature whatsoever, in law or in equity, whether or not known, suspected or
claimed, that Consenting Plan or any Consenting Plan Released Party except for
members and enrollees ever had, has claimed to have, now has, or may hereafter
have or claim to have against MPN by reason of any matter, cause, thing, act or
omission of MPN occurring at any time prior to the date of payment of the Final
Distribution. The waiver and release provisions in this Section 9.5 shall not
apply to any claims against any entity other than MPN. With respect to any such
claims against any entity other than MPN, all theories of liability and damages
are preserved. Nothing in the Plan or any Consenting Plan's actions to
implement or participate in the consummation of the Plan shall exonerate in
whole or in part any guarantor (other than MPN) of an obligation to a
Consenting Plan or any Consenting Plan Released Party.
9.6 RELEASE OF MPN BY MEDPARTNERS RELEASING PARTIES UPON RECEIPT OF
85% DISTRIBUTION. Effective immediately upon receipt by any MedPartners
Releasing Party of the 85% Distribution with respect to any Allowed Claim and
in consideration of the payment thereof, such MedPartners' Releasing Party
hereby: (a) remises, acquits, releases and forever discharges MPN, except with
respect to (1) such MedPartners Releasing Party's claim(s) for and right(s) to
collect any Supplemental Estate Distributions and the Final Distribution on
such
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Allowed Claim pursuant to the terms and conditions of this Plan, and (2) such
MedPartners Releasing Party's claim(s) for and right(s) to collect the 85%
Distribution, any Supplemental Estate Distributions and the Final Distribution
on any other Allowed Claims held by such MedPartners Releasing Party that may
be entitled to any such distributions pursuant to the terms and conditions of
this Plan; and (b) covenants and agrees never to institute or cause to be
instituted against MPN, except as to any of the items identified in items (1)
or (2), any suit or other form of action or proceeding of any kind or nature
whatsoever, based upon any claims, demands, indebtedness, agreements, promises,
causes of action, obligations, damages or liabilities of any nature whatsoever,
in law or in equity, whether or not known, suspected or claimed, that such
MedPartners Releasing Party ever had, has claimed to have, now has, or may
hereafter have or claim to have against MPN by reason of any matter, cause,
thing, act or omission of MPN occurring at any time prior to the date of
payment of such 85% Distribution.
9.7 RELEASE OF MPN BY MEDPARTNERS RELEASING PARTIES UPON RECEIPT OF
FINAL DISTRIBUTION. Effective immediately upon receipt by any MedPartners
Releasing Party of any Final Distribution on account of all of such MedPartners
Releasing Party's Allowed Claims that are entitled to such distribution under
this Plan, such MedPartners Releasing Party hereby remises, acquits, releases
and forever discharges MPN, and covenants and agrees never to institute or
cause to be instituted against MPN any suit or other form of action or
proceeding of any kind or nature whatsoever based upon any and all claims,
demands, indebtedness, agreements, promises, causes of action, obligations,
damages or liabilities of any nature whatsoever, in law or in equity, whether
or not known, suspected or claimed, that such MedPartners Releasing Party has
claimed to have, now has, or may hereafter have or claim to have against MPN by
reason of any matter, cause, thing, act or omission of MPN occurring at any
time prior to the date of payment of the Final Distribution.
9.8 FURTHER AGREEMENTS OF PROVIDERS AND PLANS.
9.8.1 Each releasing party under this Article 9 further
understands and agrees that the releases granted pursuant to this Article 9
will be treated as a full and complete defense to, and will forever be a
complete bar to the commencement or prosecution of any and
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all causes of action arising out of any matter, cause or thing whatsoever
whenever arising which may be brought, instituted or taken by the releasing
parties against the released parties arising out of the circumstances of any
claims released hereunder.
9.8.2 Each releasing party under this Article 9 understands
and agrees that there is a risk that subsequent to the date the releases under
this Article 9 becomes effective, such releasing party will discover, incur or
suffer claims or causes of action that were unknown or unanticipated at the time
those releases became effective, including but not limited to unknown or
unanticipated claims or causes of action that arose from, or are based upon or
relate to, the claims hereby released that if known by such releasing party on
the date the releases under this Article 9 became effective may have materially
affected said releasing party's decision to consent and agree to such release.
Each releasing party understands that when it consents and agrees to the
releases granted pursuant to this Article 9, it is assuming the risk of such
unknown claims or causes of action and agrees that its release of the released
parties applies to any and all such claims and causes of action.
9.8.3 Each releasing party, by consenting and agreeing to the
releases granted pursuant to this Article 9, represents that it has read the
Plan, including this Article 9 and fully understands all of its terms; that it
has made such factual investigation pertaining to the releases granted pursuant
to this Article 9, as it deems necessary; that it has been advised to confer
with its attorney prior to agreeing to the releases granted pursuant to this
Article 9, and that it has so conferred or has knowingly and voluntarily chosen
not to confer with an attorney; that it understands any rights it may have and
agrees to the releases granted pursuant to this Article 9, with full knowledge
of any such rights; and that the released parties have not made any statement or
representation to such releasing party regarding any fact relied upon in
entering into the releases granted pursuant to this Article 9, except as
expressly stated in this Plan, Disclosure Statement or the Settlement Agreement.
9.9 ACKNOWLEDGMENT OF RELEASE. With respect to any general
releases granted under this Plan, each releasing party thereunder understands
and agrees that it is releasing unknown claims and expressly waives all rights
it has or may have under Section 1542 of the
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California Civil Code or any other statute or common law principle of similar
effect. Each such releasing party acknowledges that it is familiar with Section
1542 of the California Civil Code, which reads as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
9.10 OTHER RESTRICTIONS AGREED TO BY PROVIDER.
9.10.1 Except as provided in Section 9.3.3, Provider
explicitly agrees not to bill, initiate any action, or otherwise seek payment
on account of any MPN Provider Claims for Health Care Services from enrollees
of any Consenting Plan.
9.10.2 In consideration of the tolling agreements contained
in the Supplemental Plan Agreement in favor of Providers, Provider explicitly
agrees to refrain from seeking payment from any Consenting Plan Released Party
or initiating any action against any Consenting Plan Released Party related to
any MPN Provider Claims unless and until the first to occur of (i) the one
hundred eightieth day after a judgment has been rendered that a payment default
has occurred in the payment of an 85% Distribution or a 90% Distribution, as
applicable, to a Provider pursuant to an arbitration proceeding under Article
12 of the Settlement Agreement or a judicial proceeding pursuant to Section
10.4 or 16.14 of the Settlement Agreement, if such 85% Distribution or 90%
Distribution, as applicable, are not then being made in accordance with this
Plan; (ii) the earliest date after such one hundred eightieth day that the
payment of an 85% Distribution or a 90% Distribution, as applicable to a
Provider is not being made in accordance with this Plan; and (iii) a case under
the Bankruptcy Code has been filed by or against MedPartners.
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9.10.3 In consideration of the tolling agreements contained
in the Supplemental Plan Agreement in favor of Providers, Provider explicitly
agrees to refrain from seeking payment from or initiating any action against
any MedPartners Released Party unless and until a payment default has occurred
under this Plan with respect to any distributions to be made to such Provider.
9.10.4 If Provider previously contracted with MPN to provide
institutional services and is recontracting for the provision of such services
directly with a Plan, then, in connection with such initial transfer of
institutional risk from MPN to the Consenting Plans, Provider expressly
acknowledges that it has offered, or agrees to offer on a retroactive basis,
the Consenting Plans, in good faith, economic contract terms which are no less
favorable than MPN received from such Provider immediately prior to the
transfer of such institutional risk to the Consenting Plans through the earlier
to occur of December 31, 1999 or the expiration of such Provider's contract
with MPN.
9.11 SUBORDINATION OF OTHER CLAIMS. Provider hereby agrees to
subordinate any Claims of Provider other than MPN Provider Claims to, and only
to, MPN Provider Claims and Plan Preserved Claims that become Allowed Claims
held by Consenting Providers or Consenting Plans. Provider also agrees that any
distribution to which it otherwise would be entitled on account of such
subordinated Claims shall be and hereby is assigned for the benefit of the
Consenting Providers and Consenting Plans on account of their MPN Provider
Claims and Plan Preserved Claims that become Allowed MPN Claims in the manner
set forth, and on the terms and conditions of, Articles 2, 5 and 6 of this Plan.
9.12 ACKNOWLEDGMENT OF THIRD PARTY BENEFICIARY RIGHTS. To the extent
Provider may be a Beneficiary as defined in the Settlement Agreement, Provider
consents to the scope of Provider's rights provided in Section 16.14 thereof,
particularly as to the jurisdictional threshold for enforcement (Section
16.14(c)) and as to notice (Section 16.14(d)).
9.13 SUCCESSORS AND ASSIGNS. The Releases granted pursuant to this
Article 9 shall bind and inure to the benefit of the respective heirs, legal
representatives, successors and assigns of each Consenting Provider.
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9.14 NO IMPAIRMENT OF CONSENTING PLAN'S RIGHTS TO ENFORCE THE
SUPPLEMENTAL PLAN AGREEMENT OR ANY SUBSEQUENT SETTLEMENT AGREEMENT AGAINST
MPN. Except as it pertains to the satisfaction and release of Allowed Claims
against MPN held by Consenting Plans, nothing in this Article 9 shall impair
the rights of any Consenting Plan (including any rights of such Consenting Plan
upon a breach thereof) with respect to the Settlement Agreement, the
Supplemental Plan Agreement or any other agreement between MPN and such
Consenting Plan that (a) modifies the Supplemental Plan Agreement and (b) has
been approved by Final Order of the Bankruptcy Court, subject to the terms and
conditions of the applicable governing agreement.
9.15 PRESERVATION OF BANKRUPTCY CODE SECTION 503(B) CLAIMS.
Notwithstanding anything to the contrary in this Article 9, nothing
contained in this Article 9 shall constitute a waiver, release or subordination
of any Claim under Bankruptcy Code section 503(b).
ARTICLE 10
RETENTION OF JURISDICTION
Notwithstanding the entry of the Confirmation Order and the occurrence
of the Effective Date, the Bankruptcy Court shall retain such jurisdiction over
the Chapter 11 Case after the Effective Date as is legally permissible,
including jurisdiction to:
(a) Allow, disallow, determine, liquidate, classify,
estimate or establish the priority or secured or unsecured status of any Claim
or Interest, including the resolution of any request for payment of any
Administrative Claim and the resolution of any and all objections to the
allowance or priority of Claims, Interests and Administrative Claims;
(b) Grant or deny any applications for allowance of
compensation for professionals authorized pursuant to the Bankruptcy Code or
the Plan, for periods ending on or before the Effective Date;
(c) Resolve any matters relating to the assumption,
assumption and assignment or rejection of any executory contract or unexpired
lease to which the Debtor is a party or with respect to which the Debtor or the
Revested Debtor may be liable, including
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without limitation the determination of whether such contract is executory for
the purposes of Bankruptcy Code section 365, and hear, determine and, if
necessary, liquidate any Claims arising therefrom;
(d) Enter orders approving the Debtor's post-Confirmation
sale or other disposition of Assets under Bankruptcy Code section 363;
(e) Ensure that distributions to holders of Allowed Claims
are accomplished pursuant to the provisions of the Plan;
(f) Decide or resolve any motions, adversary proceedings,
contested or litigated matters and any other matters and grant or deny any
applications involving the Debtor or the Revested Debtor that may be pending in
the Chapter 11 Case on the Effective Date;
(g) Hear and determine matters concerning state, local or
federal taxes in accordance with Bankruptcy Code sections 346, 505 or 1146;
(h) Enter such orders as may be necessary or appropriate to
implement or consummate the provisions of the Plan and the Confirmation Order;
(i) Hear and determine any matters concerning the
enforcement of the provisions of Article 9 of this Plan and any other releases
contemplated by this Plan;
(j) Resolve any cases, controversies, suits or disputes that
may arise in connection with the consummation, interpretation or enforcement of
the Plan or the Confirmation Order;
(k) Permit the Debtor or the Revested Debtor, to the extent
authorized pursuant to Bankruptcy Code section 1127, to modify the Plan or any
agreement or document created in connection with the Plan, or remedy any defect
or omission or reconcile any inconsistency in the Plan or any agreement or
document created in connection with the Plan;
(l) Approve any post-Confirmation Date amendments to the
Settlement Agreement that require Bankruptcy Court approval pursuant to Section
11.6 below;
(m) Issue injunctions, enter and implement other orders or
take such other actions as may be necessary or appropriate to restrain
interference by any entity with consummation, implementation or enforcement of
the Plan or the Confirmation Order;
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(n) Enter and enforce such orders as are necessary or
appropriate if the Confirmation Order is for any reason modified, stayed,
reversed, revoked or vacated, or distributions pursuant to the Plan are enjoined
or stayed;
(o) Determine any other matters that may arise in connection
with or relating to the Plan or any agreement or the Confirmation Order;
(p) Enter any orders in aid of prior orders of the
Bankruptcy Court;
(q) Hear and determine any request of the Reconstituted
Committee for authority and approval to take any actions or enforce any
remedies pursuant to Section 5.4 or 11.2 hereof;
(r) Hear and determine any request of the Reconstituted
Committee for the appointment of an Authorized Agent(as defined in the $40
Million LC) consistent with the terms and conditions of the $40 Million LC;
(s) Determining whether the MedPartners Funding Commitment
with respect to MPN Provider Claims and MPN Plan Preserved Claims has been
fully satisfied; and
(t) Enter an order concluding the Chapter 11 Case.
ARTICLE 11
MISCELLANEOUS PROVISIONS
11.1 REQUEST FOR NON-CONSENSUAL CONFIRMATION. To the extent each
Impaired Class of Claims or Interests does not vote to accept the Plan, the
Debtor requests that the Court confirm the Plan under the cramdown provisions
of Bankruptcy Code section 1129(b).
11.2 POST-EFFECTIVE DATE OVERSIGHT OF THE REVESTED DEBTOR. On the
Effective Date, the Committee shall be reconstituted to consist of four (4)
members, two (2) of whom shall be selected by the Providers or Provider
representatives serving on the Committee as of the Confirmation Date and two (2)
of whom shall be selected by the Health Plans serving on the Committee as of the
Confirmation Date (the "Reconstituted Committee"). The Reconstituted Committee
shall be authorized to employ one law firm as counsel (unless such law firm is
unable to represent the Reconstituted Committee with respect to a particular
matter, in which case a separate law firm may be employed sole to handle that
particular matter), which firm (or firms)
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shall be entitled to compensation from the Operating Reserve. The Reconstituted
Committee shall be authorized to employ Crossroads, LLC as its financial
advisor through the end of the calendar month immediately following the
calendar month during which the Effective Date occurs. Crossroads, LLC shall be
entitled to compensation from the Operating Reserve. The Reconstituted
Committee and its advisors shall be authorized solely to oversee distributions
under this Plan and to exercise those remedies available to the Reconstituted
Committee under this Plan or the Committee under the Settlement Agreement;
provided, however, that if the Revested Debtor fails to perform any material
obligations under this Plan, the Reconstituted Committee may, upon notice and a
hearing, seek a Bankruptcy Court order to enforce the provisions of the Plan and
may employ such experts as may be necessary to advise the Reconstituted
Committee with respect to such action.
11.3 TERMINATION OF EXAMINER ORDER. On the Effective Date, the
Examiner Order shall terminate and be of no further force or effect.
11.4 MODIFICATION OF THE PLAN. Subject to the restrictions on plan
modifications set forth in Bankruptcy Code section 1127, the Debtor and the
Revested Debtor reserve the right to alter, amend or modify the Plan before its
substantial consummation.
11.5 REVOCATION OF THE PLAN. The Debtor reserves the right to revoke
or withdraw the Plan prior to the Confirmation Date. If the Debtor revokes or
withdraws the Plan, or if Confirmation does not occur or if the Plan odes not
become effective, then the Plan shall be null and void, and nothing contained
in the Plan shall: (a) constitute a waiver or release of any Claims by or
against, or any Interests in, the Debtor; (b) constitute an admission of any
fact or legal conclusion by the Debtor or any other Entity; or (c) prejudice in
any manner the rights of the Debtor in any further proceedings involving the
Debtor.
11.6 AMENDMENT OF THE SETTLEMENT AGREEMENT. The Settlement Agreement
shall not be amended after the Confirmation Date in any manner that is adverse
to the interests of MPN, the Estate, Consenting Plans or Consenting Providers
unless the Bankruptcy Court shall have approved such amendment following notice
and a hearing.
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11.7 GOVERNING LAW. Unless a rule of law or procedure is supplied by
(i) federal law (including the Bankruptcy Code and Bankruptcy Rules), or (ii)
an express choice of law provision in any agreement, contract, instrument or
document provided for, or executed in connection with, the Plan, the rights and
obligations arising under the Plan and any agreements, contracts, documents and
instruments executed in connection with the Plan shall be governed by, and
construed and enforced in accordance with, the laws of the State of California
without giving effect to the principles of conflict of laws thereof.
11.8 NO ADMISSIONS. Notwithstanding anything herein to the contrary,
nothing contained in the Plan shall be deemed as an admission by the Debtor
with respect to any matter set forth herein including, without limitation,
liability on any Claim or the propriety of any Claims classification.
11.9 SEVERABILITY OF PLAN PROVISIONS. If prior to Confirmation any
term or provision of the Plan that does not govern the treatment of Claims or
Interests is held by the Bankruptcy Court to be invalid, void or unenforceable,
the Bankruptcy Court shall have the power to alter and interpret such term or
provision to make it valid or enforceable to the maximum extent practicable,
consistent with the original purpose of the term or provision held to be
invalid, void or unenforceable, and such term or provision shall then be
applicable as altered or interpreted. Notwithstanding any such holding,
alteration or interpretation, the remainder of the terms and provisions of the
Plan shall remain in full force and effect and shall in no way be affected,
Impaired or invalidated by such holding, alteration or interpretation. The
Confirmation Order shall constitute a judicial determination and shall provide
that each term and provision of the Plan, as it may have been altered or
interpreted in accordance with the foregoing, is valid and enforceable pursuant
to its terms.
11.10 SUCCESSORS AND ASSIGNS. The rights, benefits and obligations of
any Entity named or referred to in the Plan shall be binding on, and shall
inure to the benefit of, any heir, executor, administrator, successor or assign
of such Entity.
11.11 SATURDAY, SUNDAY OR LEGAL HOLIDAY. If any payment or act under
the Plan is required to be made or performed on a date that is not a Business
Day, then the making of
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such payment or the performance of such act may be completed on the next
succeeding Business Day, but shall be deemed to have been completed as of the
required date.
11.12 NO DIMINISHMENT OF MEDPARTNERS FUNDING COMMITMENT. Neither the
Plan nor the Confirmation Order shall diminish the MedPartners Funding
Commitment as it applies to: (a) holders of Managed Physician Practice Provider
Claims; or (b) Consenting Plans insofar as they hold Managed Physician Practice
Provider Claims or Plan Preserved Claims against a Managed Physician Practice.
11.13 NO PRECLUSIVE EFFECT. The failure of a party to object to
anything contained in or omitted from the Disclosure Statement shall not be
deemed to be acquiescence to the accuracy or adequacy of such matter, or in any
other manner act as a waiver or estoppel in any other existing or future
litigation.
Dated: September 14, 2000 MEDPARTNERS PROVIDER NETWORK, INC.
By: /s/ BRADLEY S. KARRO
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